INDUSTRY BRIEFS

EXPORTS-IMPORTS

FORMER SOVIET REPUBLIC Kazakhstan agreed with Havana officials to barter a large shipment of crude oil for 200,000 metric tons of raw Cuban sugar, Pravda reported. Kazakhstan is experiencing a widespread sugar shortage but apparently does not have enough surplus crude to offset the large cut planned in Russian oil deliveries to Cuba this year.

BC GAS INC., Vancouver, B.C., received approval to purchase 29 MMcfd of long term gas supplies from U.S. producers in Colorado, Wyoming, Utah, and New Mexico, marking the first long term commitments by a Canadian utility to buy U.S. natural gas for core market supply since Canada deregulated its market. Suppliers are Conoco Inc., Phillips Petroleum Co., Unocal Corp., Barrett Resources Corp., Denver, and Grand Valley Gas Co. , Salt Lake City.

OILSANDS

AMOCO CANADA LTD. agreed in principle to buy the Wolf Lake oilsands plant and related assets in Northeast Alberta from BP Canada Inc. and Petro-Canada. Details of the transaction, to include an asset trade as well as cash, were not disclosed. BP will take an undetermined writedown on the $110 million (Canadian) book value of its 50% interest in the plant. Petro-Canada earlier took a writedown on its 50% interest.

REFINING

DIAMOND SHAMROCK INC., San Antonio, plans to install a 15,000 b/d delayed coker at its 115,000 b/d McKee refinery in the Texas Panhandle. The coker will upgrade heavy residual fuel oil and asphalt feedstocks for other refinery units, increasing the plant's capacity to process sour and heavier crude oils. Construction of the coker is to begin early in 1993 with completion in first quarter 1994.

MARAVEN SA plans to let contract to Overseas Bechtel Inc. for most engineering, procurement, and construction of upgrades at Venezuela's Cardon refinery. Bechtel will do most front end engineering and split detailed engineering with Jantesa SA, Caracas, of a gas oil hydrodesulfurization unit, distillate hydrotreater, sour gas amine treater, sour water stripper, and hydrogen and sulfur recovery units. Completion is scheduled in 1994.

CHEVRON CHEMICAL CO. plans to construct a $250 million benzene recovery unit at parent Chevron Corp.'s Pascagoula, Miss., refinery (OGJ, Jan. 20, p. 30). The project is to take about 20 months. Chevron said it will be the first unit in the U.S. to use its patented Aromax process. The company will evaluate installation of Aromax units worldwide at refineries where it is a partner.

ALASKA proposes to sell royalty oil from the Kuparuk River Unit to Petro Star Valdez Refinery Joint Venture, which plans a $30 million, 30,000 b/d refinery on private land in Valdez. Alaska would supply all of the refinery's feedstock for 10 years. The oil price would be the weighted average paid the state by ARCO Alaska Inc. and BP Exploration (Alaska) Inc., owners of about 95% of Kuparuk River field. Construction could begin this spring, and the refinery could start up by winter 1993.

AGIP PETROLI SPA agreed with Singapore Petroleum Co. (SPC) to form a 50-50 venture to build a $12.5 million. 15,000 metric ton/year lubricant blending plant in Singapore. Agip is to provide technical services for the plant, which is to be on stream by 1993. SPC said the plant will be capable of blending a wide range of lubricants for domestic and export markets.

COMPANIES

LASMO PLC is scaling down Ultramar's exploration in the U.S. by cutting its 1992 budget by $17 million and eliminating 34 jobs in Houston. Lasmo will make severance payments of 8.157 million ($14.85 million) to seven directors of Ultramar plc, taken over at yearend 1991 (OGJ, Dec. 23, 1991, Newsletter).

BJ SERVICES CO., Houston, closed seven operating locations and two administrative offices in Canada, ending operations there. Within 90 days, the company will redeploy Canadian assets to markets outside North America. About 100 employees in Canada will lose their jobs. Leaving Canada will result in a pretax charge of about $3.7 million to earnings, which BJ will recoup in less than 1 year by eliminating operating losses of about $2.6 million/year.

DRILLING-PRODUCTION

A STRIKE COMMITTEE and oil workers in Russia's Komi region reached an agreement Feb. 18 settling a strike that began Feb. 15 when oil workers shut in 96 wells that produce more than 25,000 b/d, about 10% of the production covered by the Komineft Oil Association. Tass news agency reported the workers produced a seven point list of demands, including free market prices for oil and gas, tax relief for enterprises operating in the region, and adequate supplies of consumer goods. An accord will be considered before Mar. 1 5.

INDIA'S Oil and Natural Gas Commission (ONGC) let a $500 million turnkey contract for further development of Neelam field in India's Bombay High offshore area to Hyundai Heavy Industries of South Korea. The contract calls for an increase in capacity to 130,000 b/d of oil and 92 MMcfd of gas from the current 10,000 b/d by early 1994. Project cost is estimated at $1.2 billion. ONGC's plans require 12 wellhead platforms for 100 wells and a separate central processing and water injection complex.

ALCORN INTERNATIONAL INC., Houston, deepened its A-1 West Linapacan wildcat off Palawan Island, Philippines, to 7,030 ft to find the oil-water contact (OGJ, Jan. 27, p. 46). It drillstem tested an interval at 6,558-98 ft, increasing the tested oil column to 1,100 ft from 600 ft. The test recovered an undisclosed volume of 33.41 gravity oil and no water. Parent Vaalco Energy Inc., Houston, sold 5.4% of its interest in the field to project partners for $7.3 million to fund development. Production is to begin in May.

ELF PETROLEUM (ANGOLA) LTD. acquired a 10% interest in the Cabinda Association, covering a 2,100 sq mile exploration and production contract area off the Angola's Cabinda enclave, from state owned Sonangol. Contract Area A produced an average 263,000 b/d in 1991 from 13 fields. Discoveries have been made in Areas B and C, and production is to begin in late 1994. Chevron Corp. unit Cabinda Gulf Oil Co. Ltd. is operator of the contract area and holds 39.2% interest with Sonangol 41% and Agip Angola Ltd. 9.8%.

AMOCO GABON GOMBE MARIN CO. will release the Ocean Producer floating production, storage, and offloading unit from Gombe-Beta field off Gabon July 20. Amoco cited poorer than expected production rates and plans no further spending for development. Ocean Producer began work in December 1991 under a 3 year, day rate contract allowing Amoco to test the Gombe-Beta reservoir with less up front investment (OGJ, Oct. 14, 1991, p. 34).

OIL AND NATURAL GAS COMMISSION let a $27 million turnkey contract to Sonat Offshore Drilling Inc., Houston, to drill four wells in the Gulf of Cambay off India. ONGC has the option to drill four more wells with comparable terms. Sonat will use its Offshore Jupiter jack up for the wells and expects to begin work in May 1992.

PERTAMINA agreed to a 20 year extension beginning in September 1998 of a production sharing contract in Southeast Sumatra held by Maxus Energy Corp., Dallas. Maxus owns a 56% interest in Southeast Sumatra, Indonesia's leading offshore oil province, where 1991 production averaged 210,000 b/d.

HAMILTON BROS.' plan to develop oil and gas reserves on Block 110/13 in the U.K. Irish Sea (OGJ, Jan. 6, p. 36) have been delayed following a government decision to order an inquiry into the company's plans for an onshore terminal at Point of Ayr in North Wales. Gas from Hamilton and North Hamilton fields has been sold for power generation. The fields must be on stream by the start of 1995 at the latest.

COGENERATION

CAMDEN COGEN LP let a contract worth about $24 million to GE Power Generation to supply and install two turbine generators for a combined cycle cogeneration plant at Camden, N.J. The plant will provide electricity generated by a natural gas-diesel fueled gas turbine generator to Public Service Electric & Gas System and steam to Camden Paperboard Corp. Start-up is slated for mid-1993.

PIPELINES

KERN RIVER GAS TRANSMISSION CO. started up its $934 million, 900 mile, 700 MMcfd pipeline from Opal, Wyo., to California last week. The company, a joint venture of Tenneco Gas and Williams Cos., began offering interruptible service Feb. 15. Firm service is to begin Mar. 1 .

ALBERTA'S Energy Resources Conservation Board approved construction of a 51 mile heavy oil pipeline in southern Alberta by Bow River Pipe Lines Ltd. The $11 million line will have a capacity of 24,000 b/d expandable to 41,580 b/d. It will connect with a pipeline operated by Murphy Oil Ltd. for delivery to a border point near Coutts, Alta. Heavy oil upgrading capacity is being expanded at Conoco Inc.'s Billings, Mont., refinery.

WINTERSHALL AG plans a feasibility study for a proposed 200,000-300,000 b/d products pipeline from Wilhelmshaven to Saxony in eastern Germany.

ENRON GAS SERVICES CORP., Houston, introduced a menu of gas sales contracts giving customers long term supplies at predictable prices. EnFolio SM GasBank RM fixes the price of gas for as long as 10 years, EnFolio SM GasCap ties prices to a floating index below a ceiling price for as much as 5 years, EnFolio SM GasBlend dampens price volatility of spot market purchases, EnFolio SM Indexed bases the gas price on gas or other commodities, and EnFolio SM 30 assures firm 30 day delivery of gas volumes at a negotiated price.

EASTEX ENERGY INC., Houston, terminated an agreement in principle to acquire Service Pipeline Co. (Servco), Houston, saying the proposed acquisition was not in its best interests (OGJ, Dec. 9, 1991, p. 38). Effective Mar. 2, Eastex and Servco also will end an interim agreement under which Eastex agreed to manage and operate Servco.

ACQUISITIONS

VARCO INTERNATIONAL INC., Orange, Calif., plans to buy the Shaffer Inc. unit of Baroid Corp., Houston, for about $39 million. Shaffer is an international supplier of pressure control equipment with 1991 sales of $72 million. The deal is to close next month.

TANKERS

SAUDI ARABIA'S National Chemicals Shipping Co. will pay $226 million for three petrochemical tankers to be built by Norway's Kigalo, OPEC News Agency reported. Delivery is expected in 1993.

EXPLORATION

CONTINENTAL RESOURCES INC. (CRI), Enid, Okla., 1-19 CRI Heinrich wildcat in Major County, Okla. (OGJ, Dec. 16, 1991, p. 78), flowed 1,200 b/d of 39 gravity oil through a 2/64 in. choke with 460 psi flowing tubing pressure from Cambro-Ordovician Arbuckle at 9,095-9.104 ft near the base of an Arbuckle oil column of more than 100 ft. CRI holds a 96% working interest in the well and has permits for four offsets.

HOCOL SA 1 Montanuelo wildcat, 110 km southwest of Bogota on the 129,000 acre San Luis association contract area in Colombia's Upper Magdalena Valley, flowed 12.4 MMcfd of gas through a 1 in. choke with 1,200 psi flowing tubing pressure from an interval at 3,440-3,548 ft in the K-4 member of Cretaceous Guadalupe. An appraisal well is planned early this year. Hocol owns a 60% interest in the San Luis contract area, Triton Colombia 40%.

ENTERPRISE OIL PLC was awarded the Northwest Natuna 11 permit off Indonesia. The 5,675 sq km tract is about 125 miles northwest of Natuna Island.

PETROCHEMICALS

AMOCO CHEMICAL CO. is investigating an explosion at its Stratton Ridge salt dome storage site in rural Brazoria County, Tex., about 8 miles south of Angleton, that killed two workers employed by U.S. Contractors, Clute, Tex. The Feb. 14 blast destroyed two 1,500 bbl liquid storage tanks, but did not affect Amoco operations. Stratton Ridge stores petroleum liquids and gases in nine salt domes for Amoco's Chocolate Bayou. Tex., petrochemical plant.

NESTE OIL began producing methyl tertiary butyl ether at a $15 million, 1,160 b/d plant at Sines, Portugal, using feedstock from Neste Chemicals units in the area. Neste owns or holds interests in MTBE plants in Finland, Saudi Arabia, Canada, and Malaysia with combined gross production of about 32,800 b/d.

VAN OMMEREN CETECO, Rotterdam, Helm AG, Hamburg, and Odfjell Tankers, Bergen, are partners in a chemical imports tank terminal to be built at the port of Ningbo, China. Chinese partners are Zheyiang Chemicals & Light Industry, Hangzhou, and Ningbo Port Authority. The Van Ommeren Tank Terminal Ningbo Co. Ltd. venture is to start up by mid-1993 with initial storage capacity of 20.000 cu m. First phase investment is about $8 million.