Processing news briefs, July 26

Rentech � Forest Oil � Intec Engineering � Jacobs Engineering � Eastman Chemical � W.R. Grace & Co. � BHP � ABB � Petrofac International � CCL Oil � Giant Industries � Western Refining

Rentech Inc., Denver, says it would cost $252 million to build a 10,000 b/d gas-to-liquids plant for natural gas conversion via its Fischer-Tropsch technology at Forest Oil Corp.'s South African Ibhubezi field. Intec Engineering Inc., on behalf of Forest, let contract to Jacobs Engineering UK Ltd. to develop the �30% cost estimate. A complete evaluation of the Intec-Jacobs study is now under way to determine how the parties will proceed with the project. Depending upon the desired slate of synthetic refined products, an additional investment of $110 million may be needed to add hydroisomerization to produce lube oil feedstock or hydrocracking and isomerization to upgrade heavier products to diesel.

Eastman Chemical Co., Kingsport, Tenn., announced plans to conduct a commercial-scale trial of a new version of its Energx polyethylene technology. The trial, expected to take place by the end of the third quarter, will employ the supported catalyst form of the proprietary technology. It will be conducted at Eastman's 430 million lb/year gas-phase linear low-density polyethylene facility in Longview, Tex. W.R. Grace & Co., Columbia, Md., will supply supported catalyst that will be used in the trial.

A consortium led by Australia's Broken Hill Pty. Co. Ltd. (BHP) has placed a $547 million (US) order with the ABB Group, Zurich, and Petrofac International Ltd. of the US to design and build a natural gas processing plant for the Ohanet gas fields in Algeria. (OGJ Online, July 3, 2000). Under the contract, ABB is responsible for design, procurement, and construction of the plant, which will process natural gas and produce LPG and condensates for use in fuel production, as chemical feedstocks, and in other applications. The plant will have an output of 30,400 b/d of condensate, 27,700 b/d of LPG, and 665 MMcfd of pipeline-quality gas. Production is expected to begin in late 2003. The Ohanet fields lie on the northern edge of the Sahara desert, about 1,300 km southeast of Algiers and 100 km west of the Libyan border.

Kazakhstan on July 11 revoked the 5-year license issued to US company CCL Oil in 1997 to operate the Pavlodar oil refinery, according to Kanat Bozumbaev, deputy minister of energy, industry, and trade. The office of the prosecutor general said the decision was prompted by CCL's failure to ensure the uninterrupted operation of the refinery, which last year produced only 640,000 tonnes of oil, down 60% from 1998. The state's 87.9% stake in the refinery has been transferred to the ministry, which intends to appoint new management. Operations at the refinery have been suspended for about a month (OGJ Online, June 21, 2000).

Giant Industries Inc. has entered into a nonbinding letter of intent to acquire an interest in Western Refining Co., Dallas, under terms yet to be finalized. Western Refining recently entered into an agreement to acquire the refining assets of Refinery Holding Co. LP, El Paso, and is in negotiations with Chevron Corp. to purchase its El Paso refining assets, says Giant Industries Vice-Pres., Treasurer, and Financial Officer Mark Cox. "For years," said Cox, "these refinery assets have supplied product in El Paso, Tucson, and Phoenix to our retail units and to Phoenix Fuel Co., our Phoenix-based subsidiary and Arizona's largest independent petroleum products distributor. Completion of this transaction is intended to ensure ongoing and increased product availability, as well as add additional refining profits."

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