INDUSTRY BRIEFS

Futures

New York Mercantile Exchange reached a daily record for natural gas futures volumes Apr. 25, with 99,866 Henry hub contracts, surpassing the previous record of 99,742 contracts on Nov. 20, 1996. The volumes marked the third highest in the history of energy trading at Nymex. Light sweet crude oil saw the highest volume ever at 228,569 contracts on Sept. 29, 1993; heating oil futures ranks second at 101,772 contracts on Sept. 20, 1995.

Power

Distributed Power Coalition of America, a new group formed by U.S. interstate pipelines, will seek to remove the regulatory and legislative impediments to the use of distributed power technologies. Distributed power generation is any small-scale power generation technology, such as small combustion turbine generators, that provides power at a site closer to consumers than central generating stations.

Pipelines

A federal judge in Cheyenne, Wyo., declined to dismiss a lawsuit challenging U.S. Bureau of Land Management permits that allowed the Express Pipeline to be built across federal lands. The Wyoming Independent Petroleum Association is pressing the suit, although Express has started operations (OGJ, Dec. 9, 1996, p. 24). The case now will proceed to trial. Canada's

National Energy Board (NEB) approved a plan by Novagas Clearinghouse Pipelines Ltd., Calgary, to build and operate a natural gas liquids pipeline from northeastern British Columbia to Alberta. Construction is to begin this year on the $8 million (Canadian), 36-mile line. The Taylor-Boundary Lake Liquids Pipeline project will move NGL to gathering, storage, and processing facilities near Redwater, Alta. The project will include a pumping and metering straddle plant at Taylor, B.C.

NEB

set a public hearing June 16 on an application by Amoco Canada Petroleum Ltd., on behalf of itself, Dome Kerrobert Pipeline Ltd., and PanCanadian Kerrobert Pipeline Ltd., to expand the Kerrobert NGL system in southwestern Saskatchewan to meet forecast increases in NGL output from the Empress, Alta., extraction complex. A new 10-in., 96-mile pipeline will connect extraction plants at Empress to Interprovincial Pipe Line Inc.'s line at Kerrobert, Sask., and will increase system capacity by about 50,000 b/d to 117,000 b/d. Interventions must be filed by May 14.

Trans Quebec & Maritimes Pipeline Inc.

(TQM), Calgary, applied to NEB to build a 132.2-mile, 24-in., $270 million (Canadian) gas pipeline, known as the Pngts Expansion, from Lachanaie, Que., to Pittsburg, N.H. Proposed start-up date is Nov. 1, 1998. The pipeline would deliver a total of 212.2 MMcfd in the first year, with 152.2 MMcfd for Northeast U.S. markets; ramping up to deliveries of about 285 MMcfd in the second year, with about 210 MMcfd destined for the northeastern U.S. TQM is jointly owned by Gaz Metropolitain & Co., Montreal, and TransCanada PipeLines Ltd., Calgary.

Mapco Inc.,

Tulsa, bought a 5% interest in the proposed $3.6 billion (Canadian) Alliance pipeline project to move natural gas from western Canada to Chicago-area markets. The Alliance group plans a 1,900-mile line to move 1.3 bcfd, beginning in 1999 (OGJ, Dec. 2, 1996, Newsletter).

Southern Gas Association

will hold a meeting in Houston May 14-16 to discuss operational problems caused by black powder build-up in natural gas pipelines. The substance, typically 50% iron sulfide, 25% salt, and 25% other compounds, requires extensive filtering to protect delicate machinery and metering. Opinions differ on origins and solutions. The Houston meeting follows another on the same topic in Lafayette, La., in January.

Refining

Unocal Corp.

could be held liable for more than $50 million in damages for alleged U.S. Clean Water Act violations in releasing selenium from its former Rodeo, Calif., refinery into San Francisco Bay. A federal judge in San Francisco has ruled in favor of environmental groups that brought a lawsuit against Unocal centering on the discharges. Unocal has since sold the refinery to Tosco Corp.

Drilling-production

India's

Oil & Natural Gas Commission (ONGC) let a $50 million contract to Petroleum Geo-Services ASA (PGS), Lysaker, Norway, and Houston, for what it claims is the largest reservoir evaluation project ever awarded. The project, aimed at stemming decline in Bombay High oil field off India, involves acquiring, processing, and interpreting 1,750 sq km of 3D seismic data. PGS will use dual-sensor ocean bottom cable technology to acquire the data and then process it in India with a massively parallel processing (MPP) supercomputer. The proprietary MPP hardware and software system will be sold to ONGC at the end of the project. Work will begin in September 1997 and is to be completed in fourth quarter 1998.

U.S. Minerals Management Service

scheduled a public meeting May 14 in Farmington, N.M., to discuss possible use of royalty in-kind programs for production of federal gas from onshore leases. MMS is considering several royalty-in-kind options, following a 1995 experiment with directly marketing offshore gas in the Gulf of Mexico.

Marathon Gabon LDC

signed a letter of intent with Modec (U.S.A.) Inc., Houston, a unit of Japan's Mitsui Group, for engineering, procurement, transportation, and installation of a mobile offshore production unit-converted from a mat-supported jack up-and a floating storage and offloading unit off Gabon. The units will be used to develop Tchatamba Marine oil field on Kowe block about 18 miles off Gabon in 151 ft of water. Output is slated to begin early in 1998. Interests are operator Marathon 75% and Santa Fe Energy Resources of Gabon Ltd. 25%.

Norcen Energy Resources Ltd.,

Calgary, acquired a 50% interest in Venezuela's West Guarico oil field. Norcen will spend $25 million (Canadian) the next 2 years on unspecified work in the field, which it will operate under a farmout acquired from Mosbacher Energy Co., Houston. The work could boost production to 20,000 b/d of light crude from the current 300 b/d within 2-3 years.

Mesa Inc.,

Irving, Tex., completed the first of five wells drilled this year from a platform on East Cameron Block 322. The A-27 extended-reach well flowed is producing 2,100 b/d of oil and 660 MMcfd of gas with flowing tubing pressure of 350 psi. The rig has been skidded, and work is under way to complete the A-25 well as a dual-zone producer. Mesa owns a 100% interest in the two blocks, about 95 miles off Louisiana in 220 ft of water. The company plans to spend $20 million to drill and complete the five wells, all of which found multiple pays at 3,600-5,200 ft.

LeTourneau Inc.,

a unit of Rowan Cos. Inc., Houston, will upgrade and refurbish an existing LeTourneau Kit-the legs, jackup system, and cranes for a jackup rig-to enable construction of an enhanced Class 116-C mobile offshore drilling unit by Amfels Inc., Brownsville, Tex., for Chiles Offshore Inc., Houston. LeTourneau also is building three Super Gorilla model jack ups for Rowan's drilling division and one Super 116 jack up for Perforadora Central SA de CA, Mexico City.

Spills

Marine Spill Response Corp.

and Clean Gulf Associates agreed on joint management of their oil spill response cleanup equipment in the Gulf of Mexico region. MSRC will store CGA response equipment at its facilities in the gulf and a new facility at Houma, La. MSRC will provide the personnel and supervise operation of the CGA equipment in a spill response.

Petrochemicals

Shell Chemical Co.

will build a new plant to manufacture Carilon aliphatic polyketone engineering polymers at Geismar, La. The plant will be built in two phases, the first with capacity of as much as 25,000 metric tons/year of Carilon materials, expandable to 50,000 tons/year as market demand rises. Construction is slated to begin in third quarter 1997 with plant start- up due early in 1999. Shell currently makes Carilon polymers at Carrington, U.K.

Saudi Methanol Co.,

a unit of Saudi Basic Industries Corp. (Sabic), signed a letter of intent with Mitsubishi Heavy Industries Ltd., Tokyo, to build its fourth world-scale chemical grade methanol plant at the expanding Al Jubail, Saudi Arabia, complex (OGJ, Nov. 4, 1996, p. 46). The new unit will have capacity of 850,000 metric tons/year of methanol and is slated for completion in May 1999. A similar unit is nearing completion, with plans to begin production in July. The fourth unit will take Saudi Methanol's capacity to 3.1 million tons/year and Sabic's total methanol production capacity to 4.5 million tons/year.

ABB Lummus Global,

Bloomfield, N.J., a unit of ABB Group, Zurich, and BP Chemicals Ltd., will jointly promote and license BP's polystyrene and expandable polystyrene manufacturing technology. Under the joint arrangement, BP will provide technology support when new plants are designed and commissioned; Lummus will market and license the technology, provide basic engineering packages for plants, and offer licensees engineering, procurement, and construction support.

Gas marketing

IPL Energy Inc.,

Calgary, joined a natural gas marketing alliance with NGC Corp., Houston, in the first of at least six such unions expected this year (OGJ, Apr. 21, 1997, p. 19). IPL operates the world's longest crude oil and liquids pipeline and owns Consumers Gas Co. Ltd., Toronto, Canada's largest gas distributor. The alliance with NGC Corp. will be operated through a new IPL unit, Consumersfirst, which will start by marketing gas to customers in central Canada.

Exploration

Chevron Corp.

made a significant discovery in more than 1,300 ft of water off Angola, its first find in Angola's emerging deepwater area. Initial tests of the 14-2X well, the second of five planned on Block 14 in Angola's Cabinda enclave, indicate a combined flow rate of about 7,500 b/d from the two wells. The wells encountered a significant oil-bearing interval that indicates a potentially giant field. Further appraisal will confirm the reserves and determine development plans. Chevron, operator, holds a 31% interest in the block; Angolan national oil company Sonangol and France's Agip Angola and Total Angola each hold 20%; and the remaining 9% is held by Petrogal Angola.

Gulf Canada Resources Ltd.,

Calgary, made a new oil field discovery off Indonesia. The 11,893-ft 1 Nelayan well, operated by Clyde Petroleum Indonesia Ltd., tested a prospect 1/2 mile north of the existing production platform for KG field. Gulf said the test cut about 230 ft of net oil pay with good reservoir quality in several stacked oil-bearing sands in the target zone. The well also confirmed strong follow-up potential in the Nelayan structure and in similar structures along the Kakap wrench fault trend. Operator Clyde, which Gulf Canada acquired this year (OGJ, Feb. 24, 1997, p. 44), has a 31.25% interest in the Kakap production sharing contract.

NGL

Novagas Clearinghouse Ltd. (NCL),

Calgary, and Peace Pipe Line Ltd. signed a long-term contract to ship natural gas liquids through the 354-mile Peace line across northern Alberta from La Glace to Fort Saskatchewan, near Edmonton. NCL proposed a three-part, $235 million (Canadian) integrated NGL project for the region. Pending regulatory approval, the project could start up by spring 1998. The company already has approval for a liquids line from Northeast British Columbia to Alberta. It will now seek approval to tie the Peace pipeline into its system.

Environment

MMS

let a $1.5 million contract to Arthur D. Little Inc., Cambridge, Mass., to study the environmental risks posed by potential oil exploration in southern Alaska's Shelikof Strait and outermost Cook Inlet. The study also will examine the effects of existing oil operations in the upper Cook Inlet on the new area under study for leasing. The study is slated for completion by yearend 1998.

Companies

Valero Corp.,

San Antonio, completed its acquisition of Basis Petroleum Inc., a unit of Salomon Inc., New York. Basis assets include refineries at Texas City, Tex., Houston, and Krotz Springs, La., with total capacity of more than 300,000 b/d, as well as wholesale marketing operations (OGJ, Mar. 24, 1997, p. 24).

Witco Corp.,

Greenwich, Conn., will sell the assets of its Golden Bear division to the Golden Bear Acquisition Corp. (GBAC), a company formed by Glencoe Investment Corp., Chicago. The division produces specialty naphthenic lubricating and processing oils and asphalt rejuvenation and dust suppression products. The sale is expected to close by the end of June.

Wainoco Oil Corp.,

Houston, will sell its Canadian oil and gas interests to Numac Energy Inc., Calgary, for $133.6 million (Canadian) gross to focus on building downstream operations in Denver and Cheyenne, Wyo. Numac will retain many of Wainoco's Canadian employees in Calgary and three field offices. The sale is expected to close by June 16.

Giant Industries Inc.,

Scottsdale, Ariz., signed an agreement to acquire Phoenix Fuel Co. Inc., an independent petroleum products distributor with fuel sales of about 16,000 b/d. Phoenix's assets include a lubricants storage and distribution facility, nine bulk petroleum distribution plants, 20 cardlock fueling operations, and a fleet of 40 finished product transports. The deal is slated to close on June 2.