Enterprise Products Partners LP has added two more El Paso Corp. properties to its portfolio with the purchase of its East Texas natural gas subsidiaries. Enterprise paid $74.5 million for the natural gas gathering system and natural gas cryogenic processing plant, and the acquisition is expected to be immediately accretive to cash flow in 2005. According to Enterprise, the East Texas plants, located in Polk County, TX, own an 80% equity interest in three gathering systems, which represent a combined 89 miles of two-inch to 12-inch pipeline system, and a 75% equity interest in the Indian Springs gas processing facility. The Indian Springs processing plant has capacity to process up to 120 MMcf/d. In addition, there is an idle 20 MMcf/d train available for restart to support an increase in gas volumes. The gas processed at the Indian Springs plant is sourced from the Polk County gas gathering systems, as well as the nearby Big Thicket gathering system. Big Thicket is a 240-mile pipeline system located in Tyler and Hardin counties that is owned and operated by Enterprise. Together, these gathering systems cover a significant portion of the prolific Woodbine, Wilcox and Yegua production areas in East Texas.
Houston-based independent Southwestern Energy Co., whose natural gas exploration and production focus is in Texas and the Midcontinent, said that total oil and natural gas reserves jumped 28% in 2004 to 645.5 Bcfe from 503.1 in 2003. Proved developed reserves accounted for 83% of the total. Southwestern said it added 197.2 Bcfe of proved reserves during 2004, net of revisions, replacing 365% of estimated 2004 production at an estimated finding cost of $1.43/Mcfe. The independent also produced a record 54.1 Bcfe during 2004, up 31% from 41.2 Bcfe in 2003. Natural gas comprised 92% of Southwestern's proved equivalent reserves at the end of 2004, and the company's reserve life index was 11.9 years. Excluding the effects of revisions, Southwestern's reserve replacement ratio and estimated finding costs in 2004 were 388% and $1.34 per Mcfe. At the end of 2004, Southwestern's three-year average reserve replacement ratio was 305%, and its estimated three-year average finding and development cost was $1.30/Mcfe.
Berlin, CT-based Yankee Gas broke ground Thursday on a new $108 million 1.2 Bcf LNG peak shaving facility at the company's Eagle Street work center in Waterbury, CT's south end. The plant, which recently received construction approval from the Connecticut Department of Utility Control, is expected to be in service for the 2007/2008 heating season. "Today's groundbreaking is an important milestone in our ability to meet the growing demand for natural gas and to ensure the security and flexibility of having another source of in-state gas supply," said COO Dennis Welch. "This is good news for our customers because the facility will help mitigate price volatility during the heating season when natural gas prices tend to be the highest." The project includes a 158-foot diameter storage tank that stands 150 feet high. It will hold 15 million gallons of LNG and will be constructed by Chicago Bridge and Iron. The project will include liquefaction and vaporization equipment, allowing the tank to be filled by truck or interstate pipeline. The LNG facility's vaporizers will be capable of sending out up to 600 MMcf/d of natural gas. Construction of the tank foundation is expected to begin in early March.
With a recent history as a lawyer and energy consultant before California regulators, Dian Grueneich, the newest member of the California Public Utilities Commission, recused herself from all energy matters during her first business meeting last Thursday. She is still in the process of determining on which specific cases she can cast votes. Steve Poizner, a second new member on the five-member panel, is still awaiting formal swearing into office by the governor. The CPUC was forced to move its energy items to the end of its agenda and deal with them with the three continuing commissioners, led by President Michael Peevey, who Gov. Arnold Schwarzenegger has left in place. In introducing his new colleague, Peevey emphasized that Grueneich and he shared a lot of common views and he hoped the tenor of future commission meetings would be different than the prior head-banging he faced from two dissident commissioners. "Because I am in the process of determining the extent to which my prior law and consulting practice will cause me to recuse myself from certain items on the commission agenda, out of an abundance of caution, at today's meeting, I will recuse myself from all energy items on the agenda," said Grueneich, adding that she is the first commissioner who had previously practiced before the regulatory commission prior to being appointed by the governor to the six-year post. Southern Union Co. CCE Holdings LLC
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