INDUSTRY BRIEFS

LPG

MITSUBISHI CORP. plans to form a liquefied petroleum gas venture in China with Shanghai Petrochemical Co. and Continental Grain Co. of the U.S. The venture is expected to initially import 400,000 metric tons/year, rising to 1 million tons/year, of LPG from the Middle East and Indonesia for sale in China. An import terminal with capacity to store 50,000 tons of LPG is to be built in Shanghai by yearend 1997.

TERMINALS

PHILLIPS PETROLEUM CO. U.K. LTD. let contract to AMEC Process & Energy Ltd., London, to replace an effluent treatment plant at its Seal Sands crude oil terminal at Teesside, U.K. The contract covers engineering, procurement, construction, and commissioning of the plant. This is due for completion in September 1996 to meet new environmental standards expected by 2000.

GAS PROCESSING

PETRONAS GAS BHD. let a $610 million contract to a group led by Snamprogetti SpA to build a grassroots gas processing complex at Kg Tok Arun, Paka, Dungun, and Terengganu Darul Iman on the Malay Peninsula's eastern coast. The project includes two 500 MMcfd processing plants for recovery and fractionation of ethane, propane, butane, and natural gasoline, a 500 MMcfd treatment plant for gas dewpoint control, product export facilities at the Kerteh marine terminal, and connecting pipelines. The contract calls for gas sales within 30 months and project completion within 42 months.

REFINING

PAKISTAN REFINERY LTD. plans to spend $53 million on a revamp and expansion of its Karachi refinery to 54,000 b/d from 42,000 b/d. The plan follows a report by Foster Wheeler Energy Ltd. and focuses on increasing yield of light products.

JKX OIL & GAS CO., Guildford, U.K., won a tender from the government of Russia's Kalmyk republic to build a $35 million, 4,600 b/d refinery at Ulan Khol, Kalmykia. The refinery is expected to fully meet local demand for refined products. JKX also plans to participate in development of Kalmykia oil resources, estimated at 11 billion bbl of crude oil with average paraffin content of 16%.

TAIWAN'S state owned Chinese Petroleum Corp. (CPC) started trial runs of a 25,000 b/d reformer at its Taoyuan refinery. The new unit is expected to cut CPC's imports of unleaded gasoline by about 35%.

NIGERIAN NATIONAL PETROLEUM CORP. (NNPC) is implementing a new refined products distribution system as its trouble-plagued 110,000 b/d Kaduna refinery goes into turnaround. NNPC will ship products from Port Harcourt refineries to Lagos and import products directly via Atlas Cove, the central berthing point at Lagos. From there, products will move via pipeline to lank farms for further delivery in tanker trucks to northern states that are experiencing a severe products shortfall.

GARY-WILLIAMS ENERGY CORP., Denver, is negotiating a definitive agreement to buy Kerr-McGee Corp.'s 43,000 b/cd Wynnewood, Okla., refinery. That follows collapse of talks between Kerr-McGee and United Refining Co., Warren, Pa., over United's bid to buy the refinery (OGJ, May 15, p.25).

AN EXPLOSION and fire July 1 seriously injured a unit manager at Russia's Yaroslavl refinery. An isobutane leak during repairs in the control room of an alkylation unit apparently ignited, sparking the explosion. The fire was extinguished in less than 3 hr, and an investigation is under way.

EXPLORATION

CAIRN ENERGY PLC signed two production sharing contracts with Bangladesh covering Blocks 15 and 16. The contracts call for spending of about $28 million in 7 years for exploration and development on Block 15, which contains Semutang gas field (OGJ, May 22, p. 31), and seismic surveys on Block 16.

INDIA'S ONGC Videsh Ltd. acquired a farmout from British Gas plc in the North Zaafarana concession in the Gulf of Suez off Egypt. ONGC will earn a 50% interest in the license's exploration acreage by funding one commitment well to be drilled on the Balah prospect this year. British Gas began oil production from North Zaafarana field in November 1994 using a wellhead platform linked to a production storage and offloading vessel.

OXY USA and the Minerals Management Service settled a long dispute regarding canceled U.S. offshore leases. Oxy agreed to drop its claims against the government for not allowing it to drill leases it purchased off North Carolina and Florida. In exchange, MMS released Oxy from several claims for additional royalties due on its federal oil and gas leases, including some gas contract settlement price disputes. MMS and Shell Oil Co. reached a similar out of court settlement last April.

COMPANIES

MESA INC., Irving, Tex., filed suit in a Dallas federal court against David Batchelder, Dennis Washington, Marvin Davis, and others, alleging their group violated U.S. securities laws in connection with their acquisition and holdings of MESA stock. Batchelder is a former officer of MESA who helped MESA Chairman T. Boone Pickens launch takeover bids for several major oil companies in the 1980s. A few days before MESA filed its suit, Davis and Washington, who combined own 9.4% of MESA stock, formed a group to maximize shareholder value of the financially troubled company.

RUSSIA'S BASHKORTOSTAN REPUBLIC merged its upstream petroleum companies into Bashneft oil production association in an effort to cut costs and revive oil production, With the measure, Bashneft took over Ishimbaineft, which produces about 16,000 b/d of oil, and two small independent producers. Bashneft expects to produce about 340,000 b/d of oil in 1995. Bashkortostan oil production has been declining at an average rate of 40,000 b/d/year in recent years. A tenfold increase in local excise taxes effective Apr. I could result in upstream job losses totaling 20,000, Bashneft said.

WYNN-CROSBY 1994 LTD., an affiliate of Wynn-Crosby Energy Inc., Dallas, acquired Cherokee Resources Inc. for $33 million, less $8.3 million for price adjustments including cash flow through closing, from Santa Fe Energy Resources Inc., Houston, and several institutional investors.

HOME OIL CO. LTD., Calgary, is seeking other bidders to stave off a takeover bid of $757 million (Canadian) from Amoco Canada Petroleum Ltd. Home said Amoco's $16.50/share cash offer undervalues its assets. Amoco plans also to assume $380 million of Home long term debt, hiking vallue of the bid to about $1 14 billion.

DRILLING-PRODUCTION

WOODSIDE PETROLEUM PTY. LTD. expects to start up Wanaea/Cossack oil fields complex off Western Australia in September with initial production of 100,000120,000 b/d. Production will flow through subsea wellheads tied to the Cossack Pioneer floating storage and offloading vessel. Combined reserves of the two fields are estimated at 240 million bbl of oil.

PHILLIPS PETROLEUM CO. U.K. LTD. installed a steel production platform in Judy field on U.K. North Sea Block 30/7a. It consists of a 7,800 metric ton jacket, 9,400 ton integrated deck, and 3,500 ton gas treatment module. It will start production from Judy and nearby satellite Joanne field in early 1996 (OGJ, June 12, p. 38).

BRITISH GAS expects to boost production from Miskar gas field off Tunisia to about 160 MMcfd by yearend. Four wells are producing, eight are to be on line by yearend, and another four will start up in February 1996. The $600 million development will make Tunisia self-sufficient in gas supply. The project, which delivered first gas to Tunisian electric utility STEG last month, also produces condensate and sulfur (OGJ, June 26, p. 24).

U.K. NORTH SEA oil production fell almost 10% from April to 2.4 million b/d in May, estimated Royal Bank of Scotland plc, Edinburgh. The bank attributed the fall to field shutdowns for routine maintenance. Gas production fell 20% to 5.7 bcfd as seasonal demand declined. The bank said combined revenues from U.K. North Sea oil and gas production fell 13% from April to average 38.2 million/day ($61.1 million/day) in May.

SHELL EXPLORATION & PRODUCTION U.K. LTD. let contract to Petroleum Geo-Services AS, Oslo, for a high definition seismic survey of Tern and Eider fields in the U.K. North Sea. Specifications call for eight closely placed streamers with a single acoustic source for high fold recording. The contract follows a similar survey Shell is conducting in nearby Brent field, which PGS claims is the first survey of its type.

GASGO PTY. LTD., a unit of Northern Territory Power & Water Authority (PAWA), signed a contract with Santos Ltd. and Magellan Petroleum Australia Ltd. to buy another 20 bcf of gas from Mereenie field in the Amadeus basin of Australia's Northern Territory to 2009. It augments existing Amadeus basin contracts to supply Gasgo 53 bcf from Mereenie and 176 bcf from Palm Valley field. The government is negotiating with producers to secure about 130 bcf needed to meet PAWA demand in 2010-15.

PETROCHEMICALS

NIGERIA'S $1.38 billion Eleme petrochemical complex will begin test production of polyethylene and polypropylene in August, Japan's embassy in Nigeria reported. A Japanese group is building the complex with financing from Japan Ex-Im Bank. The project has been delayed from an early 1 995 start-up for lack of natural gas liquids feedstock from Nigeria Agip Oil Co. operated fields in Rivers state. The first loan payment was due in April, although such payments were to be made with proceeds from sale of the project's output. Japanese and Nigerian officials are negotiating rescheduling of payments.

EASTMAN CHEMICAL CO.'S Texas Eastman division let contract to ABB Lummus Global, Bloomfield, N.J., for technology, basic engineering, detailed design, and procurement services for expansion of Eastman's Longview, Tex., ethylene plant. Ethylene capacity will increase by 200 million lb/year and propylene capacity by 60 million lb/year. Construction, to begin early next year, is to be complete in mid-1997.

STERLING CHEMICALS INC. and BP Chemicals Inc let contract to John Brown for engineering, procurement, and construction management of a 150 million gal/year joint venture methanol plant to be built at Sterling's Texas City, Tex., petrochemical complex. Most of the product Will be used as feed for Sterling's acetic acid plant. BP will use the remainder for its worldwide acetic acid business and for the merchant market. Existing equipment at Sterling's plant will be used for construction, to be complete by June 1996.

PT HUMPUSS AROMATIC let contract to Bechtel Corp. for engineering, procurement, and construction of an $850 million grassroots condensate processing and aromatics complex at Arun, Indonesia. The contract includes helping Humpuss secure a guaranteed supply of condensate feedstock. Heavy naphtha product will be converted to high purity aromatics - mainly paraxylene and benzene - and raffinates for manufacturing ethylene, propylene, an other polymer feedstocks. Bechtel will operate the 70,000 b/d plant and assist with mar keting fuel products. The project is scheduled for completion in 36 months.

TAIWAN'S Industrial Development Bureau (IDB) proposed a plan under which foreign petrochemical firms investing in Taiwan could qualify for a 5 year tax holiday. Companies could obtain the exemption from Taiwan's business income tax by setting up regional headquarters in Taiwan. IDB is drafting detailed regulations, and the plan could take effect as early as August.

PIPELINES

BHP PETROLEUM PLY. LTD. started laying a 215 km, 450 mm gas pipeline from Karratha to Port Hedland in Northwest Western Australia. It's part of BHP's $310 million (Australian) Pilbara energy project, which includes construction of a 105,000 kw gas fired power plant at Port Hedland. A second phase calls for construction of a comparably sized power plant at Newman that will take gas from the $400 million Dampier-Goldfields pipeline under construction.

WESTERN AUSTRALIA'S GOVERNMENT approved plans to expand capacity of the 1,500 km Dampier-Bunbury gas pipeline by 10% with a $100 million (Australian) upgrade. Capacity will rise to about 442 MMcfd from about 409 MMcfd by May 1997. Work involves adding two 6,700 hp compressors and upgrading four of five existing compressors.

EXPORTS-IMPORTS

TAIWAN'S CPC is losing its monopoly on natural gas imports. A government contract giving CPC that monopoly expires in February 1996. The ruling Nationalist Party has told officials of at least three companies controlled by the party to form a new company to import gas in competition with CPC. The company imports all of Taiwan's gas as LNG and sells it after regasification.

NGL

DIAMOND SHAMROCK INC., San Antonio, will expand natural gas liquids Processing and storage capacity at its Three Rivers, Tex., refinery and lay an ethane pipeline from the refinery to Union Carbide Corp.'s Seadrift pipeline at Odem, Tex. Diamond Shamrock will boost NGL processing capacity at Three Rivers to 8,000 b/d from 5,000 b/d by modifying a deethanizer. Propane storage capacity will increase by 6,000 bbl. Work on the 6 in., 50 mile, 3,500 h/d ethane pipeline is under way. All work is to be complete by yearend.