NGI The Weekly Gas Market Report

Briefs -- Hermosillo Gas Pipeline, Trellis Energy, Louisiana Oil & Gas Association, Atlantic Sunrise

Mexico's Comision Federal de Electricidad (CFE) awarded a 21-year contract to construct and operate the 30-mile, 16-inch diameter Hermosillo Gas Pipeline Branch to CFE Northeast Natural Gas, a unit of US Source Gas. The pipeline, expected to be online in November 2017, would carry gas from the Sasabe-Guaymas pipeline to the Herosillo gas-fired combined-cycle power plant in the state of Sonora. CFE Northeast bid US$12.95 million, beating the only other eligible competing bidder, Aguaprieta Gas Pipeline, a subsidiary of IEnova, Sempra Energy's Mexican business unit. Aguaprieta bid about $15.76 million. CFE had budgeted more than $50 million for the project. The 100 MMcf/d of transport capacity would be reserved for CFE.

San Francisco-based Trellis Energy, newly spun from Blackstone Technology Group, has launched a natural gas transaction platform to manage and automate critical processes used to produce, gather and deliver gas from pipelines to storage and end users behind citygate. Trellis also has absorbed Blackstone's digital services practice to provide data analytics. The Trellis platform would manage "business processes throughout the natural gas supply chain, in a single-platform," CEO Rakesh Agrawal said. Using a software-as-a-service model, Trellis would allow energy companies "the flexibility to choose either an on-premise or a hosted solution, based on their size, need and budget." The company also has offices in Houston, Denver and Washington, DC.

"Given the ongoing distress in the oil and gas industry..." Lampert Capital Markets and the Louisiana Oil & Gas Association (LOGA) have made an alliance to provide "corporate financial solutions" for the industry. "...[M]any of LOGA's members are facing daunting financial situations," the trade association said Wednesday. "The current environment will require LOGA members to effectively address weakened balance sheets, resolve reduced cash flows, and achieve stabilization and growth through consolidation and acquisitions. Through this partnership with LOGA, Lampert Capital will aid oil and gas industry members in developing a strategy that will help industry participants achieve their financial and investment objectives."

The Pennsylvania Game Commission has agreed to license a 50-foot wide right-of-way in Lebanon County, PA, to Transcontinental Gas Pipeline Co. (Transco) for its Atlantic Sunrise project. In exchange, Transco will convey to the commission 117 acres near game lands in Monroe County, PA, and another 120 acres in Lackawanna County, PA. The company would still be required to pay the agency's habitat, surface and timber damages, as well as its standard annual license fee for as long as it remains active. The license authorizes 1,320 linear feet of 42-inch diameter natural gas pipeline within the right-of-way that would occupy 1.52 acres. Transco would also use and reclaim an additional 1.32 acres of game lands outside of the easement. The Atlantic Sunrise project would help move natural gas from Northeast Pennsylvania to markets in the Mid-Atlantic and Southeast by expanding the Transco system to add 1.7 million Dth/d of capacity

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