Rockies Express Pipeline (REX) Thursday revised its estimate for in-service of REX-East due to delays in completing its Illinois River horizontal directional drill (HDD), which has been complicated by adverse weather. Service to all REX-East interim service delivery points is expected to begin in late May. REX affirmed its previously projected in-service dates for Lebanon, OH, of June 15 and Clarington, OH, of Nov. 1. The Illinois River HDD has caused repeated delays of REX-East work (see NGI, April 27). Initial REX-East service is projected to commence in late May into Zone 3 at 1,600 MDth/d. This includes all interim service delivery points, which are NGPL (Moultrie County, IL), Trunkline (Douglas County, IL), Midwestern (Edgar County, IL) and PEPL (Putnam County, IN). In addition, the Ameren (Moultrie County, IL) delivery point is expected to commence service contemporaneous with interim service. Service to Lebanon is projected to commence June 15 with an initial capacity of 1,600 MDth/d to the Lebanon delivery points. Capacity will later increase to 1,800 MDth/d. In-service of the fully powered REX-East to Clarington is projected to be Nov. 1, capacity following necessary operational approvals will be 1,800 MDth/d. For more information visit www.rexpipeline.com, "Rockies Express -- East," "REX-East -- Informational Posting."
Excelerate Energy LLC's Energy Bridge regasification vessel Explorer completed the discharge of its cargo through the company's Northeast Gateway Deepwater Port, approximately 13 miles offshore Boston, Excelerate said. "The completion of this discharge took longer than anyone had expected due to unforeseen issues with the pipeline, but I am pleased with the level of cooperation by everyone to identify and solve the problem," said Excelerate CEO Rob Bryngelson. Technology onboard the Explorer allows liquefied natural gas to be revaporized onboard the ship and fed directly into natural gas pipelines in a manner that minimizes environmental impacts and facility costs. Last month the effort to remove a hydrate blockage was completed, allowing Explorer to reconnect to the buoy and complete the delivery (see NGI, April 27). The completion of this full cargo discharge resulted in the drying of the pipeline and removal of all residual moisture, thereby preventing the formation of hydrates in the pipeline during any subsequent deliveries, Excelerate said.
BP plc has ramped up production from the Dorado and King South projects in the deepwater Gulf of Mexico (GOM) as subsea tiebacks to its existing Marlin Tension Leg Platform (TLP) infrastructure, which is located about 125 miles southeast of New Orleans. Dorado, which uses dual completion technology to produce oil and gas from five Miocene zones in the GOM, added three new subsea wells to the Marlin TLP. King South, which is producing through an existing subsea pump, added a single well to the platform. With the addition of the four new wells, the Marlin TLP now is serving a total of 11 wells, which together have daily gross production of about 70 MMcf/d of gas and 60,000 b/d of oil. The TLP was designed to process up to 235 MMcf/d of gas; oil output is now at peak capacity. Dorado is operated by BP with a 75% working stake; Shell Oil Co. holds a 25% stake in the project. King South, which is 100% owned and operated by BP, is located about 18 miles from the TLP.
The Federal Energy Regulatory Commission approved Transcontinental Gas Pipe Line's (Transco) proposal to add incremental southbound transportation capacity on its Mobile Bay Lateral, creating bidirectional flow capability to serve the growing Florida and Alabama natural gas markets. The proposed expansion would add 253,500 Dth/d of incremental southbound capacity to the 123-mile, 30-inch diameter Mobile Bay Lateral, bringing total capacity to approximately 1.35 Bcf/d. [CP08-476]. The lateral accesses gas produced in Mobile Bay and offshore Alabama. The proposed facilities would enable Transco to provide firm transportation service from Compressor Station 85 and interconnects with third-party pipelines at Station 85 southward to delivery points located on the Mobile Bay Lateral, including a delivery point to Gulfstream Natural Gas System, while preserving Transco's ability to provide northbound firm transportation service, the pipeline said. The Commission order gave Transco one year to place the proposed facilities in service. Transco said it has executed binding precedent agreements for all of the expansion capacity with Florida Power Corp. and Southern Company Services Inc., acting as agent for several of its affiliates.
TransCanada Corp. has won the contract to build, own and operate a US$320 million pipeline in Mexico that would deliver regasified liquefied natural gas (LNG) from a terminal now under construction, the Calgary-based company said. The proposed Guadalajara Pipeline would follow a 310-kilometer (193-mile) route from an LNG terminal under construction near Manzanillo on Mexico's Pacific Coast to Guadalajara, the second largest city in Mexico. The 30-inch diameter pipeline would be capable of transporting 500 MMcf/d. The majority of the capital expenditures are expected to be made in 2010 with a targeted in-service date of March 2011. The project is supported by a 25-year contract for its entire capacity with Comision Federal de Electricidad (CFE), Mexico's state-owned electric company. The Guadalajara Pipeline would serve power generation load in Manzanillo and Guadalajara as well as connect to an existing Petroleos Mexicanos (Pemex) pipeline near Guadalajara. The source of natural gas will be the LNG terminal near Manzanillo, primarily supplied by Peruvian LNG. Last year a Korean-Japanese consortium of three companies won the contract to build and operate the 1 Bcf/d terminal (see NGI, March 17, 2008). Construction began last July.
Energy Transfer Partners LP (ETP) said it has two more binding contracts to transport natural gas via its proposed Tiger Pipeline system. The 180-mile pipeline, to be constructed by ETP and a subsidiary of Chesapeake Energy Corp., would carry gas from Carthage, TX, through the heart of the Haynesville Shale and terminate near Delhi, LA (see NGI, Feb. 2). ETP entered into binding 10-year contracts with Denver-based EnCana Marketing (USA) Inc., a subsidiary of EnCana Corp., and an undisclosed shipper. ETP did not disclose how much capacity EnCana would take, but EnCana in April said it had committed to 500 MMcf/d on Tiger (see NGI, April 27). The two new commitments are in addition to ETP's 15-year contract with Chesapeake Energy Marketing Inc. for 1 Bcf/d, which would bring total capacity commitments on the pipeline to at least 1.5 Bcf/d. The partnership said it is continuing to negotiate with other shippers for capacity on the line.
MarkWest Energy Partners and ArcLight Capital Partners formed a joint venture for the construction and operation of the Arkoma Connector, a 50-mile interstate gas pipeline that would allow producers in the Woodford Shale area of Oklahoma to interconnect with the Midcontinent Express and Gulf Crossing pipeline systems for delivery of their gas to eastern markets. Under terms of the joint venture, ArcLight will acquire a 50% equity interest in the pipeline for $62.5 million. MarkWest will operate the pipeline and ArcLight will pay a fee to MarkWest to manage the joint venture. Following operational commencement of the pipeline, the two partners will invest equally in ongoing costs associated with operating or expanding the pipeline. Standard & Poor's Ratings Services (S&P) said creation of the venture will not immediately affect MarkWest's ratings or outlook. Denver-based MarkWest said it expects the 24-inch diameter Arkoma Connector Pipeline to be completed this month. The pipeline will extend from the outlet of an affiliate's existing treating plant in northeast Oklahoma 50 miles in a southeasterly direction to near Bennington, OK, where it will interconnect with the Midcontinent Express and Gulf Crossing systems. The project also calls for the construction of approximately 19,500 hp of compression at two compressor stations and associated facilities in Coal, Atoka and Bryan counties in Oklahoma. FERC approved MarkWest's Arkoma Connector plans last November (see NGI, Nov. 17, 2008).
FERC approved TransCanada Alaska Co. LLC's request to use the agency's National Environmental Policy Act (NEPA) pre-filing review process for its Alaska pipeline project that would transport natural gas from the North Slope to the U.S.-Canadian border (see NGI, April 27). "Because an Alaska natural gas transportation project will likely require multiple field seasons to develop an application, use of the pre-filing process will ensure completion of the environment impact statement within the legislated time frame," wrote J. Mark Robinson, director of the Federal Energy Regulatory Commission's Office of Energy Projects, in a letter order to the company. TransCanada holds the state concession under the Alaska Gasline Inducement Act (AGIA) to construct a pipeline from the North Slope to carry gas to Lower 48 markets. Pursuing a competing project are BP and ConocoPhillips, which have proposed the Denali pipeline outside the AGIA framework. The Denali partners already have secured pre-filing status at FERC (see NGI, June 23, 2008). The future of both projects is in doubt due to the shifting nature of North American gas markets. Robust production from established and emerging gas shale plays has pushed prices down to levels that make a major North Slope pipeline uneconomic. Additionally, the North American market is poised to receive additional imports of liquefied natural gas (LNG) as the global market for LNG has weakened and supplies are ramping up.
East Cheyenne Gas Storage LLC asked the Federal Energy Regulatory Commission to approve its request to use of the agency's National Environmental Policy Act pre-filing process to vet its proposal to construct a depleted reservoir storage facility in northeastern Colorado. The proposal calls for East Cheyenne to develop a storage project on mineral leases held by Denver-based Merchant Energy Partners LLC, its parent company, in two depleted reservoirs known as West Peetz and Lewis Creek, approximately 23 miles north of Sterling, CO. The project would provide high-deliverability storage services to markets throughout the Midwest and in the West. Initially the West Peetz reservoir would offer 6.2 Bcf of working capacity, which would be expandable to 8.2 Bcf four years after the start of operations, the company said. The Lewis Creek reservoir initially would be capable of providing as much as 3.6 Bcf of working capacity, with the potential to grow to 5.6 Bcf after four years of operation. Total working capacity would be about 13.8 Bcf by the end of the fourth year of operation. The project also calls for the construction of twin 24-inch diameter pipelines that would connect a proposed compressor station to the Rockies Express and Trailblazer pipeline systems. East Cheyenne said it expects to file a certificate application in December. It asked the Commission to issue a certificate order by May 2010 so it could begin construction the following month.
Citing a Commerce Department decision in APril that was favorable to New York, the state renewed its request for the Federal Energy Regulatory Commission to withdraw or vacate its order approving Broadwater Energy LLC's proposal to site a controversial floating liquefied natural gas (LNG) terminal in Long Island Sound. The request came only days after TransCanada Corp., one of the project's sponsor, said the proposed 1 Bcf/d LNG terminal was on the "back-burner" for now. In April 2008 the New York State Department of State (NYSDOS) objected to the Broadwater terminal project on the grounds that it was inconsistent with the Long Island Sound Coastal Management Plan (see NGI, April 14, 2008). The agency subsequently asked the Commission to withdraw or vacate its order approving the terminal, but FERC refused the request, citing Broadwater's pending appeal of NYSDOS' objection. Broadwater appealed the state's objection to Commerce in June 2008 (see NGI, July 14, 2008). Last month Commerce upheld New York's objection to the Broadwater project, prompting the state to once again ask FERC to either withdraw or vacate its order. The Commerce Department ruled that the potential adverse coastal impacts of the $700 million LNG project would outweigh its national interest (see NGI, April 20).
Eyeing up to $1 billion in federal stimulus package funding, California claims to be the first state to submit its application for American Recovery and Reinvestment Act (ARRA) State Energy Program (SEP) funding. The California Energy Commission (CEC) successfully completed the state's SEP filing, which promises massive energy savings and more than 2,000 new jobs, according to Gov. Arnold Schwarzenegger. U.S. Department of Energy (DOE) approval is expected sometime between July and August, Schwarzenegger said. Responsible already for administering $226 million in authorized ARRA funding, the CEC in the meantime will move forward with various stakeholder groups to develop the program guidelines. Earlier this year Schwarzenegger created the California Recovery Task Force to track the ARRA funding coming into the state, along with working collaboratively with the Obama administration and state/local government, nonprofit and private-sector entities. "To date, California has been allocated more than $1 billion from the energy and climate change-related ARRA funding, including the Block Grant funding allocation, the SEP and the weatherization assistance program administered by the California state department for community services and development," said Schwarzenegger.
The American Petroleum Institute (API) said it supports House energy legislation that calls for federal revenues from expedited review of offshore oil and natural gas leases and sales to be used to fund clean energy and energy efficiency initiatives. The bipartisan bill, introduced by Reps. Tim Murphy (R-PA) and Neil Abercrombie (D-HI), "recognizes the importance of increased access to offshore oil and natural gas resources not only to our nation's economy -- in terms of generating federal, state and local revenues and new well paying jobs -- but also to America's energy security," said API President Jack Gerard. The bill calls for expedited review of leases and sales for offshore oil and gas exploration, and the dedication of the anticipated $2.2 trillion in federal revenues from these activities to finance clean energy and energy efficiency initiatives, including alternative fuels; the development of clean coal technology; the disposition and recycling/reprocessing of nuclear waste; and weatherization programs and conservation tax credits.
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