The public has a chance to comment on a relaunched natural gas project to be built in Uintah County, UT, according to the Bureau of Land Management (BLM) field office in Vernal, UT. Stewart Petroleum Corp.'s Tumbleweed II project is to be located on about 7,600 acres around 32 miles south of Ouray, UT. In a draft environmental analysis (EA) of the project, BLM evaluated up to nine deep, exploratory gas wells that would be drilled from seven well pads. About 12 miles of gas pipeline would be constructed, and four miles of roads would be upgraded or added. Total surface disturbance would be about 45 acres. BLM said the draft EA for Tumbleweed II analyzes four alternatives: proposed action alternative, no action alternative, buried pipeline alternative and additional directional drilling alternative. After the public comment period ends Oct. 16, the draft EA is to be finalized, and BLM said it would issue its decision.
EXCO Resources Inc. has sold close to $700 million of its natural gas-weighted properties in Oklahoma, Ohio and Pennsylvania. The Dallas-based producer agreed to sell to Sheridan Holding Co. I LLC all of its producing assets in Oklahoma for $540 million. EXCO also agreed to sell some properties in Ohio and Pennsylvania for a total of $145 million to EV Energy Partners LP and institutional partnerships managed by EnerVest Ltd. At the end of 2008 the properties to be sold to Sheridan had estimated proved reserves of 4.8 million boe, which included 223.7 Bcf of natural gas, EXCO said. Current net production includes 39.1 MMcf/d and 919 b/d of oil, or 44.6 MMcfe/d. The Ohio and Pennsylvania properties at year-end 2008 had estimated proved reserves of 121.9 Bcfe, or 110.4 Bcf of natural gas and 1.9 million bbl of oil. Current net production includes 12.8 MMcf/d and 258 b/d, or 14.4 MMcfe/d. The sales are expected to be completed in November. The Sheridan sale has an effective date of Oct. 1, 2009, and the EV Energy/EnerVest sale has an effective date of Sept. 1, 2009.
ConocoPhillips said the company's third quarter results would be crimped by weak North American natural gas prices. Oil and gas output worldwide is expected to fall 5% from the second quarter. "Total third quarter production on a barrel-of-oil equivalent (BOE) per day basis, including Syncrude and excluding LUKOIL, is anticipated to be approximately 1.78 million boe per day," the company said in an update. "Third quarter production was impacted by seasonal planned maintenance activities, mainly in the United Kingdom and Alaska. Exploration expenses are expected to be approximately $400 million before-tax for the quarter." In the second quarter the Houston-based producer's net earnings totaled $1.3 billion (87 cents/share), compared with $5.4 billion ($3.50) in 2Q2008. Revenues dropped to $35.4 billion from $71.4 billion. U.S. exploration results were impacted by realized gas prices that fell dramatically from a year ago, CFO Sig Cornelius said (see NGI, Aug. 3).
With another $680 million in hand, financing has been completed for the proposed 1 Bcf/d Manzanillo liquefied natural gas (LNG) receiving terminal to be built on the West Coast of Mexico in the state of Colima. A consortium of Mitsui & Co. Ltd. (37.5%), Samsung Engineering & Construction (37.5%) and Korea Gas Corp. (25%) last year secured the 20-year contract for the $875 million project with the Mexican government's electricity commission (see NGI, March 17, 2008). The project is scheduled to be completed by the end of 2011, according to the consortium of banks involved in the latest financing deal.
The Federal Energy Regulatory Commission (FERC) approved Wyoming Interstate Co. Ltd.'s (WIC) request to begin service on Phase II compression expansion facilities of its Piceance Lateral in northwestern Colorado. The Phase II facilities include a new compressor unit at WIC's existing Greasewood Compressor Station in Rio Blanco County, CO, and the new Snake River Compressor Station in Moffat County, CO. Phase I -- an uprate of an existing compressor at the Greasewood Compressor Station -- does not involve any construction or significant material modifications and could be available for service within 14 days after WIC receives authorization from FERC, the El Paso pipeline told FERC in its application. When in full service the project, both phases one and two, would increase the summer design day capacity of the lateral to 552.8 MMcf/d from 333.3 MMcf/d. This would equate to a year-round capacity of 580 MMcf/d, WIC said. FERC approved the expansion of the lateral in late 2008 (see NGI, Dec. 8, 2008).
Williams' 450 MMcf/d Willow Creek gas processing plant in western Colorado's Piceance Basin has reached full processing operations about seven weeks after the plant began running, the company said. The facility consists of a single-train amine treating and cryogenic plant in Rio Blanco County, CO, approximately 25 miles northwest of Williams' facilities in Garfield County, CO. The plant's volumes originate from Williams' gas production in the Piceance Basin. The volumes currently being processed are being delivered to the Willow Creek plant via the Parachute Lateral, the company's 30-inch diameter gathering pipeline (see NGI, May 21, 2007). Gas is delivered into the Parachute Lateral downstream of Williams' Parachute processing plant. After processing at Willow Creek, the Parachute Lateral then delivers the gas north to the Greasewood and White River hubs. The Willow Creek plant is currently recovering approximately 20,000 b/d of natural gas liquids (NGL).
FERC issued a favorable environmental assessment (EA) of Northwest Pipeline's Sundance Trail Expansion Project in Colorado and Wyoming. The Sundance Trail Expansion Project would provide an incremental 150,000 Dth/d of firm transportation capacity from the Greasewood and Meeker/White River hubs in the Piceance Basin in Rio Blanco County, CO, to an interconnect with Kern River Gas Transmission at the Opal Hub in Lincoln County, WY, where natural gas could be transported to Utah, southern Nevada and Southern California markets, the EA said [CP09-415]. In May Northwest reported that it had entered into a precedent agreement with affiliate Williams Gas Marketing Inc. for the full 150,000 Dth/d of expansion capacity (see NGI, May 25). Northwest, a Williams pipeline, proposed the expansion to move additional gas supplies being produced in the Piceance Basin to the Opal Hub, a liquid supply hub with access to six interstate pipeline. The expansion calls for the construction of approximately 15.5 miles of 30-inch diameter mainline loop in Lincoln County, and the installation of 3,980 hp of new compression at Vernal Compressor Station in Uintah County, UT. Northwest also seeks to replace two compressor units at Vernal with new compression facilities, as well as make minor modifications. The pipeline has called on FERC to issue a certificate by no later than Jan. 29, 2010 so that the expansion project can be in service by the start of the winter heating season on Nov. 1, 2010.
FERC issued a favorable environmental assessment (EA) of Transcontinental Gas Pipeline's (Transco) Bayonne Delivery Lateral in New Jersey. The Transco project includes the conversion of 5.41 miles of pipeline to natural gas use and the construction of two small laterals to provide service to the $400 million Bayonne Energy Center (BEC), a 512 MW simple-cycle power plant that will be built in Bayonne, NJ. The BEC, to be constructed by Pure Energy Resources (owned by the United Kingdom's BG Group), would serve New York City through three new 6.75-mile 345-kV submarine transmission lines, which will cross New York Harbor to an interconnect with the ConEdison Gowanus substation in Brooklyn, NY. The proposed Bayonne Delivery Lateral would provide 125,000 Dth/d of natural gas to BEC for use in the generation of electric power [CP09-417] . The BEC project currently is being reviewed for consideration by several regulatory and economic development agencies in New Jersey and New York, according to FERC. If Pure Energy obtains all necessary permits and authorizations by this fall, construction could begin and the BEC project could be operation by late 2011, according to the FERC EA.
Atmos Pipeline and Storage LLC is seeking FERC approval of an arrangement that would allow for the transfer of ownership of an agency-approved 25 Bcf storage project in Louisiana to a new subsidiary that was set up for the purpose of owning and operating the Fort Necessity Storage Project. Fort Necessity Natural Gas Storage LLC is a new company owned by Atmos Pipeline, a subsidiary of Atmos Energy Holdings Inc. Atmos Energy Holdings, in turn, is wholly owned by Dallas-based Atmos Energy Corp. Atmos Pipeline is asking the Federal Energy Regulatory Commission for authority to abandon its certificate, which the agency issued in June, and instead grant a certificate to Fort Necessity Natural Gas to build and own the storage project (see NGI, June 22). The Fort Necessity project calls for the construction of three underground salt dome caverns in the Fort Necessity salt dome formation, approximately 12 miles south-southwest of Winnsboro, LA. The three caverns would have a combined total capacity of nearly 24.75 Bcf, of which 15 Bcf would be working capacity [CP09-22]. Atmos has targeted the first cavern to be operational by early 2011 and the other two caverns to be in service by 2012 and 2014.
Idaho regulators have cut Intermountain Gas Co.'s retail natural gas utility rates and are considering a request by Spokane, WA-based Avista Utilities to cut its rates. For Intermountain, the Idaho Public Utilities Commission (PUC) authorized decreases of more than 20% in the purchased gas adjustment (PGA) portion of the utility's rates for residential (22.2% drop) and commercial (21.6%) customers. Separately, the PUC said it would take comments through Oct. 16 on Avista's latest request to drop its retail residential gas rates by 17.8% as part of the combination utility's PGA.
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