NGI The Weekly Gas Market Report

Briefs -- Alphabet Energy, ICE Futures, EnLink Midstream Partners; Railroad Commission of Texas, Sempra Energy/IEnova, Transco

Schlumberger Ltd. led a $23.5 million investor round for Hayward, CA-based Alphabet Energy to help the company expand production of its Power Generating Combustor (PGC) system, which helps to reduce natural gas flaring. Alphabet, whose investors also have included Encana Corp., said Schlumberger participated with GM VenturesOsceola Capital Management LLCTGPClaremont Creek Ventures and the California Clean Energy Angel Fund. Alphabet is commercializing a waste heat recovery technology initially developed at the Lawrence Berkeley National Laboratory. The PGC system is designed to eliminate the need for diesel- and natural gas-powered generators and electrical grid connections at well pads to reduce fuel, rental and maintenance costs, and to eliminate emissions. Alphabet also has opened a Houston office to keep pace with energy industry demand for remote power generation solutions.

Beginning on trade date Aug. 22, ICE Futures U.S. said it will list several new financial natural gas and power futures contracts for trading, subject to completing necessary regulatory processes. For natural gas, ICE will list Katy Basis Future, Katy Index Future, Katy Swing Future, Tennessee 800L Index Future and Tennessee 800L Swing Future. For power, ICE is adding CAISO Malin Day-Ahead Peak Daily Fixed Price Future.

A subsidiary of EnLink Midstream Partners LP is holding a binding open season through Aug. 10 to gauge interest in the proposed Greater Chickadee crude oil gathering system to be built in the Permian Basin of Texas. The system, to include more than 150 miles of high- and low-pressure pipelines, would have origin points in Upton and Midland counties and destination points at two terminals in Midland County. EnLink expects to spend $70-80 million for the project, which could be operational in 2017. Preliminary design is to include multiple central tank batteries and pump, truck injection and storage stations. Design capacity would be determined by shipper commitments. Details are available at enlink.com/crudeopenseason or by contacting Rick Van Eyk at (713) 739-3244 or rick.vaneyk@enlink.com.

The Railroad Commission of Texas (RRC) issued 656 original drilling permits in June compared to 851 in June 2015. The June total included 506 permits to drill new oil or gas wells, four to re-enter plugged well bores and 146 for recompletions of existing well bores. The breakdown was 226 oil, 29 gas, 356 oil or gas, 37 injection, two service and six other permits. In June RRC staff processed 700 oil, 165 gas, 31 injection and four other completions compared to 1,416 oil, 225 gas, 64 injection and five other completions in June 2015. Total well completions for 2016 year to date are 6,429, down from 11,542 recorded during the same period in 2015. According to Baker Hughes Inc., the Texas rig count as of July 8 was 201, representing about 46% of all active rigs in the United States (see Shale DailyJuly 8). Before the bust, Texas drilling activity accounted for about 50% of all rigs running in the United States.

Sempra Energy Mexico unit IEnova said it has restructured its deal to acquire the 50% stake in Gasoductos de Chihuahua that is held by Petroleos Mexicanos (Pemex). Last December, Mexico's Federal Economic Competition Commission objected to the deal (see Daily GPIDec. 22, 2015). IEnova said it has reached an agreement with Pemex to restructure the deal in order to satisfy the regulator. According to IEnova, the price to be paid for the pipeline stake would be a minimum of US$1.108 billion. The deal is expected to close during the third quarter, assuming that regulatory conditions are satisfied by Pemex and regulatory approvals obtained, IEnova said.

Transcontinental Gas Pipeline Co. LLC (Transco) has asked the Federal Energy Regulatory Commission (FERC) to act by Wednesday (July 13) on its certificate application for the Dalton Expansion Project in Georgia [CP15-117]. The project calls for constructing 112 miles of pipeline, ranging from 16 to 30 inches in diameter, from the existing Transco pipeline at Station 115 in Coweta County, GA, to new delivery points in Georgia's Bartow and Murray counties (see Shale DailyMarch 20, 2015). It also includes a new compressor facility in Carroll County, GA, as well as three new metering facilities and other related pipe and valve modifications to existing facilities. According to FERC, Transco also plans to modify existing facilities along its mainline in Virginia and North Carolina to accommodate bi-directional flow. The pipeline lateral is designed to connect the Transco mainline to an existing power plant in northern Georgia operated by Oglethorpe Power Co., and to provide natural gas to a local distribution company operated by Atlanta Gas Light Co.

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