U.S. BRIEFS

PROCESSING

BP OIL CO. plans an early 1992 start of construction for a $52 million diesel desulfurization unit at its 95,000 b/d Ferndale, Wash., refinery. BP also agreed to buy Exxon Co. U.S.A.'s service stations in the Seattle-Tacoma region. Rebranding is expected in April 1992.

OCCIDENTAL CHEMICAL CORP. let contract to Jacobs Engineering Group Inc. to provide engineering and procurement services for a methyl tertiary butyl ether plant at its Chocolate Bayou complex in Alvin, Tex. (OGJ, Aug. 5, p. 26).

LNG

CONSOLIDATED NATURAL GAS CO., Pittsburgh, and Roadway Express Inc., Akron, will team up to evaluate liquefied natural gas fuel use in the heavy trucking industry. Consolidated installed a $250,000, 9,000 gal LNG storage tank and refueling station at Roadway's Copley, Ohio, terminal as part of a 1 year pilot program. Roadway will evaluate a fleet of 10 LNG fueled trucks in pick up and delivery service.

TRANSPORTATION

PLAINS RESOURCES INC., Houston, let a $23 million contract to Matrix Service Co., Tulsa, for construction of the first stage of its 7 million bbl crude oil tank farm at Cushing, Okla. (OGJ, Apr. 1, p. 44). Matrix wi!l serve as prime contractor, with Williams Bros. Engineering Co., Tulsa, serving as project engineers. Construction is to begin by December.

FEDERAL ENERGY REGULATORY COMMISSION denied Questar Pipeline Co.'s request to build a 201/2 mile interconnect with Kern River Gas Transmission Co.'s line under its blanket certificate, ruling that Natural Gas Act Section 7(c) case specific procedures must be followed. The line was to have crossed a historic Union Pacific Railroad bed in Uinta County, Wyo., a site eligible for the National Register of Historic Places. Questar claimed both procedures require the same mitigating steps.

COGENERATION

FERC reaffirmed the qualifying facility status of the Midland Cogeneration Venture, denying rehearing applications filed by two Michigan parties. MCV is selling power to Consumers Power Co. as a qualifying facility under the Public Utility Regulatory Policies Act at an avoided cost price. Qualifying facility status entitles MCV to be exempt from typical utility regulation.

DRILLING-PRODUCTION

APACHE CORP., Denver, 7 Grant Canyon Unit in Nye County, Nev., is producing at a stabilized rate of 3,200 b/d of 25 gravity oil from Devonian Guilmette at about 3,700 ft. The well was drilled to boost oil flow rates stifled by water encroachment (OGJ, Aug. 12, p. 90). Apache expects Grant Canyon field's average oil production to stabilize at more than 6,000 b/d. Apache holds a 35.8% working interest in the field, which accounts for more than half of the state's oil production.

LOMAK PETROLEUM INC., Fort Worth, signed a definitive agreement to acquire Wainoco Oil & Gas Co.'s Appalachian basin gas leases for $4 million (OGJ, Sept. 23, Newsletter). The leases are in Athens field, Crawford County, Pa., and include about 300 gas wells, 11,100 gross and net undeveloped acres, and a gathering system. Net reserves are estimated at 7.8 bcf. Lomak will make the purchase in a joint venture with an undisclosed industry partner.

DIAGNOSTIC SCIENCES INC., New York, signed a definitive agreement to acquire all outstanding shares of Norton Drilling Co., Lubbock, Tex. (OGJ, July 8, p. 23). Norton provides contract drilling services with a fleet of 13 rigs in Texas, New Mexico, and the Rocky Mountains and had 1990 revenues of about $21.4 million. Diagnostic expects the purchase to increase its revenues to about $30 million and its assets to about $20 million.

HENRY PETROLEUM CORP., Midland, Tex., signed a $10 million agreement with a silent investment partner to drill development wells and buy production in the Midland basin of West Texas. Henry also will acquire waterfloods elsewhere in the Permian basin and drill in the Arkoma basin of Oklahoma and Arkansas.

MINERALS MANAGEMENT SERVICE issued a final rule amending its gas product valuation regulations for gas sold under arm's length, percentage of proceeds contracts. The final rule, published in the Sept. 13 Federal Register, requires the value of the gas to be set using rules applicable to unprocessed rather than processed gas.

MMS and the Bureau of Land Management are considering requiring lease operators to provide data on drilling and production in metric measurements. A 1988 law required federal agencies to shift to metric measurements when feasible. In a Sept. 17 Federal Register notice, the agencies asked industry to comment on converting to the metric system.

ENVIRONMENT

ENVIRONMENTAL PROTECTION AGENCY proposed a rule requiring all passenger cars and light trucks, beginning in model year 1994, to be equipped with computer systems to check emission control hardware. The rule would require monitoring of the catalytic converter, oxygen sensor, and engine misfire and help mechanics detect problems. EPA said the rule would add $94 to the cost of a car and $101 to the cost of a light truck.

ALTERNATE FUELS

DEPARTMENT OF ENERGY chose Coastal Power Production Co. and Tampella Power Corp., Williamsport, Pa., to receive $109 million to build and operate a 107,000 kw power generating station in Wise County, Va., using coal gasification technologies. DOE matching funds will cover about half the project's cost and are subject to a definitive agreement. Coal will be provided by Coastal's Virginia Iron, Coal & Coke Co. affiliate. The plant is to be operational in 1997.

U.S. SENATE, working on the Department of Interior appropriations bill, agreed to extend a moratorium on the issuance of oil shale claims in Colorado, Wyoming, and Utah for another 9 months. Proponents noted Congress is reconsidering the claims in other legislation. The amendment forbids the processing of about 1,200 shale oil patents before July 1, 1992.

TANKERS

NATIONAL TRANSPORTATION SAFETY BOARD ruled the pilot of the Greek flagged Shinoussa tanker was unable to keep control of the vessel, which led to its collision with a barge in the Houston Ship Channel last year (OGJ, Aug. 6, 1990, p. 27). About 700,000 gal of crude spilled into Galveston Bay as a result of the accident.

Copyright 1990 Oil & Gas Journal. All Rights Reserved.