Calgary-based Canadian Superior Energy Inc. said it is on track to file by the third quarter of 2010 applications for federal and state permits for the Liberty Natural Gas Transmission Project, which would include a liquefied natural gas (LNG) offshore receipt turret and associated pipeline. The turret would be located in federal waters offshore New Jersey (see NGI, May 26, 2008). Oversight of Liberty would be conducted by Excalibur Energy (USA) Inc., which is a joint venture of Canadian Superior and Global LNG Inc. "The company believes market conditions for importing LNG into the New York metropolitan area remain favorable and the Liberty LNG project's choice of environmentally favorable technology continues to receive strong local support. The Liberty LNG project anticipates first gas imports into the region by year-end 2013," the company said.
Martin Midstream Partners LP said its Waskom Gas Processing Co. (WGPC) joint venture has agreed to buy the East Texas natural gas gathering and processing assets of Crosstex Energy LP and Crosstex Energy Inc. for $40 million. The assets to be purchased consist of approximately 60 miles of gathering pipelines, two compressor stations and three gas processing refrigeration plants. The system's current throughput capacity is approximately 75 MMcf/d, which can be expanded with additional compression. The transaction is subject to normal conditions and is expected to close in this month. WGPC's general partners are CenterPoint Energy Gas Processing Co., a subsidiary of CenterPoint Energy Inc.; and Prism Gas Systems I LP, the operator of WGPC and a subsidiary of Martin Midstream Partners. "These assets complement WGPC's existing infrastructure and strengthen its position for future Cotton Valley and Haynesville production. The transaction mirrors our focused growth strategy in these key production areas," said Ruben Martin, CEO of Martin Midstream GP LLC, the general partner of Martin Midstream Partners. The partnership also said it has amended and extended its senior secured credit facility that was originally scheduled to mature on Nov. 10, 2010. The partnership increased its borrowing capacity to $335.67 million and extended the maturity date to Nov. 9, 2012.
Targa Resources Partners LP plans to expand the capacity of its Cedar Bayou Fractionators LP (CBF) natural gas liquids (NGL) fractionation facility located in Mont Belvieu, TX, the company said. The maximum gross fractionation capacity of the facility is anticipated to be expanded by 28% to 275,000 b/d, an increase of 60,000 b/d. The project will increase the partnership's maximum gross NGL fractionation capacity along the Texas and Louisiana Gulf Coast to 439,000 b/d. The CBF expansion is expected to be supported by a long-term, firm space fractionation agreement at market-based fees with ONEOK Partners LP. CBF and ONEOK expect to finalize an agreement soon, Targa said. The partnership expects the expansion to be operational during the first quarter of 2011, subject to regulatory approvals, with no disruption to existing operations during the construction phase. Total capital expenditures for the expansion will be significantly lower than a greenfield fractionation facility because the new capacity will be integrated with existing fractionation capacity, utilities, infrastructure and footprint already in operation at Mont Belvieu, Targa said.
Offshore lease owners and operators will be subject to new fees to recover costs of inspections conducted during fiscal 2010, the Department of Interior's Minerals Management Service (MMS) said. "These fees, mandated by Congress, will help MMS and taxpayers recover some of the costs associated with offshore inspections, which include safety and environmental compliance inspections of facilities and equipment, said MMS Director Liz Birnbaum. MMS personnel inspect about 3,400 oil and gas facilities each year to ensure that safety and environmental requirements are met and to check the calibration of meters and gauges that record the amount of oil/gas produced from a particular lease. The MMS inspection fees cover all bottom-founded structures and floating production facilities on the Outer Continental Shelf (OCS) in the Gulf of Mexico and are the result of legislation signed by the president last October. "Public Law 111-88, Department of the Interior, Environment, and Related Agencies Appropriations Act, 2010," directs MMS to collect $10 million for safety and environmental compliance inspections that occur on OCS oil and gas facilities in the Gulf of Mexico and a few in the Pacific Ocean off the coast of California. The law establishes the fee for inspection activities based on the number of wells per facility. The inspection fees for 2010 include $2,000 for facilities with no wells but with processing equipment and gathering lines; $3,250 for facilities with one to 10 wells with any combination of active or inactive wells; and $6,000 for facilities with more than 10 wells with any combination of active or inactive wells. The notice is available at www.mms.gov.
Spokane, WA-based Avista Utilities received approval from Washington state regulators for retail natural gas and electric rate increases, effective Jan. 1. A $557,000, or 0.3%, natural gas hike and a $12.1 million, or 2.8%, electric rate increase were approved by the Washington Utilities and Transportation Commission (WUTC). Avista officials expressed disappointment in the rate decision, noting that following a partial settlement agreement last September the utility lowered its requests from $4.9 million to $2.8 million for the gas hike and from $69.8 million to $37.5 million for the electric increase. The utility plans to file another general rate case by the end of the first quarter in 2010, the company said. Separately, Avista reaffirmed its 2010 consolidated earnings guidance in the range of $1.55-1.75/diluted share, although it noted that the WUTC decision won't allow the utility to make "meaningful improvement" in reducing regulatory lag in 2010.
ERC has approved CenterPoint Energy Gas Transmission Co.'s request to place into service a further expansion of its Carthage-to-Perryville pipeline to accommodate the need for additional takeaway capacity from the Haynesville shale play in northwest Louisiana and East Texas. However, due to apparent vibration problems with an existing compression unit (#2) at its Vernon Compressor Station in Jackson Parish, LA, CenterPoint told FERC that service on the Phase IV expansion may not begin until Feb. 1. The existing unit will be taken out of service and possibly shipped for repair, according to the pipeline."To maintain service for existing shippers, CEGT plans to operate the new compressor units to continue that [existing] service, rather than initiate the Phase IV service, and immediately subject all shippers (existing and Phase IV) to a curtailment of their capacity due to this maintenance," CEGT said. The Phase IV expansion will 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. CenterPoint said it has a precedent agreement with Chesapeake Energy Corp. for 230,000-274,000 Dth/d of the proposed design capacity of the project, or approximately 84%.
About C$1 billion spent over seven years in the form of tax incentives and rebates could accelerate the shift to using natural gas in Canada's vehicles, industry and advocacy groups, including EnCana Corp., said recently. The Canadian Natural Gas Vehicle Alliance (CNGVA) is leading the initiative to install natural gas vehicle refueling stations along Canada's main transportation corridors. Calgary-based EnCana, the largest gas producer in Canada and a member of the alliance, is supporting the call for federal support. The C$1 billion figure is a hypothetical amount of what it may cost to begin building infrastructure and to offer incentives and rebates to take advantage of growing supplies of natural gas across North America, said EnCana at the same time reporting the "reception is good" from government officials. Talks with Canadian government officials are ongoing. As currently envisioned, transportation corridors from Edmonton to Vancouver and Highway 401 in southern Ontario would be the first to see stations for natural gas refueling. Those stations would cater mostly to commercial vehicles,
In last-minute talks shortly before the year closed, El Paso Corp. trumped an investment group's bid and snapped up the Rockies-based exploration and production (E&P) unit of Flying J Inc. for $103.5 million. Flying J Oil & Gas Inc., headquartered in North Salt Lake, UT, is an independent producer that has been in operation since 1980. The exploration unit focuses its development activities in the Rockies and has core operations in the Uinta Basin of Utah and the Williston Basin in eastern Montana. Flying J was in bankruptcy court in Wilmington, DE, in late December to seek approval to sell its E&P subsidiary to privately held Citation 2004 Investment LLP for $92 million. The two had reached an agreement on the price in November. However, once the hearing began, an attorney for Flying J asked for a court recess to allow time for unscheduled talks with El Paso representatives. Following three hours of talks that were said to take place in the hallway outside of the courtroom, El Paso reached a deal to acquire the E&P unit, and the transaction was approved in court. The transaction is expected to close before year-end.
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