INDUSTRY BRIEFS

SPILLS

A PIPELINE LEAK July 24 near Perm, Russia, spilled several thousand barrels of oil into the Chusovaya River, about 20 m from the pipeline. Moscow's Itar-Tass news agency reported a 30 m wide oil slick traveled about 40 km downstream from the leak, and damage is estimated at 100 million rubles. Cause of the accident is being investigated.

MOSCOW reported an oil spill in the eastern Siberian city of Komsomolsk-on-Amur, where about 1,460 bbl of crude from the local refinery flowed into a nearby lake.

A FREIGHT TRAIN carrying refined products in Gugarak District, northern Armenia, derailed July 25. Five cars overturned and a tank car carrying residual oil exploded, Itar-Tass said. No casualties were reported. The National Security Department is investigating the accident.

COGENERATION

CARDINAL POWER OF CANADA LP, a joint venture of Husky Oil Ltd., Calgary, and Sithe Energies Inc., New York, let a $123 million (Canadian) contract to AGRA Industries Ltd. and Bracknell Corp. to design and build a 156,000 kw cogeneration plant at Cardinal, Ont. The plant will burn about 32 MMcfd of gas from TransCanada PipeLines Ltd.'s system to provide steam for the adjacent Canada Starch Co. Inc. food processing plant and electricity for Ontario Hydro's power grid.

PIPELINES

FEDERAL ENERGY REGULATORY COMMISSION denied requests of Columbia Gas Transmission Corp. and Columbia Gulf Transmission Co. for a 3 month extension of their Order 636 filing time and is adhering to its compliance deadline of Oct. 1. Columbia cited its bankruptcy proceedings as one reason it needed an extension (OGJ, July 20, p. 29). A July 20 FERC order also rejected a bid by producers to get a settlement judge appointed to help speed Columbia's reorganization.

SYRIA let a $25 million contract to Turkey's Atilia Dogan AS to lay a 204 km, 18 in. gas pipeline between Palmyra and the Maharadi power station. The pipe will be supplied by Al Furat Petroleum Co., owned by the Syrian government and Shell Petroleum Co. The project is to be complete in 6 months. Agence France Presse reported Atilia Dogan is the first Turkish company to win a contract in Syria.

PT TRANACO, an Indonesian pipeline construction company, signed a letter of intent covering a $19.5 million contract with a joint venture of Semabawang Maritime Ltd., Singapore, PT-CTR, Indonesia, and Minson Construction Pty. Ltd., Melbourne, to construct the 71 km onshore portion of the Trans Java Gas Pipeline (TJP) from Porong to Gresik in Surabaya, Java. Work is to begin this month and be complete in August 1993. The TJP group is laying the pipeline on behalf of Indonesian state oil company Pertamina,

VALERO ENERGY CORP., San Antonio, said its 5.6 km gas pipeline into Mexico from its main Texas network was scheduled to start up Aug. 1, initially carrying 50 MMcfd (OGJ, Apr. 6, p. 21). The line connects with the network operated by Petroleos Mexicanos. Volumes are expected to increase fourfold to sixfold within 2 years. Line capacity is 400 MMcfd.

DRILLING-PRODUCTION

PERTAMINA plans to develop Guruh field on the Ogan Komering contract area in South Sumatra after testing its 2 Guruh appraisal well, which flowed 2,545 b/d of 30.2 gravity oil and 811 Mcfd of gas through a 1 in. choke from 17 m of net pay in Miocene Baturaja. Total depth is 1,742 m. The well is 1.6 km north of the 1 Guruh discovery well (OGJ, Dec. 23, 1991, p. 32). Production is to begin early in 1993.

SUN OIL BRITAIN LTD.'S 16/21a-20z appraisal well in Stirling field in the North Sea flowed at a rate of 6,000 b/d through a 44/64 in. choke with 750 psi wellhead pressure from Devonian. The well is a 3,000 ft sidetrack drilled horizontally from a prior appraisal at 8,000 ft. Stirling field's Devonian reservoir underlies Balmoral field in Blocks 16/21a and 16/21c. The well is about 1 km from the floating production vessel operated by Sun in Balmoral field.

NORCEN ENERGY RESOURCES LTD., Calgary, was to spud British Columbia's first coalbed methane well late last month. The Norcen Elk a-64-E/82-d-7, in the southeast corner of the province, will be drilled to 622 m into Cretaceous Mist Mountain, where medium BTU bituminous coal is expected. The well, including testing, is to cost $1.5 million.

BP EXPLORATION received U.K. government approval to develop Hyde gas field and transfer 45% of license interests to Norway's Den norske stats oljeselskap AS. Work has begun under a contract with UIE (Scotland) Ltd. and Kvaerner H&G Ltd. whereby all parties share profits. The project is to be complete next summer for start-up in October 1993. Hyde will be developed with a mostly unmanned platform from predrilled horizontal wells. Production will move through a new pipeline to West Sole to BP's Easington terminal. Alliance Gas Ltd. bought all of Hyde's gas production (OGJ, June 15, Newsletter).

PETROLEOS BRASILEIRO SA called an international tender for bids on a semisubmersible drilling rig to conduct workovers in the Campos basin off Brazil. It would boost the Brazilian state oil company's offshore fleet to 33 active rigs. Of 23 rigs in the Campos basin, 10 serve as deepwater floating production units, two are carrying out workovers, and 11 are drilling wells, eight of them in water exceeding 400 m, the deepest the 4-RJS-441 wildcat in 1,160 m of water. Petrobras also has six rigs drilling off Bahia, Sergipe, and Rio Grande do Norte states.

MALLARD BAY DRILLING INC., Port of Iberia, La., a unit of Energy Ventures Inc., Houston, moved two self-contained platform rigs to Talara, Peru, from New Iberia, La., on the U.S. Gulf Coast. The units will work on Block Z-2 in the Pacific Ocean off Peru under a 2 year day rate contract with Petroperu SA subsidiary Petromar SA.

GAS PROCESSING

PRESIDIO OIL CO., Denver, completed the merger of its Mountain Gas Resources Inc. unit with a new unit of Morgan Stanley Leveraged Equity Fund 11 LP in an $80.7 million transaction (OGJ, Apr. 13, p. 37). Mountain Gas owns and operates Presidio's gas gathering and processing facilities in the Green River basin, Southwest Wyoming, and markets natural gas and natural gas liquids.

ASSOCIATED NATURAL GAS INC., Denver, agreed to buy all the gas processing and gathering assets of Gerrity Oil & Gas Corp., Denver, for $5.5 million, Another $3 million will be paid subject to Gerrity's development meeting certain throughput commitments. The deal includes two gas processing plants rated at 8 MMcfd and 1.6 MMcfd and 200 miles of gas gathering lines. The assets are in the Wattenburg area of the Denver-Julesburg basin in Colorado.

COMPANIES

JAPAN'S JGC Corp. plans to buy a significant minority interest in M.W. Kellogg Ltd., a move Kellogg said will heighten its international profile. Negotiations are under way.

SUI NORTHERN GAS PIPELINES LTD., Karachi, issued 51 million shares of stock in a public offering that is part of Pakistan's continuing privatization of its gas industry. Additional interests will be offered to joint venture partners British Gas plc, France's Sofregas, and Canada's Nova Corp. Resulting interests are expected to be held 40% by Pakistan, 40% by the public, and 20% by the foreign joint venture companies. Sui Northern, which handles all processing, transmission, and distribution of gas in northern Pakistan, is expanding its system capacity to 800 MMcfd from 450 MMcfd at a cost of $86 million the next 5 years.

SCHLUMBERGER LTD. signed a definitive agreement to acquire Seismograph Service Ltd. and GeoQuest Systems Inc. from Raytheon Co., Lexington, Mass., pending regulatory approval. About 1,400 Seismograph Service employees operate three marine seismic vessels, 12 land seismic crews, and data processing centers in 11 countries. GeoQuest, with 160 employees, develops, markets, and services integrated geophysical and petroleum computer systems in more than 30 countries.

GOVERNMENT

SOUTH AUSTRALIA will sell its remaining 57% interest in South Australian Gas Co. (Sagasco) in a privatization expected to net the financially strapped state government $295 million (Australian). The government's interest stems from the mid-1988 merger of state owned South Australian Oil & Gas Corp. with the publicly traded Sagasco, with the government holding an 82% stake in the resulting Sagasco. A subsequent sale of 25% interest came in June 1991. The move marks reversal of the state Labor government's insistence on control over energy resources.

BANGLADESH'S GOVERNMENT invited local and foreign investors to buy interests in its five state controlled fertilizer companies and participate in a $170 million revamp of its natural gas based fertilizer complex at Fenchuganj, Khulna district. The plant, built 30 years ago, is hazardous to operate and no longer economic. The revamp would boost urea production to 180,000 metric tons/year. Current capacity is not disclosed. About 30% of funding would come from international loans.

PAKISTAN'S GOVERNMENT will reduce its direct interest in Mari Gas Co. Ltd. (MGC), Karachi, to 20% from 40% via public offering. MGC is developing Mari gas field at a cost of $50 million with production projected at 100 MMcfd. Other interests in MGC are held by Fauji Foundation 40% and state controlled Oil & Gas Development Corp.

AGENCY FOR INTERNATIONAL DEVELOPMENT is providing the U.S. Department of Energy $7.85 million to fund energy projects in eastern Europe. DOE said $4.85 million will be used to help central and eastern European countries improve energy efficiency and develop energy trade, while $3 million will apply to U.S. technology to reduce air pollution from coal burning facilities in Krakow, Poland.

PETROCHEMICALS

CHINA received a $69 million syndicated loan from a seven member international banking group to buy equipment and technology for a 120,000 metric ton/year polyethylene plant and a 10,000 ton/year butylene plant to be built at the $250 million Zhongyuan ethylene complex in Puyang, Henan province. The credit is to finance 85% of the value of a supply contract signed earlier this year between China National Technical Import & Export Corp. and Italy's Snamprogetti.

MOBIL CORP. started up a 2,000 b/d methyl tertiary butyl ether unit at its 300,000 b/d joint venture export refinery at Yanbu, Saudia Arabia. Mobil and Saudi Arabian Marketing & Refining Co. each hold a 50% interest in the refinery's production.

CHINA PETROCHEMICAL CORP. (Sinopec) let a contract to South Korea's Daelim Engineering Co. Ltd. to provide a 25,000 metric ton/year polystyrene unit for the third phase of a styrene project at the Daqing petrochemical complex in Heilongjiang province. Beijing's China Daily reported it is South Korea's first deal in China's petrochemical industry. The newspaper said a group led by Badger Engineering Inc. is providing a 60,000 ton/year styrene unit for the complex.

EXPLORATION

HAMILTON OIL'S 110/15-6 wildcat, 4 miles off the west coast of England in Morecambe Bay, flowed at rates of as much as 1,370 b/d of oil through a '%4 in. choke from one zone and 78 MMcfd of gas through various chokes from a second zone. The well is being sidetracked for further reservoir appraisal. Hamilton holds a 50% interest in the block. Its partners are Lasmo North Sea plc 30% and Monument Resources Ltd. 20%.

STEWART PETROLEUM CO., Anchorage, Alas., 1 West McArthur River Unit wildcat on the west side of Alaska's Cook Inlet basin produced at a rate of 2,600-3,400 b/d on artificial lift from Hemlock conglomerate. The well, believed to be the first commercial discovery by an Alaskan independent, was drilled directionally from the West Foreland Peninsula to an offshore bottomhole location. Total depth is 13,742 ft. A second well and pipeline are planned this year, and more drilling is planned in 1993.

REFINING

GERMANY'S Raffineriegesellschaft Vohburg/Ingolstadt GmbH (RVI) let a contract to Badger Co. Inc. to provide detailed engineering, design, procurement, and construction management services for installation of a fluid catalytic cracker and revamp of an isomerization unit at its 120,000 b/d Ingolstadt refinery. Added conversion capacity of about 19,710 b/d and an increase in octane number will allow RVI to improve its response to market demands. Construction is to be complete in June 1993. Total cost of the project is more than $100 million.

SHELL REFINING (AUSTRALIA) PTY LTD. added a $371 million 35,000 b/d residue catalytic cracking unit at its 110,000 b/d Geelong refinery near Melbourne. The unit replaces a 25,000 b/d unit.

FARMERS UNION CENTRAL EXCHANGE (Cenex), St. Paul, Minn., purchased Farmland Industries Inc.'s 30.4% interest in National Cooperative Refinery Association, boosting Cenex's interest in the 75,000 b/d McPherson, Kan., refinery to 74.2%. Farmland will continue to use products from the refinery, and Cenex is drawing refined products from the 62,000 b/d Farmland refinery at Coffeyville, Kan. Cenex said the deal increases distribution efficiency and balances supply and demand for both regional cooperatives.