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Natural Gas Intelligence

Natural Gas Intelligence
October 1, 2012 Volume 32, No. 6

News This Week :

EIA: Natural Gas Shatters Records in 2011
The nation last year set new records in a variety of categories for natural gas, including gross withdrawals, number of producing wells, domestic consumption, exports, and dry, marketed and onshore production, according to the U.S. Energy Information Administration (EIA). more

Court Tosses Out CFTC Position Limit Rule
In a major victory for market speculators, a federal court in Washington, DC, late Friday tossed out the Commodity Futures Trading Commission's controversial final rule aimed at limiting speculative trading in the swaps market. more

Canada Weighing Energy Export Controls
For the first time in 22 years a surviving relic of Canadian energy trade regulation -- volume control on natural gas and oil exports -- has popped up on the national agenda for review and change. The renewed interest comes when British Columbia is poised to become the departure point for tankers bound for Asian markets with liquefied Canadian gas. more

Marcellus Liquids Bound for Europe
Marcellus Shale ethane is a long way from the Mont Belvieu, TX, market center, making it the most likely supply to be rejected in times of surplus. But Marcellus producer Range Resources Corp. has an alternative -- and a contract -- to deliver some of its ethane to Philadelphia for sale to a European petrochemical producer. more

North American Pipeline Security Breach Confirmed
Telvent, a Canadian firm whose software systems and services are used to remotely manage more than half of the oil and gas pipelines in North America and Latin America, last Wednesday confirmed a security breach involving the project files of some of its customers. more

Shippers Mostly Ready to Rehab Columbia Gas Pipeline
Appalachian/Marcellus natural gas producers and distributors expressed their support -- or said they did not oppose -- Columbia Gas Transmission LLC's proposed settlement aimed at a long-overdue modernization of its natural gas pipeline system, but the NiSource Inc. line's proposal to recover its investment via a tracker-surcharge drew some critics. more

DOE Likely Won't Cap LNG Exports, Say Experts
Assuming the U.S. Department of Energy (DOE) decides to allow export of U.S. liquefied natural gas (LNG), the agency will likely leave it up to markets to determine how much LNG is sent abroad, two industry veterans told NGI. more

U.S. Onshore Still Tops for Investment, Says Tudor
The onshore United States "remains the No. 1 place for investment" and the likelihood for future dealmaking "remains high," according to Tudor, Pickering, Holt & Co. (TPH) CEO Bobby Tudor. more

Ethane's Glass: Is it Full or Really Full?
U.S. ethane presents a "wall of worry" to gas producers and processors (which fear margin collapse), pipelines (which fret over volumes) and consumers (which fear scarcity and high prices), an industry analyst said in Houston last week. There is always something to worry about, but there's always something on which to disagree, too. more

WSI: North Pacific Signal to Warm Northeast To Year's End
Much of the eastern United States will experience generally mild temperatures through the end of the year despite an El Nino event in the tropical Pacific Ocean, as cooling waters in the more northern Pacific begin to exert their influence on North American weather patterns, according to forecasters at Andover, MA-based Weather Services International (WSI). And the 2012 Atlantic hurricane season may already be winding down, WSI said. more

Canada Clamping Down on Pipeline Violations
Stiff new fines are in store for sloppy digging or other misbehavior -- by any company or person -- that causes leaks and spills from Canadian long-distance pipelines under federal regulation, more

NARUC May Consider Gas-Electricity Coordination
The board of the National Association of Regulatory Utility Commissioners (NARUC) may address the issue of coordinating U.S. natural gas and electricity grids at its next national meeting, according to the head of the natural gas committee. more

Barclays: Associated Gas Bolsters Dry Gas Production
Despite the fact that rig counts have fallen across the shale basins, analysts at Barclays Capital said they believe that associated gas production will continue to grow to offset a portion of the decline in production from dry gas drilling. more

Basis Blowouts May Return, Analyst Warns
The recent construction wave of natural gas pipeline infrastructure might have flattened basis differentials, but not forever, according to BNP Paribas analyst Teri Viswanath. More infrastructure will be needed to avoid market constraints and basis spikes down the road, she wrote in a market note last week. more

'Major Energy Policy Reset' Called Key to Fiscal Recovery
Dramatically increasing the production of domestic natural gas, oil and coal offers the United States its best opportunity to create sustainable jobs, but political wrangling stands in the way of achieving that goal, according to a new report from the Manhattan Institute for Policy Research. more

Energy Providers Ask for Dodd-Frank Delay
Three energy groups have called on the Commodity Futures Trading Commission (CFTC) to postpone the Oct. 12 date for nonswap dealers and nonmajor swap participants to comply with Title VII of Dodd-Frank Wall Street Reform Act by a minimum of a year (see NGI, Sept. 17). more

CME Assures Customers Ahead of Swap Dealer Rule Enactment
Looking to allay concerns from customers that some of its new product offerings will force a change in how they trade, CME Group issued an open letter last week that more fully explains how the exchange will operate once Dodd-Frank Wall Street Reform Act regulations on swap dealer registrations going into effect Oct. 12. The exchange also explained in more depth the previously announced rollout of a broad suite of new natural gas and power contracts that will be listed as futures on CME Globex, the New York Mercantile Exchange (Nymex) trading floor and CME ClearPort, and will be available for trading on CME Direct, a platform offering side-by-side trading and straight-through processing and clearing of exchange-listed and over the counter (OTC) energy markets. more

CNG Fueling Station Network Planned for Florida, Georgia
Tallahassee, FL-based Nopetro LLC has opened in its hometown a compressed natural gas (CNG) fueling facility, part of a planned regional network "that will make CNG a workable cost-saving option for government and commercial fleets as well as individual CNG vehicle owners," the company said last week. more

Williams Accord Expands Canada Gas Processing Volumes 60%
Williams has clinched a long-term natural gas processing agreement that expands its Canadian natural gas processing volumes by 60% and opens the door to a growing petrochemical business. more

Delaware Basin Ruling Leads to More Questions
A lawsuit that sought an extensive environmental review of hydraulic fracturing (fracking) in the Delaware River Basin by the State of New York and a coalition of environmental groups has been dismissed by a federal judge, but the ruling left open to question whether an environmental assessment (EA) may be required in the future. more

Big Incentives for Producers to Reduce Water Use, Say Execs
Environmental questions and high costs for water have created a big headache for unconventional oil and gas producers, but it won't take long before those problems are turned into opportunities for other businesses, according to industry executives. more

LNG Capacity Moves to High Horsepower Applications
Making the most of America's recently realized and growing natural gas endowment dictates the use of gas for more than the traditional commercial and industrial applications. Many people are working to promote LNG as an alternative to fuels such as diesel and propane. One of them is Peter Tumminello, AGL Resources Co. executive vice president of wholesale services. more

FERC OKs Abandonment of Risky Portion of Southern Line
FERC has approved Southern Natural Gas Co. LLC's (SNG) request to abandon nearly 20 miles of pipeline and associated facilities in Alabama to comply with a correction action order issued by the Pipeline and Hazardous Materials Safety Administration (PHMSA) to address the hazards associated with wrinkle bends, which led to a failure on SNG's system in late 2009. more

New Reports, No New Conclusions in Wyoming Water Reports
In an fierce debate about whether hydraulic fracturing (fracking) and the chemicals used in the process may be to blame for contaminating the water supply of some Wyoming residents, Encana Corp. last week continued to press the U.S. Environmental Protection Agency (EPA) for "key technical data and information" about water wells re-tested near its natural gas development in Pavillion, WY, to enable the company to properly respond by an October deadline. The U.S. Geological Survey (USGS) issued two reports last week that appeared to do nothing to quell the debate. more

Dow Exec: Don't Dull U.S. 'Competitive Edge'
With shale gas the United States has an abundant natural resource that wasn't on the industrial or economic development radar screen a mere five years ago. In other words, "a competitive edge is coming back to America," Dow Chemical Co.'s Brian Ames told a Houston audience last week. more

Shell, Quicksilver Join Forces in Colorado's Sand Wash Basin
Quicksilver Resources Inc. has executed an agreement with the U.S. exploration arm of Royal Dutch Shell plc to establish an area of mutual interest (AMI) covering more than 850,000 acres of the Sand Wash Basin in northwestern Colorado. more

New Pipeline Safety Bills Enacted in California
California Gov. Jerry Brown has signed into law four pipeline safety bills that in part deal with the 2010 San Bruno pipeline explosion. He also signed a half-dozen other energy-related bills in the final days of September. more

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