INDUSTRY BRIEFS

Alternate fuels

Gaz de France and Air Liquide agreed to form a 50-50 joint venture (JV) to supply and market natural gas for motor fuel use in heavy vehicles. The JV will offer turnkey packages for construction of service stations and purchase of natural gas and maintenance of equipment. Service stations will offer natural gas in both liquid and gaseous forms.

Refining

Marathon Oil Co. and Ashland Inc. formed Marathon Ashland Petroleum LLC, a new refining and marketing company, this month (OGJ, May 26, 1997, p. 27). Marathon holds a 62% share, and Ashland has a 38% interest.

Dubai's
ENOC Condensate Co. will expand its new condensate refinery. The decision was made before construction of the plant was completed. Technip SA, Paris, is building the 60,000 b/d, $137 million condensate refinery for ENOC. ENOC asked Technip to increase plant capacity to 120,000 b/d for another $46 million. The plant will process condensate from Persian Gulf producers to provide kerosine, diesel fuel, LPG, and naphtha for local and export markets. The expanded plant is due on stream in spring 1999.

India's Oil & Natural Gas Corp.
is planning a $30 million oil refinery in the state of Andhra Pradesh, at Tatipaka near Rajahmundry. The refinery will have capacity of 1,500 b/d.

Hindustan Petroleum Corp. Ltd.'s
fire-ravaged 90,000 b/d Visakhapatnam, India, refinery resumed operations Jan. 15 (OGJ, Oct. 6, 1997, p. 40). The refinery was cleared by India's oil industry safety directorate following 4 months of repairs, estimated to have cost $25.6 million.

Petrochemicals

ARCO Chemie Nederland Ltd. let contract to the PO-11 construction partnership of ABB Lummus Global and JGC Corp. to build a petrochemical plant at Maasvlakte, Netherlands. The partnership is responsible for engineering, procurement, and construction of ethylbenzene and propylene oxide/styrene monomer units, with offsites and utilities. Construction will begin in the second quarter, and completion is slated for late in 2000. The plant will have capacity of 625 million lb/year of propylene oxide and 1.4 billion lb/year of styrene monomer.

European Union
approved a planned merger of the European polyethylene businesses of BASF AG and Shell International Chemicals Ltd. The new venture will be called Elenac and is expected to begin operating Mar. 1 at Kehl, Germany. Elenac will be one of Europe's leading suppliers of polyethylene, with manufacturing plants at Wesseling and Ludwigshafen, Germany; Fos, Berre, and Notre Dame de Gravenchon, France; and at Carrington, U.K.

Exploration

Occidental of Albania Ltd., a subsidiary of Occidental Petroleum Corp., signed production-sharing contracts with Albania's National Petroleum Agency for three blocks covering more than 1.1 million acres. Interests are operator Oxy 50% and partners Anschutz Albania Corp. 30% and IPC Albania Ltd. 20%. Blocks A-2 and A-3 are in the eastern portion of an onshore fold and thrust belt where more than 500 million bbl of oil and 1 tcf of gas have been discovered. Oxy will conduct a 650-km seismic program, perform geologic field studies, and drill two exploratory wells to fulfill a 3-year exploration requirement.

Mantaur Petroleum Corp.,
Calgary, signed production-sharing contracts for the Ergel Block XII and Bayantumen Block XVII with the Petroleum Authority of Mongolia. The contracts were ratified by the government of Mongolia prior to yearend 1997. Block XVII includes 3 million acres in the northern section of the Tamtsag sedimentary basin in northeastern Mongolia. Block XII comprises 2.9 million acres in the East Gobi basin of southeastern Mongolia, directly south of the Zuunbayan and Tsagaan Els oil fields.

Phillips China Inc.
and Union Texas Bohai Ltd. made a second oil discovery in the Bozhong block of China's Bohai Bay, 35 miles southwest of a November discovery (OGJ, Nov. 17, 1997, p. 30). The Bozhong 36-2-1 well was drilled to 8,491 ft TD in 69 ft of water. Operator Phillips 60% and Union Texas 40% said drill stem tests over a 653-ft interval, within a gross hydrocarbon column of 1,909 ft, flowed oil at a maximum rate of 2,262 b/d of 20.5° gravity oil, limited by testing facilities.

Power

India's Maharashtra State Electricity Board (MSEB) will purchase up to a 30% equity share in a 2,184-MW power plant under construction by Enron Corp. at Dabhol, India. MSEB will be the principal buyer of the 740 MW generated during the project's first phase, scheduled for completion in December. Enron holds an 80% interest in the project, with Bechtel Group Inc. and General Electric Capital Services each holding 10%. The Maharashtra government has received a $37.5 million loan from India's Power Finance Corp. to partially fund the equity purchase.

Pipelines

Pemex Gas & Petrochemical SA (PGP) signed a natural gas pipeline technical agreement with Energia Mayakan SRL de CV, a joint venture of TransCanada Pipelines Ltd., Mexico's Gutsa Construcciones, and Bechtel Corp. unit International Generating Co. (OGJ, Oct. 27, 1997, p. 42). The agreement allows Energia Mayakan to transport Pemex gas when the pipeline starts up in September 1999. TransCanada was awarded a 26-year contract to build, own, and operate the 700-km pipeline in 1997. Energia Mayakan will transport 270 MMcfd from Ciudad Pemex to the Yucatan Peninsula.

Canada's National Energy Board
received an application from Northstar Energy Corp., Calgary, for a 4.5-mile, $6.5 million, natural gas pipeline from British Columbia to Alberta. The line will connect Northstar's Coleman, Alta., gas plant with an Alberta Natural Gas Co. Ltd. main line west of the Alberta-British Columbia border.

Conoco Inc.'s
natural gas and gas products unit acquired and recommissioned a 160-mile, 10-in. former Dow Chemical Co. pipeline to transport crude oil, condensate, and natural gas liquids from Baton Rouge, La., to refineries at Beaumont, Tex., starting February 1998.

Government

U.S. Minerals Management Service (MMS) set Jan. 27 workshops in Denver to explain punitive fine assessments on companies for chronic erroneous reporting of royalty data and appeals under the 1996 Federal Oil and Gas Royalty Simplification and Fairness Act.

MMS
issued final rules setting terms under which it will grant royalty suspensions for new and existing leases on the U.S. Outer Continental Shelf. The rules implement provisions of the 1995 Deepwater Royalty Relief Act.

U.S. Department of Energy
let $750 million in contracts to install energy efficient and renewable energy technology systems at federal facilities in southeastern states. Six companies will finance the energy-related capital improvements and will be paid from a portion of savings generated from reduced energy consumption and lower energy bills. The companies are: CES/Way International, Houston; Duke Engineering & Services, Charlotte, N.C.; Energy Masters Corp., Overland Park, Kan.; ERI Services Inc., Bridgeport, Conn.; Honeywell Inc., Atlanta; and Johnson Controls Inc., San Diego.

Spills

The U.S. Justice Department said federal and state judges fined Eklof Marine Corp. $3.5 million for a January 1996 fuel oil spill off Matunuck, R.I. The $7 million in fines is in addition to Eklof's agreement to pay $1.5 million for land preservation in the area affected by the spill and to conduct a $1 million remedial safety program for its vessels and employees (OGJ, Jan. 29, 1996, p. 49).

Companies

Mapco Inc. and Williams Cos. Inc., both of Tulsa, will hold special shareholder meetings Feb. 25 to vote on proposals that would allow Mapco to become a wholly owned subsidiary of Williams (OGJ, Dec. 1, 1997, p. 48). The companies agreed to exchange a fixed ratio of 1.665 share of Williams common stock for each share of Mapco common stock, which would equate to $44.33/Mapco share based on Williams's closing price on Jan. 15. The deal is valued at $2.7 billion.

Union Texas Petroleum,
the Houston independent whose five employees were slain while traveling in Karachi late last year (OGJ, Nov. 17, 1997, Newsletter), will move its head office and 250 employees to Islamabad from Karachi by yearend, according to Pakistani government sources. A small operational office will remain in Karachi to support Union Texas's exploration efforts in the Badin district.

Shell Oil Co.
and Texaco Inc. started up their joint venture, Equilon Enterprises LLC, combining major elements of their western and midwestern U.S. refining and marketing businesses and their nationwide trading, transportation, and lubricants businesses (OGJ, Dec. 29, 1997, p. 24).

Enron Ventures Corp.
agreed to purchase a 15% minority interest in Catalytica Combustion Systems Inc. (CCSI) for $30 million in cash. Enron Ventures will receive a 3-year option to purchase another 5% of CCSI for $14.4 million cash. CCSI, a subsidiary of Catalytica Inc., Mountain View, Calif., developed the Xonon combustion system, which limits the formation of NOx and other emissions generated during combustion of fossil fuels in gas turbines.

Paramount Resources Ltd.,
Calgary, completed a $73 million (Canadian) acquisition of natural gas producing properties from Reserve Royalty Corp. The properties, in Alberta and Saskatchewan, produce 42 MMcfd of gas and include undeveloped acreage.

Lubes

Indian Oil Corp., India, will construct a lube blending plant at Asaoti in Haryana state, Faridabad district, to meet growing demand for lubricants in northern India. The plant will blend 24 grades of lubes and have an installed capacity of 60,000 metric tons/year. Operations are slated to begin in 2000

Drilling-production

Amoco Colombia Petroleum Co. and partners began natural gas deliveries from their Opon association contract area in the Middle Magdalena Valley, about 125 miles north of Bogota. Amoco said that, under the terms of the gas sales contract, Ecopetrol will purchase up to 100 MMcfd of gas and condensate from Opon and take delivery early this year at its El Centro gas processing plant. Operator Amoco 30%, state-owned Ecopetrol 50%, Hondo Magdalena Oil & Gas Ltd. 15.5%, and Opon Development Co. 4.5% also have an interim agreement to provide gas to the Termo Santander power plant, adjacent to the Opon contract area.

Elf Exploration Inc.
started development of its Virgo discovery on Viosca Knoll Block 823 in the Gulf of Mexico (OGJ, Sept. 1, 1997, p. 23). First production is expected by yearend 1999. An appraisal well, Viosca Knoll 823-3, confirmed the discovery and found a new reservoir containing 32 ft of hydrocarbon-bearing sands. Interests in the prospect are Elf 64%, Coastal Oil & Gas Corp 16.2%, Pogo Producing Co. 10.8%, and Nippon Oil Exploration USA Ltd. 9.0%. A conventional four-leg, 14-slot drilling-production platform will be set in 1,132 ft of water, with production capacity of 120 MMcfd of gas and 15,000 b/d of oil and condensate.

Alcoa's
Australian subsidiary signed a 15-year natural gas supply contract with partners in the North West Shelf production group, led by Woodside Petroleum Ltd. Under terms of the $3 billion (Australian) contract, Woodside and partners will supply at least 162 MMcfd to Alcoa aluminum refineries at Kwinana, Pinjarra, and Wagerup, Western Australia. Deliveries began this month.

Canada-Newfoundland Offshore Petroleum Board conditionally approved the Terra Nova oil field project off Newfoundland. Petro-Canada Ltd. and partners will make a final decision in the next few weeks on whether to proceed with the project. Terra Nova, with estimated reserves of 300-400 million bbl of crude oil in the Jeanne d'Arc basin on the Grand Banks, is scheduled to begin production by yearend 2000.

Marketing

U.S. Environmental Protection Agency modified a rule that requires testing of reformulated gasoline carried in tank trucks. Instead, trucks will meet EPA's compliance requirements if drivers receive training on how to prevent the commingling of RFG with lower-quality gasoline.

Gas distribution

Los Angeles-based Energy Pacific, a joint venture of Pacific Enterprises Inc. and San Diego-based Enova Corp., signed a partnership and operating agreement with Frontier Utilities of North Carolina. The JV, Frontier Energy, was formed to build a $55 million natural gas distribution system to serve industrial customers in a seven-county region in North Carolina. Construction begins in April with delivery slated for this summer. Pacific Enterprises' principal subsidiary is Southern California Gas Co.; Enova's is San Diego Gas & Electric.

LPG

British Petroleum Co. plc and local Chinese partners in the BP Ningbo Huadong LPG Co. Ltd. joint venture let a front-end engineering contract to Kvaerner AS, Oslo. The project involves design of a new LPG terminal at Ningbo, in Zhenijeng province, China, with capacity to import 1 million metric tons/year of propane and butane. The terminal will include two jetties to receive LPG carriers up to 50,000 dwt and facilities to offload cargoes into 5,000 dwt vessels for delivery along the coast and into road tankers for local delivery.

Copyright 1997 Oil & Gas Journal. All Rights Reserved.