U.S. BRIEFS

PIPELINES

PACIFIC GAS TRANSMISSION CO. received shippers' bids for 2.5 bcfd of capacity during a Feb. 21-Mar. 22 open season for its proposed expansion scheduled to move more Canadian gas to the Pacific Northwest and California. Successful bidders will have until Apr. 25 to accept awards in an expansion designed to transport 148 MMcfd to the Pacific Northwest and 755 MMcfd to California.

A JOINT VENTURE of Texaco Pipeline Inc. and Oryx Energy Co. finished laying the first 10 miles of a planned 90,000 b/d system to move crude oil from Pearsall field of South Texas to a point near Lytle, Tex., south of San Antonio (OGJ, Mar. 4, p. 17).

REFINING

HESS OIL VIRGIN ISLANDS CORP. let contract to Litwin Engineers & Constructors Inc., Houston, for detailed engineering, procurement, and construction services for a $750 million project at its St. Croix, Virgin Islands, refinery. Included will be a 75,000 b/d catalytic cracking unit and several downstream octane enhancement units, as well as units for gasoline treatment and LPG recovery and offsite equipment and support facilities.

DIAMOND SHAMROCK CORP., San Antonio, will install a 25,000 b/d hydrocracker and expand crude oil processing capacity to 70,000 b/d from 55,000 b/d at its Three Rivers, Tex., refinery, about midway between San Antonio and Corpus Christi. Gasoline production will jump by as much as 50%.

AMERICAN INTERNATIONAL PETROLEUM CORP., New York, signed an amended agreement to lease its 30,000 b/d Lake Charles, La., refinery to Gold Line Refining Ltd. (OGJ, Oct. 29, 1990, p. 32). The changes increase the rental fee to 500/bbl from 450 and eliminate the minimum monthly rent until Oct. 15. Gold Line agreed to take over plant operations Apr. 1 and process crude "on a reasonably continuous basis" through Oct. 15 and thereafter at a rate of at least 18,000 b/d through Mar. 31, 1992.

DRILLING-PRODUCTION

CONOCO INC. signed a definitive agreement to buy San Juan basin producing leases from Mesa LP, Dallas. Consideration in the trade, covering oil and gas interests in Northwest New Mexico and Southwest Colorado, will be $161 million in cash and assumption of about $2 million in gas imbalance obligations. Mesa expects to close the sale in May, leaving its main holdings in the Gulf Coast, Rocky Mountains, Hugoton field of Southwest Kansas, and West Panhandle field of the Texas Panhandle.

SOUTHLAND ROYALTY CO., Fort Worth, received the second installment-$18,167 million-of a payment agreed to in settlement of its lawsuit against Public Service Co. of New Mexico (PNM) and PNM subsidiary Sunterra Gas Gathering Co. The suit, settled effective Mar. 1, 1990, involved gas sales to PNM and Sunterra from Southland leases in Northwest New Mexico.

DEKALB ENERGY CO., Denver, expects to take a writedown of about $70 million pretax, or $44 million after tax, on producing leases to reflect low oil and gas prices during first quarter 1991.

ENVIRONMENTAL PROTECTION AGENCY issued an administrative complaint seeking $317,650 in penalties against ARCO Alaska Inc. for alleged violations of the Resource Conservation and Recovery Act. EPA said ARCO collected and disposed of waste improperly, stored some wastes longer than permitted, and failed to determine the content of some stored wastes. EPA also gave ARCO a schedule for complying with its rules.

PRIDE PETROLEUM SERVICES INC., Houston, agreed to pay Alliance Well Service, Liberty, Tex., $1.2 million for 10 service rigs, related support equipment, and a yard at Liberty. During 1990, Alliance revenues from its Liberty operations were about $3.3 million. Sale completion is expected in late April, pending approval of Alliance's stockholders. The deal will increase Pride's fleet to 419 rigs.

PETROCHEMICALS

JLM INDUSTRIES, Stamford, Conn., plans to build a 400,000 metric ton/year polymer grade propylene export facility at its existing terminal at the mouth of the Houston Ship Channel in Seabrook, Tex. Two berths will be available at the site for simultaneous loading by principal contract users Union Carbide Chemicals & Plastics Co. Inc. and Diamond Shamrock. The terminal will be owned and operated by JLM subsidiary Olefins Terminal Corp.

ACQUISITIONS

GARNET RESOURCES CORP. agreed in principle to trade about 2.57 million shares of Garnet common stock valued at about $18 million for outstanding capital stock of RGO Energy Inc. and outstanding partnership interest in RGO Partners Ltd. The trade is subject to an acceptable merger agreement and approvals by boards of directors.

GAS TREATING

WILLIAMS FIELD SERVICES CO., Salt Lake City, started up its Milagro gas treating plant near Blanco, N.M. It removes carbon dioxide from coalbed methane carried in the Manzanares gathering system. Service began Mar. 22 by bringing up one 167 MMcfd train. A second train of the same size is to be completed in May by prime contractor South-Tex Treaters Inc., Midland, Tex.

CMS GAS TRANSMISSION CO., Detroit, and Otsego Holdings Inc. formed a 75-25 partnership to build a $6 million CO2 removal plant of undisclosed capacity in Otsego County, Mich. The plant will treat gas produced from the Upper Devonian Antrim in the northern part of Michigan's Lower Peninsula. Start-up is scheduled this summer.

EXPLORATION

MOBIL EXPLORATION & PRODUCTION U.S.A. INC. filed an appeal with the U.S. Commerce Department contesting North Carolina's finding that Mobil's plan to explore off its coast would be inconsistent with its coastal zone management program.

GOVERNMENT

DEPARTMENT OF ENERGY will distribute $91 million in oil overcharge funds to 50 states, the District of Columbia, and five territories to finance energy conservation projects. The funds are part of a 1988 settlement with Texaco Inc. that resolved allegations the company violated price and allocation rules during August 1973-January 1981. DOE has paid states about $4 billion during the past 5 years and expects to distribute another $300 million in the next 2 years.

LABOR DEPARTMENT'S 1,700 U.S. Employment Service offices are accepting applications from persons seeking jobs in Persian Gulf restoration work. The Employment Service said few job vacancies exist now, but it is encouraging employers to list jobs available in the Middle East.

Copyright 1991 Oil & Gas Journal. All Rights Reserved.