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Phase I of Iroquois Gas Transmission System LP's 08/09 Expansion -- a 1.6-mile pipeline loop in Newtown, CT -- began flowing gas on Nov. 14. The three-phase 08/09 Expansion will allow Iroquois to receive an additional 200 MMcf/d at its interconnect with Algonquin Pipeline in Brookfield, CT, and deliver the volumes to National Grid's KeySpan system at South Commack in Long Island. Iroquois will act as a middleman between Algonquin and KeySpan. Algonquin has entered into a precedent agreement with KeySpan for 175,000 Dth/d of firm service effective Nov. 1 and an additional 25,000 Dth/d commencing Nov. 1, 2009. Because pressure in the Iroquois mainline prior to the expansion was substantially higher than the pressure in the Algonquin pipeline at Brookfield, Iroquois was able to only deliver gas into, but not receive gas from, the Algonquin system. The proposed expansion will allow Iroquois to receive gas from Algonquin. Phase II of the expansion, which entails installation of two 10,300 hp compressors in Milford, CT, is under way with a targeted in-service date of Jan. 1. The third phase, installation of a second 10,300 hp compressor at Iroquois' existing Brookfield Compressor Station in Brookfield, CT, is expected to begin by year's end.

The oil and gas industry generates more than $7.1 billion a year for Pennsylvania, according to an economic impact study performed by the Pennsylvania Economy League of Southwestern Pennsylvania (PELSP). According to the study, requested by the Marcellus Shale Committee, an independent organization comprised of oil and gas companies engaged in developing natural gas resources of the Marcellus Shale, Pennsylvania's economy benefits from the direct employment, compensation and output of the industry as well as from the impacts of the industry's supply and distribution chain. For each of the 26,500 full and part time jobs the industry provides in the state, another 1.52 jobs are generated, according to the study. The number of new oil and gas wells drilled in Pennsylvania was 4,148 in 2007, more than triple the 2000 total of 1,354, an increase which the PELSP said translates into estimated spending of $1.2 billion on new drilling activity. The study found that approximately 2,000 companies operated a total of 79,000 active wells in Pennsylvania in 2007, with more than 200 companies each operating 100 wells or more.

The oil and gas industry generates more than $7.1 billion a year for Pennsylvania, according to an economic impact study performed by the Pennsylvania Economy League of Southwestern Pennsylvania (PELSP). According to the study -- requested by the Marcellus Shale Committee, an organization of oil and gas companies engaged in developing the Marcellus Shale -- Pennsylvania's economy benefits from the direct employment, compensation and output of the industry as well as from the impacts of the industry's supply and distribution chain. For each of the 26,500 full- and part-time jobs the industry provides, another 1.52 jobs are generated, according to the study. The number of new oil and gas wells drilled in Pennsylvania was 4,148 in 2007, more than triple the 2000 total of 1,354, an increase the PELSP said translates into estimated spending of $1.2 billion on new drilling activity. The study found that approximately 2,000 companies operated a 79,000 active wells in Pennsylvania in 2007, with more than 200 companies each operating 100 wells or more.

The Federal Energy Regulatory Commission (FERC) last Thursday terminated an inquiry into the fuel retention practices of interstate natural gas pipelines, saying there was no basis for the agency to proceed with generic action. The order concluded that shippers' requests to impose a tracker mechanism with a true-up on every pipeline would be difficult to justify under the requirements of Section 5 of the Natural Gas Act (NGA). The notice of inquiry, which was issued in September 2007, sought comments on whether FERC should change the policy governing fuel retained in-kind from transportation and storage shippers [RM07-20]. While shippers argued in favor of a tracker mechanism with a true-up, gas pipelines said there was no need to change Commission policy, which allows pipes to either charge a fixed cost or use a tracker mechanism to recover fuel costs. "We find there is no basis for a generic proceeding with respect to fuel retention," said Chairman Joseph Kelliher. "Trying to put a round peg in a square hole was not the best way to achieve the objective of fairness to the shippers and energy efficiency," agreed Commissioner Marc Spitzer. The Commission generally supported examination of fuel retention practices on a case-by-case basis. The FERC order pointed out that Section 5 complaints filed by shippers have been responsible for significantly reducing fuel charges on some pipelines. It advised shippers that suspect particular pipelines of overrecovering fuel charges to file complaints. Kelliher conceded that the Section 5 remedy for shippers was "arguably inadequate," but he said there was little FERC could do absent a congressional change to that portion of the NGA. "I would support a statutory change to reform Section 5," said Commissioner Jon Wellinghoff.

El Paso's Colorado Interstate Gas Co. (CIG) last week got the green light from FERC to place in service an expansion of its system to serve growing natural gas demand along the Colorado Front Range, particularly in the Denver metropolitan area. The expansion is tentatively scheduled to go into service at the end of the month, an El Paso spokesman said. The High Plains project includes 164 miles of 24-inch and 30-inch diameter pipeline, in four separate segments, and associated above-ground facilities in Weld, Adams and Morgan counties in Colorado (see NGI, March 24). The expansion increases deliveries by up to 900 MMcf/d to meet growing demand of residential, commercial and industrial customers, as well as gas-fired power generation facilities. The $216 million project was built by a joint venture of CIG and Xcel Energy called WYCO Development LLC. The expansion facilities connect with Public Service of Colorado (PSCo), which has subscribed for most of the capacity. Other connections are with CIG affiliate Wyoming Interstate Co. Ltd., Rockies Express Pipeline (REX) and Young Gas Storage. To avoid unnecessary costs and environmental/landowner impacts, CIG refunctionalized a portion of its Crazy Horse Lateral, which is near the Cheyenne Hub in Weld County, to allow the High Plains pipe facilities to directly connect with the REX pipeline without having to construct extensive interconnecting facilities, CIG said. In addition, the project called for CIG to refunctionalize its small Blue Spruce Lateral near Watkins Compressor Station in Adams County to achieve the same result. CIG said it has entered into a precedent agreement with PSCo to provide a maximum daily quantity (MDQ) of 874,000 Dth/d of capacity on the expansion facilities for an initial contract term of approximately 21.5 years. It also executed a precedent agreement with Coral Energy for an MDQ of 25,000 Dth/d of firm transportation service.

At the dedication of its new auto plant in Greensburg, IN, Honda Motor Co. Ltd. said it will transfer exclusive production of the world's only compressed natural gas powered passenger vehicle, the Civic GX, from a Honda plant in Ohio to Honda Manufacturing of Indiana LLC in 2009. Honda announced plans to build the Greensburg facility in June 2006 and broke ground in March 2007. The plant is a comprehensive production facility that includes metal stamping, plastic injection molding, subassembly and final assembly and other processes that will employ 2,000 workers at full capacity. It sits on a 1,700-acre parcel facing Interstate 74 in Greensburg. The Civic GX -- which was unveiled in 1998 -- runs at a gasoline-equivalent of nearly 32 mpg. The Environmental Protection Agency (EPA) has recognized the Civic GX as the cleanest internal-combustion vehicle on Earth. Currently, the Civic GX is only sold in California and New York. Honda recently has been touting "Phill," a home refueling appliance available to owners of natural gas vehicles. General Motors Corp. recently called natural gas an "enticing alternative" to petroleum (see NGI, Aug. 11). Toyota Motor Sales USA Inc. displayed a compressed natural gas Camry Hybrid concept vehicle at the Los Angeles Auto Show last Friday (see NGI, Sept 29). The proliferation of natural gas vehicles is a key part of billionaire T. Boone Pickens' energy reform plan aimed at reducing U.S. dependency on foreign crude oil, which costs the country $700 billion per year. Unveiled on July 8 (see NGI, Nov. 17; July 14), the Pickens Plan calls for a number of things to reduce U.S. foreign imports, including using the country's abundant supply of natural gas as a transportation fuel. Pickens -- the largest single investor in a natural gas supplier to heavy vehicle fleets of buses, trash trucks and airport shuttles called Clean Energy -- has said that natural gas is the best transportation fuel of all because it's 90% cleaner than gasoline.

Southern California Gas Co. (SoCalGas) has begun its storage open season for its 2009 capacity. The company is offering more than 30 Bcf of multi-cycle working capacity for up to three years, beginning April 1. Capacity releases will be made thorough bilateral negotiations, and buyers have the flexibility to specify the cycling capability. SoCalGas officials said the implementation of firm access rights on Oct. 1 moved the location for storage receipts and deliveries from the California border to the SoCalGas Citygate (see Daily GPI, Oct. 3). Customers interested in acquiring storage services need to submit a written nonbinding bid, preferably via e-mail, specifying the desired levels of firm inventory, injection and withdrawal capacities and the annual demand charge the customer is willing to pay. The demand charge should be stated as a total annual dollar amount or a price per dekatherm of inventory capacity. More information about the storage capacity release is available on SoCalGas' website or by calling Gwoon Tom at (213) 244-3692.

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