BP announced last week that it signed a memorandum of understanding with Brass LNG in Nigeria to purchase two million metric tons a year of liquefied natural gas (LNG). The deal, which is expected to be concluded later this year, will cover a 20-year period starting in 2010. The LNG will be delivered by Brass and used by BP to supply markets in the Atlantic basin, particularly the United States and United Kingdom. Under the flexible contract, LNG also may be delivered to other existing LNG markets and a number of proposed new terminals that BP and its partners are seeking to develop in New Jersey, Texas, elsewhere in the U.S. and in Italy. The new LNG supply will compliment BP's equity LNG from Trinidad, Australia, Indonesia and Abu Dhabi, which will make up the majority of its portfolio, together with LNG from Egypt and third-party purchase agreements with Oman and Qatar.
Young Oil Corp. said it tested a Kentucky gas well with an open flow rate of 10 MMcf/d, which is significant for the Appalachian Basin. The gas well was drilled in Knox County, KY, about four miles northeast of Corbin. Young said the well flowed when drilling topped the Big Lime formation at a depth of 1,235 feet. "We expect to complete this new well and have it in production by mid March. We believe the well will settle to about 750 Mcf/d of gas," said CEO Anthony Young. The well was drilled by DrillPro. Young Oil owns 100% of the working interest. "We have a large lease position surrounding this well with DrillPro and fully intend to drill several more wells in this field," said Young. In addition to developing this new Kentucky gas field, Young is developing a 3,700-acre natural gas lease in Fentress County, TN. Young Oil is a privately owned oil and gas exploration and production company.
Citing a strong contribution from its utility operations, Avista Corp. reported increased fourth quarter and full-year earnings for 2005 -- $25.4 million, or 52 cents/diluted share, for the fourth quarter, compared to $22.6 million, or 46 cents/diluted share, for the same period in 2004, and $45.2 million, or 92 cents/diluted share, for the full year, compared with $35.2 million, or 72 cents/diluted share, in 2004. Avista CEO Gary Ely characterized the utility operations in three states (Washington, Oregon and Idaho) as "strong." The results were down on a quarter-over-quarter basis ($16.8 million net income in the fourth quarter last year, compared with $19.8 million for the same period in 2004), but up year-to-year with $52.5 million for the full year in 2005, compared to $32.5 million the full previous year). Increased operating costs, aside from higher fuel costs, cut into fourth quarter earnings, according to an Avista spokesperson.
FERC approved Trunkline LNG Co. LLC's request to increase the peak-day vaporization capacity of its Phase I expansion to 1.5 Bcf/d from 1.3 Bcf/d. The increased vaporization will assist Trunkline LNG's customer, BG LNG, in scheduling its liquefied natural gas (LNG) deliveries that are currently planned to arrive in the first and second quarters of this year, the FERC order said [CP02-60-007]. The proposed expansion of peak-day vaporization will not increase the number of LNG deliveries contemplated by the expansion project, or impact the construction or services that were previously authorized and currently are under way, it noted. Trunkline LNG's Phase I expansion of its terminal near Lake Charles, LA, would more than double the sendout of capacity of the facility and expand terminal storage capacity to 9 Bcf from 6.3 Bcf. FERC approved the Phase I project in 2003. FERC in December gave Trunkline LNG a three-month extension of the deadline to complete and place in service the Phase I expansion of the Lake Charles LNG terminal. It has until March 31 to finish the project.
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