INDUSTRY BRIEFS

June 26, 1995
CRYSTAL OIL CO., Shreveport, closed the acquisition of First Reserve Gas Co., a Hattiesburg, Miss., gas storage company, for about $78 million (OGJ, May 8, p. 31). Crystal has set aside another $65 million cash to pursue acquisitions in gas storage, transportation, and marketing.

GAS STORAGE

CRYSTAL OIL CO., Shreveport, closed the acquisition of First Reserve Gas Co., a Hattiesburg, Miss., gas storage company, for about $78 million (OGJ, May 8, p. 31). Crystal has set aside another $65 million cash to pursue acquisitions in gas storage, transportation, and marketing.

EXPLORATION

ROYAL DUTCH/SHELL UNITS Sebawang Shell Exploration BV and Pecten Indonesia Sebawang 50-50 signed a production sharing contract with Indonesia's Pertamina covering Block Sebawang II, a 5,000 sq km offshore tract adjoining producing fields on Tarakan and Bunyu islands off Northeast Borneo. Operator Shell will acquire seismic data and drill wildcats the first 3 years of the contract. The license has extension options of 3 or 4 years.

TULLOW OIL PLC, London, 1 Charo wildcat on Block A East Badin (Extension) license in Pakistan flowed 9.5 MMcfd of gas through a 1 1/4 in. choke from a 5 m perforated interval in Paleocene lower Ranikot at about 760 rn. The well is being completed as a potential producer, although further evaluation is required to determine commerciality. The nearest gas pipeline is 8 km away.

MCMORAN OIL & GAS CO. (MOXY), New Orleans, and Phillips Petroleum Co. agreed to a 50-50 venture to explore about 35,000 acres in Terrebonne parish, La. MOXY, which is acquiring 3D seismic data over the North Bay Junop and East Fiddler's Lake prospects, expects the first wildcat to spud early in 1 996.

FUTURES

INTERNATIONAL PETROLEUM EXCHANGE (IPE), London, said a new system that enables simultaneous trading of Brent crude oil contracts on IPE and the Singapore International Monetary Exchange (Simex) got off to a good start. Mutual offset trading began June 9, and 5,979 contracts were traded in the first week, peaking at 2,304 contracts June 15.

DRILLING-PRODUCTION

ENSERCH INDIA INC., a unit of Enserch Exploration Inc., Dallas, agreed to form a 50-50 venture with ONGC Videsh Ltd., a unit of India's state owned Oil & Natural Gas Corp., to find and develop oil and gas in India and other Countries. The venture will focus on projects where partners can apply Enserch's experience in exploiting old fields and developing offshore fields with subsea and floating production technology.

MITCHELL ENERGY & DEVELOPMENT CORP. The Woodlands. Tex., signed a letter of intent to cancel the contract under which it has been selling North Texas gas to Natural Gas Pipeline Co. of America. Natural agreed to pay Mitchell $241.5 million in fixed installments during the next 2 1/2 years beginning July 1. At that time, Mitchell will begin operating Natural's North Texas gas gathering system. Mitchell effective Jan. 1, 1998, is to receive title to the gathering system, which collects gas from about 1,500 wells.

BRITISH GAS PLC delivered to Ste. Tunisienne de I'Electricite et du Gaz (STEG) on June 20 first gas from offshore Miskar field. Miskar went on stream in mid-May with a three platform development linked by pipeline to the Hannibal processing plant near Sfax. STEG agreed to buy as much as 157.5 MMcfd of gas during the first 5 years and 200 MMcfd thereafter

AMOCO NORWAY OIL CO. let a $53 million contract to Heerema Offshore Construction Group Inc., Geneva, for engineering, procurement, construction, and installation of a steel wellhead platform in Valhall field in the Norwegian North Sea. The new platform, to be bridge linked to the Valhall processing platform, will enable Amoco to develop the outer edges of the reservoir. The platform will be delivered in May 1996 and is to be on line early in third quarter 1996.

PETRO-HUNT CORP., Dallas, agreed to buy London's Vanguard Petroleum Ltd.'s 50.3% interest in Magma Oil Co. for $45-53 million, depending on contract options based on cash flow. Magma holds the production license for Yuzhnoye field in western Siberia, where it produces about 3,500 b/d of oil. Yuzhnoye has estimated reserves of 62 million bbl of oil. The sale will enable Vanguard to fund another Siberian project in which it has a 33.3% stake in nine oil fields with estimated total reserves of 960 million bbl.

POWERGEN PLC, London, bought North Sea assets from Oryx U.K. Energy Co. for $120 million. The sale involves a 33.7% interest in Audrey gas field, 10% interest in Galleon gas field, an undisclosed interest in Ensign gas discovery, and a 33.33% interest in unexplored Block 21/5a. The deal adds about 250 bcf of reserves to Powergen's gas portfolio.

NORWAY'S Den norske stats olieselskap AS appraisal well confirmed reserves of 145 million bbl of oil in North Sea Rimfaks area fields. Statoil will submit a development plan for Rimfaks and other discoveries near Gullfaks field by yearend. U.S. Minerals Management Service proposed a rule to clarify who is liable for unpaid or underpaid royalties on federal and Indian mineral leases. The rule would establish who must pay royalties when the royalty payor is bankrupt or is otherwise out of business.

U.K. HEALTH & SAFETY EXECUTIVE (HSE) will prosecute drilling rig operator Sedco Forex Shorebase Support Ltd., Aberdeen, after investigating the Trident XIV jack up operating in Liverpool Bay. HSE said charges relate to complaints in October 1 994 that the rig had no automatic sprinkler system in the accommodation area and the crew was exposed to health risks from asbestos in ceiling tiles and bulkheads.

LNG

SPAIN'S Enagas SA has agreed to buy 40% of output from a planned liquefied natural gas export terminal in Trinidad. Amoco Trinidad LNG Co., British Gas Trinidad LNG Ltd., Cabot Trinidad LNG Corp., and National Gas Co. of Trinidad & Tobago Ltd. plan to produce 3 million metric tons/year of LNG beginning in late 1998. Amoco is to provide gas for the project for 20 years from nearby fields with total estimated reserves of 3.3 tcf. Cabot recently agreed to buy the other 60% of the plant's output.

REFINING

DIAMOND SHAMROCK INC., San Antonio, will build a 20,000 b/d aromatics unit at its 75,000 b/d Three Rivers, Tex., refinery. It will extract benzene, toluene, and xylene for sale to Gulf Coast petrochemical producers. The unit, to be complete in first quarter 1997, will produce 1,100 b/d of cyclohexane grade benzene to be shipped by tank car and 3,000 Wit each of toluene and xylene to be shipped via pipeline to Corpus Christi or barged elsewhere.

LOUISIANA LAND & EXPLORATION CO., New Orleans, hired Morgan Stanley & Co. Inc. to help study alternatives for its 74,000 b/d refinery and terminal near Mobile, Ala., part of LL&E's current review of assets.

CONSUMERS' CO-OPERATIVE REFINERIES LTD. licensed UOP's fluid catalytic cracking technology for revamp of a 17,600 b/cd FCC unit at its 45.200 i Regina, Sask., refinery. The license includes UOP's new Optimix feed injectors and Vortex separation system, the first combined application of those technologies.

WRIGHT KILLEN refining margins for January 1995 were reported incorrectly last month as positive values (OGJ, May 15, p. 62). The cash operating margins should have been reported as: High conversion -46/bbl, low conversion -35/bbl, and regional average -68/bbl.

PETROCHEMICALS

HOECHST CELANESE CHEMICAL GROUP INC. let contract to Molten Metal Technology Inc. (Mi to build a recycling system at its Bay City, Tex., petrochemical complex. The unit will use Mi catalytic extraction process, which involves a molten metal bath to recycle wastes into useful raw materials. Capacity is 24,000 tons/year of hazardous and nonhazardous waste from Hoechst's Texas plants and third party generators. The $25 million system is to be on stream in 1996.

SHELL CHEMICALS EUROPE LTD. will double capacity of its polyethylene terephthalate (PET) plant at Patrica, Italy, to 160,000 metric tons/year. New capacity is due on stream in early 1997, taking Shell's European PET capacity to 200,000 tons/year. The company also is building a 90,000 ton/year PET unit at Point Pleasant, W. Va., due on stream by mid-1996, and designing a world scale plant in Mexico.

OSWIECIM petrochemical complex let contract to ABB Lummus Global, Bloomfield, N.J., for process technology license, basic engineering, and technical and advisory services for a 100,000 metric ton/year styrene monomer plant at Oswiecim, Poland, The unit, slated to start up in late 1997, will use Lum- mus/Monsanto/UOP Classic technology. Snamprogetti SpA will provide detailed engineering, procurement, and construction.

AMOCO CHEMICAL CO. let contract to Stone & Webster Engineering Corp. for front end engineering and preliminary detailed design of an olefins plant revamp at its Chocolate Bayou, Tex., complex. The project will increase ethylene capacity of one train to about 1.75 billion lb/year and polymer grade propylene capacity to 580 million lb/year. The revamp includes Stone & Webster's Advanced Recovery System.

SUD-CHEMIE AG, Munich. and UOP, Des Plaines, III., agreed to develop clays designed for improved life and selectivity to treat xylenes, benzene, toluene, and cumene. The clays catalytically remove olefins from those aromatics to reduce the bromine index and, especially in xylenes, minimize transalkylation to by- products.

HALDIA PETROCHEMICALS LTD. let contract to Bechtel Corp. for project and construction management of its petrochemical complex to be built at Haldia, India. The complex consists of an ethylene plant, several downstream polymer plants, and a 75,000 kw power plant. Completion is slated for 1997.

COMPANIES

MANNVILLE OIL & GAS LTD.'S board recommended acceptance of a $138 million (Canadian), $4.50/share takeover bid by Gulf Canada Resources Ltd., advising shareholders to wait until Gulf's June 20 deadline before selling. There are no competing bids or proposals. Gulf also is to complete acquisition of $56 million in oil and gas assets from Archer Resources Ltd. at the end of June. All the companies are based in Calgary.

CONSOLIDATED NATURAL GAS CO., Pittsburgh, will take a $35-42 million second quarter pretax charge related to a previously disclosed staff cut that has resulted in 479 early retirements and 103 layoffs in six subsidiaries. A seventh subsidiary also is preparing an early retirement program.

KN ENERGY INC., Lakewood, Colo., expects staff cuts and other cost reductions to reduce its operating and maintenance expense by more than $8 million/year starting in 1996. Since its 1994 merger with American Oil & Gas, Houston, KN cut about 445 jobs, or 20% of its staff, as of July 1994. Further staff cuts are being considered.

PIPELINES

TENNECO GAS, Houston, wants to sell its 50% interest in the 904 mile Kern River gas pipeline system by yearend. The company in mid-June sent letters to about a dozen prospective buyers that have until about mid-July to submit level of interest bids. Then Tenneco will invite a few of the most interested parties to view the pipeline's financial records and other documents. Formal bids are due this summer.

A U.S. BANKRUPTCY COURT approved a settlement between Columbia Gas Transmission Corp. (CGT) and its producer creditors under Chapter 11 proceedings. A major Appalachian producer group and 1 7 other of CGT's biggest producer creditors signed the agreement, and another 199 producers indicated support for it. That represents about 87% of the value of claims filed against CGT, with 90% acceptance a condition of reorganization. Meanwhile, the Federal Energy Regulatory Commission approved a settlement between CGT and other parties resolving more than 100 FERC proceedings and about 40 court cases.

U.S. TRANSPORTATION DEPARTMENT'S Research and Special Programs Administration (RSPA) set fiscal 1995 user fees for U.S. pipelines. The fee on gas transmission lines is $95.57/mile and on hazardous liquids pipelines $47.03/mile.

RSPA received a request from Alyeska Pipeline Service Co. to change a waiver regarding pipe coating and cathodic protection for thermally insulated pipe. Alyeska said the thermal insulation is not always effective in preventing corrosion.

OILSANDS

SOLV-EX CORP., Albuquerque, and ITC Inc., Baltimore, reached agreement for ITC to sell and distribute industrial minerals produced by Solv-Ex from oilsands tailings on its lease near Fort McMurray, Alta. The agreement covers certain grades of alumina, titanium dioxide, clay derived materials, and ferrous sulfate. Solv-Ex and partners last month arranged $150 million in financing for an oil/alumina coproduction/upgrader plant to produce 13,500 b/d of synthetic crude oil and alumina (OGJ, May 29, p. 20).

SPILLS

TEXAS A&M UNIVERSITY let a $1 million contract to Unisys Corp. for an oil spill management system at the Texas A&M Center for Marine Training & Safety at Galveston, Tex. Unisys will integrate hardware and software to form solutions for spill crisis management, crisis management training, and research and development. The center is involved in a project with the U.S. Coast Guard to determine viability of a facility on the Gulf Coast as a means of meeting Oil Pollution Act of 1990 spill response requirements.

Copyright 1995 Oil & Gas Journal. All Rights Reserved.