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The second phase of the Sentinel natural gas pipeline expansion by Transcontinental Gas Pipe Line (Transco) has begun service, increasing firm capacity into the Northeast by 102,000 Dth/d, Williams said. Transco placed the first phase of the Sentinel expansion into service last year (see NGI, Jan. 5). The expansion increases total system capacity on the 10,500-mile Transco system to about 8.6 Bcf/d, according to Williams. During the Phase II expansion, Transco added or replaced 14 miles of pipe and modified eight meter stations in Pennsylvania and New Jersey. Phase I added about four miles of pipe in Pennsylvania, modified two meter stations and upgraded compressor stations.

Kern River Gas Transmission Co. has filed an application at the Federal Energy Regulatory Commission to expand its pipeline system between existing receipt points in Lincoln County, WY, to the Pecos delivery point in Clark County, NV, by 266,000 Dth/d to meet growing power generation demand for natural gas. The project (Apex Expansion) calls for the construction of approximately 28 miles of 36-inch diameter pipeline in an unlooped portion of Kern River's existing mainline across the Wasatch Mountains in northern Utah; the installation of a new, single-unit 30,000-hp ISO-rated compressor station in Beaver County, UT; the addition of three 16,000-hp compressor units, with one to be installed at each of three existing compressor stations in Utah, Nevada and Wyoming; restaging of three boost compressors at existing compressor stations; and replacement of a boost compressor. The proposed addition would close one of two unlooped sections of Kern River's mainline and add 78,000 ISO-rated hp to Kern River's system, increasing its summer design capacity to 2.14 million Dth/d from 1.87 million Dth/d. The other unlooped portion of Kern River is around the city of Las Vegas, NV. Kern River said it has executed a precedent agreement and a long-term, firm transportation service agreement with Nevada Power Co., which began doing business as NV Energy (NVE) in 2008, for the entire capacity to be created by the expansion. The pipeline has asked the FERC to issue a certificate by Sept. 16, 2010, so it can begin construction in the following month and have the facilities placed in service by Nov. 1, 2011.

Williams has filed an application with FERC to expand its Transcontinental Gas Pipe Line (Transco) to serve markets in the southeastern United States. New service from the Mobile Bay South II Expansion project would be available in the spring of 2011, subject to Federal Energy Regulatory Commission approval, Williams said. The project is designed to add 380,000 Dth/d of southbound, year-round firm transportation capacity on the Mobile Bay Lateral from Transco's mainline at Station 85 near Butler, AL, to its interconnect with Gulfstream Natural Gas System in Coden, AL (see NGI, July 6). In September FERC approved Transco's 85 North project -- a proposal to expand its pipeline by 308,500 Dth/d (see NGI, Sept. 14). The Mobile Bay South II Expansion and the 85 North project together create more than half a Bcf of takeaway capacity from Station 85 in west-central Alabama to downstream markets. The Mobile Bay South II Expansion project will require a compression addition of 8,180 hp at Transco Station 85 and facility modifications at Station 83. Williams estimates that the project facilities will cost approximately $36 million. The 85 North project will cost approximately $248 million.

The Texas Supreme Court agreed to grant a rehearing in a long legal battle in which predecessor companies of ExxonMobil Corp. are accused of sabotaging abandoned natural gas and oil wells in South Texas. Emerald Oil & Gas Co. LP, which had attempted to develop some abandoned wells that had originally been drilled by a predecessor of ExxonMobil company, had asked the high court to review the case (Exxon Corp. et al vs. Emerald Oil & Gas Co. LP et al, No. 05-1076). Landowners that allowed Emerald to work the leasehold accused ExxonMobil of filling the abandoned wells with well service "junk," including discarded tools and sludge, to prevent future drilling. ExxonMobil has denied wrongdoing. Emerald won at trial in 1999, but the Texas Supreme Court later reversed the finding, which threw the case back to the Thirteenth Court of Appeals in Corpus Christi, TX. The high court's reversal, however, led some state officials to urge the case be reopened. Jerry Patterson, commissioner of the Texas General Land Office, filed an amicus brief for Emerald urging the high court to reconsider. No hearing date has been set.

DCP Midstream Partners LP is paying DTE Energy subsidiary MichCon Pipeline Co. $45.1 million in cash to acquire some natural gas gathering and treating assets in the Antrim Shale of Michigan. The assets are in northern Michigan adjacent to the partnership's Antrim Shale assets. The acquisition is expected to close by the end of the year, the partnership said. In a related announcement, the partnership said it would launch an underwritten public offering for at least 2.5 million of its common units with the proceeds to be used to fund the MichCon purchase or, if the acquisition isn't completed, to reduce outstanding debt.

Gastar Exploration Ltd. has sold its majority interest in the Hilltop Resort Gathering System to US Infrastructure LP (USI). The Hilltop Resort Gathering System is composed of 20 miles of gas pipeline extending through Robertson and Leon Counties, TX, with a gathering capacity of 120 MMcf/d. The system is connected to 24 Gastar-operated wells, which produce from the middle and lower Bossier and Knowles formations in East Texas. Gastar received approximately $21.7 million, net of costs and expenses associated with the transaction. "The sale of our stake in the Hilltop system provides an attractive return on our investment and additional liquidity to pursue our drilling plans in East Texas and the Marcellus Shale while maintaining a very low level of leverage," said Gastar CEO J. Russell Porter. USI partnered with Metalmark Capital to finance the transaction.

The Department of the Interior's Minerals Management Service has released the guide "Oil and Gas Leasing on the Outer Continental Shelf," detailing the federal offshore oil and gas leasing process. The 10-page brochure highlights statutory requirements and authorities, the process for developing the Five Year Outer Continental Shelf (OCS) Oil and Gas Leasing Program, the process for planning and conducting specific lease sales and other related topics. "Given the importance of the national discussion regarding offshore energy development and this administration's commitment to transparency, we are providing this brochure as a quick reference on the basic processes for authorizing oil and gas development on the OCS," MMS Director Liz Birnbaum said. The guide is available at www.mms.gov.

The Department of Interior's Minerals Management Service (MMS) met with officials from Rhode Island to discuss renewable energy development on the Outer Continental Shelf (OCS). MMS is in the process of establishing task forces to consult with states concerning renewable energy leasing and development on the OCS. Gov. Donald L. Carcieri designated Grover Fugate, executive director of the Rhode Island Coastal Resources Management Council (CRMC), as well as Brian A. Goldman, CRMC legal counsel, to work with MMS to establish the Rhode Island task force. Participants discussed specific actions and timelines required by MMS and the state to support Rhode Island's goal of developing offshore renewable energy. In April President Obama said MMS had finalized the framework for renewable energy development on the OCS. The framework provides for MMS to use task forces in carrying out its responsibilities for authorizing OCS renewable energy activities in partnership with state, local and tribal governments and federal agencies.

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