Atmos Energy subsidiary Atmos Pipeline and Storage LLC plans to seek an exemption from regulatory oversight by the Federal Energy Regulatory Commission for a 20-inch diameter natural gas gathering system it plans to build in Eastern Kentucky. The proposed 50-mile Straight Creek Gathering System would be capable of moving up to 100,000 MMBtu/d with the ability to expand to 225,000 MMBtu/d. It is designed to relieve transportation constraints and allow gas to flow from shut-in wells. The $80 million system would originate in Floyd County, KY, and extend to an interconnect with the Tennessee Gas Pipeline in Carter County, KY. Atmos said the project is supported by independent oil and gas producers in the area, including Kinzer Drilling, which will have an ownership stake in the project. More than a dozen other producers have signed memoranda of understanding to commit gas volumes to the system and to agree to commercial terms. "We expect our Straight Creek project to help boost natural gas drilling and production in the Big Sandy region of Kentucky," said Mark H. Johnson, senior vice president, nonutility operations, of Atmos Energy. "The gathering system should help provide year-round dependability for gas producers and should indirectly benefit natural gas customers by helping bring more gas supplies to market as demand continues to grow." Johnson said production from 1,700 gas wells on the eastern side of the state has been shut in. Construction is expected to begin in the fall of 2006, with operations expected to begin by the summer of 2007.
Plains All American Pipeline LP said a subsidiary of PAA/Vulcan Gas Storage LLC closed on a $320 million credit facility that will provide funding to complete the construction of the 24 Bcf Pine Prairie Energy Center gas storage project located in Evangeline Parish, LA. The credit facility consists of a $100 million five-year revolver and a $220 million term loan that matures in December 2013. A group of 37 financial institutions participated in the credit facility. "The completion of this credit facility marks a significant milestone in the development of the Pine Prairie project and underscores the value of this strategically located natural gas storage facility," stated Plains Treasurer Al Swanson. "We were pleased with the investor interest expressed in this credit facility and are very appreciative of the support displayed by our capital providers." The Pine Prairie project is being developed as a high deliverability salt dome storage facility. It is expected to provide 24 Bcf of working gas storage capacity in three 8 Bcf underground caverns and is designed to accommodate future expansion if market conditions warrant. It is located 50 miles northwest of the Henry Hub and will have direct interconnects to seve major interstate pipelines. The project is expected to begin receiving and storing gas in the second quarter of 2007, with 4.5 Bcf of working capacity. The remaining 19.5 Bcf of working capacity is expected to be placed into service in stages throughout 2008 and 2009. Significant progress has been made on the construction of the facility, and the first cavern well spud on May 11. In addition, 98% of projected available capacity in 2007 and 78% of the projected capacity in 2008 are under contract.
Enron Corp. said it will receive $90 million in a "mega claims" litigation settlement agreement reached Tuesday with Credit Suisse Securities (USA) LLC, formerly Credit Suisse First Boston LLC, in the Enron bankruptcy case. The settlement also provides that $337 million in claims against the Enron estate held by CSFB will be subordinated and receive no distribution from the Enron estate, and $92 million in CSFB claims will be allowed. The agreement finds that that CSFB was involved in fewer transactions with Enron than certain of the other mega claim defendants. CSFB did not admit liability or wrongdoing, and both parties agreed to settle the litigation to avoid the costs and uncertainties of further proceedings. The mega claims complains allege that the banks, including CSFB, Citigroup, Deutsche Bank and others, aided and abetted breaches of fiduciary duties and fraud, and engaged in civil conspiracy. The litigation also includes other bankruptcy-based claims. Remaining mega claim defendants include Citigroup Inc., Deutsche Bank AG, Barclays PLC, Fleet National Bank and Merrill Lynch & Co. Enron previously reached mega claims settlements with J.P. Morgan, Toronto Dominion Bank, Canadian Imperial Bank, Royal Bank of Canada and others. The settlement remains subject to the execution of definitive agreements and the approval of the United States Bankruptcy Court for the Southern District of New York.
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