Williams has launched plans to build a 261-mile pipeline to transport natural gas liquids (NGL) and olefins from its extraction plant in Fort McMurray, AB, to its processing facility in Redwater, AB. The Tulsa-based company now processes off-gas from Suncor Energy's oilsands facility in the Fort McMurray area, extracting the NGL and olefins for transport via the Suncor Oil Sands Pipe Line. The proposed 12-inch diameter pipeline, estimated to cost US$283 million, would provide additional capacity for Suncor liquids as well as NGL capacity for other area producers' off-gas. Pending Canadian regulatory approvals, construction is set to begin in 2010 with in-service estimated to be in April 2012. The pipeline initially would have a 43,000 b/d capacity for off-gas liquids, with the future capability to transport up to 125,000 b/d with additional pump station installation. In support of the new pipeline, Suncor is dedicating 106 MMcf/d of off-gas, equal to about 15,000 b/d of production, with the potential to add more processing volumes at the Fort McMurray and Redwater facilities through 2032.
Spectra Energy Partners LP's plan to acquire Ozark Gas Transmission LP and various assets from Atlas Pipeline Partners LP (APL) for $300 million cash, as well as Williams' proposal to form a midstream joint venture (JV) with APL, have cleared federal antitrust authorities. Both transactions were granted early termination of approval process under the Hart-Scott-Rodino Act following reviews by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) Antitrust Division. The Spectra-APL transaction gives the Spectra Energy Corp. partnership all of the ownership interests in NOARK Pipeline System LLP (see NGI, April 13). The primary asset is Ozark Gas Transmission, a 565-mile regulated interstate natural gas pipeline system that extends from southeast Oklahoma through Arkansas into southeast Missouri. Williams got the go-ahead to move into the Marcellus Shale play through a newly formed JV with APL. Under the JV, Williams will contribute funds to help Atlas trim its debt in exchange for a 51% interest in the pipeline's existing Appalachian Basin gathering system, which includes 1,800 miles of intrastate gathering lines serving 6,900 wells (see NGI, April 6).
FERC issued a certificate to CenterPoint Energy Gas Transmission allowing it to further expand its Carthage-to-Perryville pipeline to accommodate the need for additional takeaway capacity from the Haynesville shale play in northwest Louisiana and East Texas. The Phase IV expansion proposes to increase capacity on the Carthage-to-Perryville line by approximately 274,000 Dth/d to a total of about 1.87 Bcf/d. The expanded capacity would be used to deliver additional Haynesville shale gas supplies from Carthage, TX, to pipelines at the Perryville Hub in northeast Louisiana. The first three expansions of the 172-mile Carthage-to-Perryville line, which went into operation in the spring of May 2007, were completed later in 2007 and 2008, raising the capacity of the line to 1.55 Bcf/d (see NGI, April 9, 2007). In the Phase IV project, CenterPoint proposes to install an additional 15,000 hp turbine-driven compressor unit at both the Westdale and Vernon compressor stations located in Red River and Jackson parishes, LA, respectively. The project is targeted to go into service in April 2010. CenterPoint said it has executed a precedent agreement with Chesapeake Energy Corp. for 230,000-274,000 Dth/d, or approximately 84% of the proposed design capacity of the project. The company said it is negotiating with several shippers for the remaining capacity.
A Texas lawmaker wants to charge a 25 cents/boe fee for the transfer of liquefied natural gas (LNG), crude oil and petroleum products to or from marine terminals in order to support a $20 million fund that would pay for measures to combat coastal erosion. However, it is in doubt whether the fee would be in compliance with the U.S. Constitution. Any surplus collections beyond the $20 million would be deposited to the state's general fund under HB 4667, sponsored by Rep. Tommy Merritt (R-Longview). "The fee shall be imposed only once on the same crude oil, petroleum product or liquefied natural gas," the bill says. "The fee shall be paid monthly by the last day of the month following the calendar month in which liability for the fee is incurred." HB 4668, also introduced by Merritt, would impose a 25 cent/Btu fee on natural gas imports and exports in order to fund coastal protection. According to the state's Legislative Budget Board, both measures could run afoul of the U.S. Constitution, which prohibits the imposition of state duties on imports/exports.
IntercontinentalExchange (ICE) has listed the Pine Prairie gas storage facility in Evangeline Parish, LA, as a gas market hub on the ICE over-the-counter (OTC) trading platform. Pine Prairie is owned by PAA Natural Gas Storage LLC (PNGS), which is indirectly owned 50% by Plains All American Pipeline LP and 50% by Vulcan Capital. "The listing of Pine Prairie Hub as a trading point by ICE is a meaningful step in the evolution of our Pine Prairie franchise," said PNGS President Dean Liollio. "ICE is a well respected market platform that offers customers price discovery and the ability to buy and sell natural gas at a variety of physical market hubs throughout North America.
The U.S. Coast Guard has requested the establishment of a permanent security zone in the Freeport, TX, Liquefied Natural Gas (LNG) Basin, located about 70 miles south of Houston, and moving security zones for certain vessels bound for the Port of Freeport. In a pair of notices published Thursday in the Federal Register, the Coast Guard proposes a prohibition on entry into the Freeport LNG Basin security zone except for vessels that have obtained permission from the captain of Port Houston-Galveston in order to protect the port, surrounding areas and vessels from "sabotage, subversive acts, accidents or other actions of a similar nature." The Coast Guard also proposes a prohibition on entry into or movement within moving security zones that would extend 1,000 yards ahead and behind and 500 yards on each side of certain vessels bound for the Port of Freeport once they enter U.S. territorial waters. Comments on the proposals must reach the Coast Guard by June 1. The Coast Guard recently issued letters of recommendation indicating that the waterways associated with Freeport LNG Phase II at Freeport, TX, and seven other LNG facilities located throughout the Gulf Coast "are suitable for the expected vessel traffic at those facilities" (see NGI, April 20). At that time a Coast Guard spokesman said they were confident that "good security and safety" could be provided for LNG tankers. Federal regulators gave Freeport LNG Development LP the green light to begin service at its LNG terminal last year (see NGI, July 7, 2008). The Freeport terminal is located near two large gas trading hubs (Katy and the Houston Ship Channel) and is adjacent to large industrial gas consumers.
A $25 million jump in pension expenses related to last year's securities market collapse and a slowdown in industrial activity in the Northern Indiana Public Service Co. (NIPSCO) service territory dragged NiSource Inc.'s 1Q2009 net operating earnings down 10.1% to $170.2 million (62 cents/share) compared with $189.4 million (69 cents/share) in 1Q2008. The twin hits from the sagging economy were both anticipated when the company previously announced 2009 guidance of $1.00-1.10/share. The increased pension expense cost the company approximately 6 cents/share and the effects of the NIPSCO territory slowdown are still being felt. Another NiSource business segment, NiSource Gas Transmission & Storage (NGT&S), recently said it would cut 370-380 positions across its 16-state operating territory during the course of 2009 (see NGI, March 2). NGT&S houses Columbia Gas Transmission LLC, Columbia Gulf Transmission Co. and Crossroads Pipeline and holds partnership interests in Central Kentucky Transmission Co., Hardy Storage Co. and Millennium Pipeline LLC. NiSource's gas distribution operations segment reported operating earnings of $237.3 million in 1Q2009, compared to $255.6 million in 1Q2008. Gas transmission and storage operations reported 1Q2009 operating earnings of $111.1 million , up from $104.4 million in 1Q2008. The increase was due in part from increases in firm capacity reservation fees that were a result of higher Columbia Gas Transmission revenue for storage services, new Appalachian supply interconnects and incremental revenue from transportation agreements on both Columbia Gulf Transmission and Columbia Gas Transmission.
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