INDUSTRY BRIEFS
EXPORTS-IMPORTS
AMERICAN PETROLEUM INSTITUTE reported U.S. oil imports rose sharply in February while U.S. crude production continued its sharp decline. Total petroleum imports averaged 8.147 million b/d, up 20% from 6.754 million b/d a year ago. U.S. crude oil production recorded its largest year-to-year decline in 2 1/2 years, dropping nearly 6% to 6.925 million b/d from 7.361 million b/d in February 1992.
ENERGY INFORMATION ADMINISTRATION predicts net U.S. petroleum imports will reach 7.9 million b/d in 1994, not crude imports as reported incorrectly (OGJ, Feb. 22, Newsletter).
GAS STORAGE
HNG STORAGE CO., Houston, will develop a gas storage site on property leased from Union Texas Products Corp. at the Sulphur Mines salt dome near Lake Charles, La. HNG will convert two caverns currently used for brine operations. The facility will have capacities of 6.5 bcf of working storage and 500 MMcfd of injection. Storage will be available to the U.S. Northeast and Southeast via Louisiana main lines of Transcontinental Gas Pipe Line Corp., Texas Eastern Pipeline Co., Tennessee Gas Pipeline Co., and Florida Gas Transmission Co. Service is to begin in third quarter 1994.
RUHRGAS AG, Essen, signed a long term agreement to store as much as 35 bcf of gas in depleted Breitbrunn/Eggstatt gas field near Rosenheim, southern Germany, starting in 1996. Partners RWE-DEA AG and Mobil Erdgas-Erdol GmbH said storage conversion and installation of surface facilities will require 400-500 million deutschemarks ($240-300 million) in capital outlays. Maximum injection rate will be 8.8 MMcfh, maximum production rate 17.6 MMcfh.
FUTURES
INTERNATIONAL PETROLEUM EXCHANGE, London, inspired by growing competition in the U.K. gas market, is to study prospects for European natural gas futures trading in London. Because gas is traded under producer contracts, IPE said futures trading is at least 5 years away.
TRANSPORTATION
U.S. COAST GUARD changed its rules requiring pilots in Alaska's Prince William Sound, site of the Exxon Valdez accident in March 1989. It said if a federally certified pilot is not on the bridge, tankers may traverse the sound if two licensed deck officers are on the bridge and one is giving undivided attention to navigation.
ESTONIAN TRANSOIL AS, a subsidiary of Neste Corp., Espoo, Finland, last week started moving petroleum products by truck to markets in Estonia. Hauling started after completing the first construction stage of an oil terminal at Muuga Harbor in Tallinn, Estonia, including eight storage tanks with combined capacity of more than 25,000 bbl, six tanker loading points, a pumping plant, and offices. When complete, the new facility is to supply Estonia with seaborne petroleum products from Neste refineries, replacing products available mainly by rail from Russia or other members of the Commonwealth of Independent States.
COMPANIES
TALISMAN ENERGY INC., Calgary, made a takeover bid for Encor Inc., also of Calgary, offering new Talisman shares instead of cash. One Encor shareholder, BCE Inc., Montreal, said it will accept the Talisman offer. BCE valued the payment for its 18.6% of Encor common stock and Talisman shares for Encor preferred shares at $234 million (Canadian). The deal is subject to approval by other shareholders and regulatory authorities.
U.S. FIFTH CIRCUIT COURT OF APPEALS upheld a $22.5 million judgment, plus interest, to Austral Oil Co., Concise Oil & Gas Partnership, and others in a lawsuit against Louisiana Intrastate Gas Corp. A lower court in February 1991 awarded them damages as interest owners in Northeast Montegut field, Terrebonne Parish, La., for breach of contract by LIG on prices paid for gas under long term contract. Austral and Concise are entitled to about 30% each of the judgment.
BRITISH PETROLEUM CO. PLC paid 722,740 ($1,047,973) into the pension fund of former chairman and chief executive Robert Horton. This follows a compensation payment of 780,000 ($1,131,000) last year after Horton was ousted from office (OGJ, July 6, 1992, p. 35).
PETROCHEMICALS
FAUJI FERTILIZER CO. LTD. and Jordan Phosphate Mines Co. Ltd., both of Rawalpindi, Pakistan, signed a memorandum of understanding to form a joint venture company to build a $400 million urea/diammonium phosphate plant (DAP) at Port Qasim, Pakistan. Capacities will be 445,000 metric tons/year of DAP and 346,000 tons/year of urea. Start-up is scheduled for yearend 1996. The new company also will build a phosphoric acid plant in Jordan to provide feedstock for the fertilizer unit.
SAUDI PETROCHEMICAL CO. (Sadaf), a joint venture of Saudi Basic Industries Corp. and Shell Oil Co.'s Pecten Arabian Co. subsidiary, named M.W. Kellogg Co., Houston, engineering contractor for a 700,000 metric ton/year grassroots methyl tertiary butyl ether/ethyl tertiary butyl ether plant to be built by 1995 at Sadaf's Al-Jubail, Saudi Arabia, petrochemical complex. Pending final project approval, Kellogg has begun design and engineering on the plant, which is to include fluid bed dehydrogenation technology. Kellogg also is to assist in procurement, construction, and start-up.
GOVERNMENT
U.S. INTERIOR DEPARTMENT and Alabama resolved their dispute over the state/federal boundary in the Gulf of Mexico. The division is the same one in effect since 1983 and does not require operators to adjust lease boundaries or royalty payments to state and federal treasuries.
GAS PROCESSING
MAXUS ENERGY CORP., Dallas, started up its 190 MMcfd Sunray, Tex., gas processing plant in the Texas Panhandle. The plant is producing helium and a mixed natural gas liquids stream and for 1993 will average 175 MMcfd throughput. It replaces processing provided since second quarter 1987 by Diamond Shamrock R&M Inc.'s nearby Moore County gas processing plant under an agreement that sent much of the production to Diamond Shamrock's adjacent McKee refinery. Diamond Shamrock has shut down the 375 MMcfd Moore County plant, has no immediate plans to restart it, and has disclosed no disposition of the equipment.
CANADA'S National Energy Board scheduled a hearing May 5 in Fort St. John, B.C., on Westcoast Energy Inc.'s Pine River gas processing plant and Grizzly pipeline system proposed expansion projects near Chetwynd, B.C. The project will cost $232 million (Canadian) to increase the plant's processing capacity to 560 MMcfd from 260 MMcfd. The Grizzly pipeline project will cost $67.6 million to lay 46 miles of 10-24 in. pipeline.
CIMARRON GAS COS. INC., Tulsa, bought a 44.4% interest in the Camrick gas processing plant and gathering system in the Oklahoma Panhandle. It purchased Texaco Exploration & Production Inc.'s 35.2% interest and 9.2% owned by Trident NGL Inc., The Woodlands, Tex. The system includes 170 miles of pipeline in Texas and Beaver counties, Okla., and a 14 MMcfd turboexpander plant. Cimarron, a subsidiary of Zapata Corp., Houston, will become plant operator.
EXPLORATION
INDONESIA'S Pertamina is to step up exploration in a bid to stem the country's 15-20%/year oil production decline, Nikkei Weekly, Tokyo, reported. Exploration this year will concentrate on deepwater prospects in a band stretching from south of Timor Island to the Aru Islands.
ENERGY DEVELOPMENT CORP. (EDC), Houston, and partners logged 77 net ft of gas pay in a wildcat on South Pass Block 34 off Louisiana in the Gulf of Mexico. The well was temporarily abandoned, pending tests of an offset prospect on South Pass Block 47 to determine the best site for a production platform. Operator EDC and Louisiana Land & Exploration Co., New Orleans, each own 35% interest in Blocks 34 and 47 and Nuevo Energy Co., Houston, 30% in both tracts.
DRILLING-PRODUCTION
ARCO BRITISH LTD. tested appraisal well 44/18-2 in the U.K. North Sea at a rate of 34 MMcfd of gas through a 52/64 in. choke from Carboniferous sandstone. The West Bonanza jack up drilled the well to 12,535 ft in 69 ft of water. More drilling is planned. Partners are operator ARCO 60%, St. James's Oil & Gas Ltd., London, 25%, and Goal Petroleum plc, London, 15%.
BRITISH PETROLEUM CO. PLC and Phillips Petroleum Co. U.K. Ltd. agreed to exchange interests in four U.K. offshore blocks. BP boosted its interest to 65.99% from 55.01% in Block 23/22a, which contains the 30 million bbl Medan prospect. The company increased its share to 60.98% from 50% in Block 30/3a, which contains the 50 million bbl Blane prospect. In return, Phillips acquired interests of 35% in Block 15/28c and 50% of Block 15/26a, both near Phillips' Renee and Rachel prospects.
GULF CANADA RESOURCES LTD., Calgary, approved a conditional agreement to sell its interests in the Kulluk drilling rig and two icebreaker support vessels to Amoco Canada Petroleum Co. Ltd. subsidiary Canadian Marine Drilling Ltd., Calgary. This sale, along with the sale of undisclosed western Canada producing acreage and its 22.8% interest in Home Oil Co. Ltd., Calgary, is worth about $400 million (Canadian) to Gulf Canada. Proceeds will be used mainly to reduce debt.
HAMILTON OIL CO. LTD., London, Lennox field appraisal well 110/157 in the Irish Sea's Liverpool Bay flowed 2,020 b/d of oil and 850 Mcfd of gas through a 1/2 in. choke. Partners are operator Hamilton 50%, Lasmo North Sea plc 30%, and Monument Resources Ltd., London, 20%.
BP EXPLORATION OPERATING CO. LTD. last week shut down its Forties oil pipeline system to tie in Unity riser platform and a 470,000 b/d production train at Kinneil terminal. The 23 day shutdown will affect eight producing fields, causing 9 million bbl of production to be deferred. Forties pipeline throughput was 460,000 b/d but will reach 960,000 b/d in the mid-1990s. Bruce, Everest, Lomond, and Tiffany fields will send first oil through Forties this year, while Scott and Nelson fields will begin production next year.
PIPELINES
SPAIN'S ENAGAS subsidiary EMPL let a detail design contract for the $160 million, 47 km Strait of Gibraltar pipeline crossing to a joint venture of the U.K.'s JP Kenny and Spain's Internacional de Ingenieria y Estudios Tecnicos SA. The pipeline will move gas from Algeria via Morocco across the strait into southern Spain, where it will connect to the nation's grid system and help supply southern Europe as well. First flow is expected in 1995. Kenny has completed preliminary design of the pipelines in cooperation with French firms Sofregaz and Beicip-Franlab.
EL PASO NATURAL GAS CO., El Paso, sought approval from the U.S. Federal Energy Regulatory Commission to construct a $57 million, 36 mile, 24 in. pipeline expansion to supply as much as 300 MMcfd to Mexico. As much as 175 MMcfd will be dedicated to the Samalayuca power plant, about 30 miles south of Ciudad Juarez, and its planned Samalayuca 11 power plant expansion.
EL PASO NATURAL GAS agreed to buy Enron Corp.'s 50% interest in Mojave Pipeline Co., Bakersfield, Calif., for about $40 million. Subject to regulatory agency and board of directors' approval, the sale will close by June 1. Mojave operates a 400 MMcfd capacity, 361 mile interstate pipeline from Topock, Ariz., to Kern County, Calif. It plans a northward expansion from the end of its system near Bakersfield (OGJ, Mar. 22, p. 43).
PACIFIC GAS & ELECTRIC CO., San Francisco, will ask FERC for a hearing on Mojave Pipeline's proposal to lay a gas pipeline system in northern and Central California. The line will serve large industrial gas customers supplied by PG&E. The utility said FERC approval of Mojave's plan would raise the price of natural gas service to residential, commercial, and small industrial customers.
REFINING
SHELL NEDERLAND RAFFINADERIJ BV let contract to Fluor Daniel BV, Haarlem, Netherlands, to serve as managing contractor for construction of a $1.5 billion hydrocracker and oil gasification project at its Pernis refinery near Rotterdam (OGJ, Jan. 25, p. 40). Fluor Daniel also will provide design services for the gasification unit. Award of the contract marks the start of detail design, with plant construction to begin in spring 1994.
LNG
COLUMBIA LNG CORP., Wilmington, Del., will conduct an open season Mar. 31 through 4 p.m. Apr. 14 for firm peaking and terminating capacity to become available in fall 1994 with reactivation of operations at its Cove Point, Md., LNG terminal on Chesapeake Bay. Direct and indirect interconnects with major pipelines will allow Cove Point to serve markets on the U.S. eastern seaboard and, by displacement, markets in the Midwest and South. Columbia LNG is owned 90.8% by Columbia Gas System Inc. and 9.2% by Shell LNG Co., a subsidiary of Shell Oil Co.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.