The U.S. Supreme Court upheld a lower court's decision that a distributor could owe county taxes on natural gas that it stores temporarily along the interstate gas pipeline system. Kansas City, MO-based Missouri Gas Energy (MGE), a subsidiary of Southern Union, challenged the Oklahoma Supreme Court decision, which held that MGE owed Woods County, OK, taxes for gas stored in the North Hopeton storage facility in the Oklahoma Panhandle. Before the high court, MGE argued that it was immune to the taxation under the the Commerce Clause. Millions of dollars were at stake in the case. Harriet Miers, former White House counsel and former President George W. Bush's one-time nominee for the Supreme Court, filed the petition for certiorari in 2009 on behalf of MGE (see NGI, Oct. 19, 2009). At issue in the case was whether states and local governments have the power to tax a distributor's natural gas that is stored temporarily in an interstate pipeline system.
A major expansion of the Elba Island liquefied natural gas (LNG) import terminal in Georgia and the new Elba Express Pipeline went into service March 1 to serve growing demand in southeastern and eastern U.S. markets, El Paso Corp. said. The vaporization sendout capacity at the Elba Island LNG facility has been increased to 1.75 Bcf/d. A fifth tank is scheduled to go into service this summer, raising terminal storage capacity by 4.2 Bcf to 11.5 Bcf, said El Paso's Southern LNG Inc., owner and operator of the terminal. The new 190-mile, 42-inch and 36-inch diameter Elba Express Pipeline has the capability to transport 945 MMcf/d from the terminal to markets in the southeastern and eastern United States. The pipeline and terminal expansion are fully supported by long-term firm capacity commitments from Shell NA LNG LLC, the company said. At the discretion of customer BG Group, Elba Island terminal may add a sixth storage tank to increase capacity to 15.7 Bcf, said spokesman Bill Baerg. He estimated that this phase-two project could be operational in 2014.
A unit of Williams Partners LP is holding a binding open season through March 26 for an expansion of its Transco pipeline to provide incremental firm capacity to transport Marcellus Shale gas from Pennsylvania to New York and New Jersey markets. The Northeast Supply Link expansion project is designed to provide 420,000 Dth/d of firm service on Transco from interconnections accessing Marcellus production along its Leidy Line in Pennsylvania to its Station 210 pooling point and existing New York City delivery points. Transco has executed a precedent agreement with an anchor shipper for 200,000 Dth/d of the capacity; the remaining 220,000 Dth/d is being offered in the open season. The first phase of the project is designed to be placed in service in November 2012, providing 120,000 Dth/d of firm service. The second and final phase would follow in November 2013. For information contact Gary Duvall at (713) 215-2589.
Enbridge Inc. said it is conducting a nonbinding open season for gas storage and transportation services in the Midwest through its subsidiaries Enbridge Gas Distribution Inc. and Niagara Gas Transmission Ltd. Enbridge said the open season will allow the company to assess development of incremental gas storage capacity/services at Enbridge Gas Distribution's Tecumseh facility in southwestern Ontario near the Dawn gas trading hub and developing incremental transportation capacity on the Corunna-Tecumseh-Dawn pathway. Enbridge said it has a range of gas storage and transportation development options, "which can be put into place in a timely basis to take advantage of market opportunities such as U.S. shale gas and gas-fired generation." The open season closes March 26. Information is available at www.enbridge.com/gasexpansion.
Cardinal Pipeline Co. LLC said it has executed precedent agreements to increase its firm capacity by 199,000 Dth/d. The pipeline will transport additional gas to serve markets served by Piedmont Natural Gas Co. Inc. and Public Service Co. of North Carolina (PSNC) from an interconnect with Williams Partners LP's Transco pipeline. The $39 million Cardinal System Expansion project is scheduled to enter service in July 2012 and has been designed to serve growth on Piedmont's and PSNC Energy's distribution systems, including an expansion on Piedmont's system to serve Progress Energy Carolinas' planned gas-fired power generation facility in Wayne County, NC. Cardinal Pipeline is a 105-mile, 24-inch diameter pipeline from Rockingham County, NC, to a point southeast of Raleigh, NC, with a design capacity of approximately 279,000 Dth/d. The pipeline is a North Carolina limited liability company whose members are wholly owned subsidiaries of Williams Partners, PSNC Energy and Piedmont.
Junior producer Lucas Energy Inc., based in Houston, said it has entered into a letter of intent to form a joint venture (JV) with an unnamed privately owned producer to develop some properties in the Eagle Ford Shale in South Texas. The JV partner would acquire an 85% working interest under the agreement and would provide Lucas with an estimated $1/share in cash, the producer said. The letter of intent is nonbinding and subject to completion of the purchase and sale agreement, which is expected by the end of March, Lucas said. According to Lucas, the JV does not include any producing wells or current production sale at closing.
Natural gas-weighted Carrizo Oil & Gas Inc. finished 2009 with its proven reserves up 20% year/year (y/y) to a record 601.9 Bcf from 502.6 Bcf, the Houston-based explorer said. Under revised Securities and Exchange Commission (SEC) reserves rules, Carrizo said its core Barnett Shale leasehold was responsible for most of the new proven reserves, which jumped 137.6 Bcfe, or 32%, to 569.7 Bcfe from 432.1 Bcfe y/y. Production in 4Q2009 was a record 8.68 Bcfe (94.4 MMcfe/d), or more than 20% above the 7.21 Bcfe (78.4 MMcfe/d) of production in 4Q2008 and 5.8% above sequential production in 3Q2009. Annual production for 2009 reached a record level of 33 Bcfe (90.5 MMcfe/d), or 28.9% higher than the 25.6 Bcfe (70 MMcfe/d) in 2008.
The California Public Utilities Commission (CPUC) should reject Southern California Gas Co.'s (SoCalGas) application to spend $1 billion to upgrade nearly six million meters to advanced devices with two-way communication capabilities, according to the state's Division of Ratepayer Advocates (DRA), an independent consumer advocacy division of the CPUC. SoCalGas customers would receive only about 85 cents in benefits for every dollar spent on the project, according to DRA. DRA did not dispute the possibility that customers would reduce their usage with the help of smart meters, but it found that SoCalGas overestimated the total reduction in usage by nearly 300%. DRA also said that the project's $1 billion price tag does not include $40 million needed for in-home displays that about 400,000 customers would need to obtain any conservation benefit from the program.
Altech-Eco Corp. of Asheville, NC, has obtained a certificate of conformity from the U.S. Environmental Protection Agency (EPA) for its 2010 Ford Transit Connect compressed natural gas (CNG) conversion system. The conversion allows the vehicle to run entirely on natural gas, making it the only EPA-certified 2010 CNG system for the 2010 Transit Connect worldwide, the company said. Households or companies can receive a $4,000 federal income tax credit by purchasing the vehicle. A bi-fuel option using both CNG and gasoline is also available. The CNG conversion system for the Transit Connect is now available at participating Ford dealers and approved aftermarket conversion facilities, or by contacting Altech-Eco.
Wyoming Interstate Co. Ltd. (WIC) changed its name to Wyoming Interstate Co. LLC after the Rockies pipeline was converted to a Delaware limited liability company. The change does not affect customer contracts or other transactions with WIC such as contracts or billing remittance information, access to the CIG Xpress nominations system, etc. Anyone wanting a copy of the certificate issued by the Delaware secretary of state should contact Edgar Trillo at email@example.com.
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