The Federal Energy Regulatory Commission has approved Transcontinental Gas Pipe Line's (Transco) Northeast Supply Link project to provide additional firm transportation service from the Marcellus Shale. The project would provide 250,000 Dth/d of incremental firm transportation capacity from supply interconnections on Transco's Leidy Line in Pennsylvania to its 210 Market Pool in New Jersey and the Manhattan, Central Manhattan and Narrows delivery points in New York City. Thirteen miles of additional 42-inch diameter pipe segments, called loops, are to be built in Pennsylvania and New Jersey, along with more compression and modifications. The project, which received a favorable environmental assessment in August, is slated to be completed and in operation by November 2013 (see NGI, March 8, 2010). In addition to the loop segments, the Williams' pipeline plans to install a 25,000 hp electric motor-driven compressor station and substation in Essex County, NJ, (Station 303); and install a 16,000 hp natural gas turbine-driven compressor unit at its existing Compressor Station No. 515 in Luzerne County, PA. Four shippers have subscribed for all of the capacity including affiliate Williams Gas Marketing Inc. (135,000 Dth/d); Anadarko Energy Services Co. (67,500 Dth/d); MMGS Inc. (32,500 Dth/d and Hess Corp. (15,000 Dth/d).
Seaside Heights, one of the hardest hit areas in New Jersey by Superstorm Sandy, and which is served by New Jersey Natural Gas (NJNG), may have to wait up to eight months to get gas service, according to borough officials. "I can't comment on where they got that time frame from," an NJNG spokeswoman said. NJNG has provided updates to restore service to 32,000 customers in New Jersey's Ocean and Monmouth counties. On Long Beach Island, the company has completed an assessment and is preparing above-ground facilities for restoration. Assessment and restoration efforts are still ongoing in the Bay Head to Seaside, the Bayshore area and Ocean County mainland areas, according to NJNG.
The Pennsylvania Department of Environmental Protection (DEP) has finalized guidelines intended to expedite drilling permits. The final versions of the policies will take effect Wednesday (Nov. 14). Gov. Tom Corbett issued an executive order calling for the changes on July 24 on the grounds that the oil and natural gas industry, nonprofit groups and local governments have complained that the current process is inefficient and unpredictable (see NGI, July 30). Under the new process, the DEP may deny an application if it lacks necessary information.
Inergy subsidiary Central New York Oil and Gas Co. (CNYOG) was approved by the Federal Energy Regulatory Commission to begin partial service on its MARC-I Hub Line project in northeastern Pennsylvania by Wednesday (Nov. 14), offering more access to Marcellus Shale gas. Authorization to place the entire project into operation by Dec. 1 is underway. CNYOG's request for partial service, filed in late October, excluded the operation of its M1-S compressor Station and related facilities at the southern terminus of the pipeline because construction was not complete, the Commission noted [CP10-480]. The points of receipt include Tennessee Gas Pipeline, Stagecoach Gas Storage-South Lateral; and points of receipt on the MARC I Hub Line between the M1-S Compressor Station and Tennessee. Primary points of delivery are Tennessee and Stagecoach Storage-South Lateral, while the secondary delivery point is Transcontinental Gas Pipe Line. The project, approved in November 2011, involved construction of a 39-mile, 30-inch diameter pipeline in northeastern Pennsylvania and compression facilities (see NGI, July 25, 2011). The project will have about 550,000 Dth/d of firm capacity, and it clears the way for gas produced in the northeastern Pennsylvania counties to be stored at CNYOG's Stagecoach Gas Storage facility near Oswego, NY.
TransCanada Corp. Mexican subsidiary Transportadora de Gas Natural del Noroeste was awarded a contract to build, own and operate the El Oro-to-Mazatlan Pipeline (Mazatlan Pipeline) in Mexico by Mexico's Comision Federal de Electricidad (CFE), which is expected to cost $400 million. CFE recently awarded the TransCanada subsidiary a $1 billion contract for the $1 billion El Encino-to-Topolobampo Pipeline (Topolobampo Pipeline) project (see NGI, Nov. 5). The 257-mile Mazatlan pipe would begin at El Oro and end in Mazatlan, in the state of Sinaloa. The 24-inch diameter pipeline would have contracted capacity of 202 MMcf/d with in-service planned in 4Q2016; it would interconnect with the Topolobampo gasline. Construction for the two pipelines is supported by 25-year gas transportation service contracts with the CFE.
Constitution Pipeline Co. LLC and Leatherstocking Gas Co. LLC are pursuing agreements for delivery interconnects for a 121-mile "open access" natural gas pipeline, which would allow municipalities and public utilities to tap for residential, commercial and industrial customers. Leatherstocking, a 50-50 joint venture (JV) of Corning Natural Gas Corp. and Mirabito Holdings Inc., said the network of gas distribution pipelines in counties along and above the New York-Pennsylvania border would be completed by 2015, regardless of the status of the Constitution Pipeline, a JV project between Williams Partners LP and Cabot Oil & Gas Corp. (see NGI, Feb. 27).
Most candidates running for office in New York on a platform opposed to hydraulic fracturing (fracking) were soundly defeated at the polls, but it was unclear if Republicans would maintain control of the state Senate with two races too close to call on Friday. In the New York State Assembly races, Republicans Claudia Tenney (101st district), Bill Nojay (133) were reelected, while Peter Lopez (102) captured a seat that was being vacated. GOP incumbents William Barclay (120), Cliff Crouch (122), Gary Finch (126) and Phil Palmesano (132) were unopposed. In the state Senate, GOP incumbents James Seward (51) and Tom Libous (52) were re-elected; three other unopposed GOP incumbents, John Bonacic (42), Tom O'Mara (58) and Catherine Young (57) also won. In the 22nd Congressional District race, Republican incumbent Richard Hanna won, while in the 23rd Congressional District race GOP incumbent Tom Reed won. Broome County Executive Debbie Preston, a Republican and a supporter of natural gas development, defeated an anti-fracking activist. However, U.S. Democratic Sen. Kirsten Gillebrand won re-election. In state Assembly races, three Democratic incumbents prevailed in districts 100, 121 and 123.
Onondaga, NY's board has voted to extend a moratorium on hydraulic fracturing until Feb. 13, or until the town "enacts comprehensive legislation regulating such uses," whichever occurs first. The board is scheduled to meet Dec. 3 to discuss the issue. Local Law No. 7-2012 calls for an effective "moratorium on and prohibition of gas and petroleum exploration and extraction activities, underground storage of natural gas, and disposal of natural gas or petroleum extraction, exploration and production wastes." Onondaga enacted the moratorium in 2011 and extended it this year.
Winning bids in the Alaska Department of Natural Resources (DNR) lease sales for the North Slope, North Slope Foothills and the Beaufort Sea totaled $14.2 million, with $11.5 million from the North Slope sale. A year ago DNR netted more than 300 bids, with a total high bid value of $21 million. The North Slope area lease sale was the fourth largest by dollar amount since area-wide lease sales began in 1998. DNR's Division of Oil and Gas received 132 bids on 122 tracts from 13 different bidding groups, encompassing 310,500 acres. The highest bid was $1.16 million for Tract No. 959 by the group composed of ConocoPhillips Alaska Inc., BP Exploration (Alaska) Inc., Chevron USA Inc. and ExxonMobil Alaska Production Inc. The North Slope Foothills area, which hasn't received bids in three years, had eight bids, the fourth best result for that area.
Natural gas and oil executives are less optimistic about the global economy improving over the coming year, according to a recent Ernst & Young survey of senior energy executives. The firm's bi-annual Oil & Gas Global Capital Confidence Barometer found that only 27% "feel that the global economy is strongly or modestly improving," sharply down from the 55% recorded in the survey six months ago. The intention to sell assets has declined by almost 70%. The firm surveyed a total of 1,500 senior executives from more than 40 countries, which included 178 oil and gas executives. The oil and gas respondents said uncertainty in the global economy had made them more wary of mergers and acquisitions (M&A), with only 28% expecting to pursue tie-ups in the next 12 months, down from 31% in April and off from 48% a year ago.
Gulf LNG Liquefaction Co. LLC has filed an application with the Department of Energy (DOE) to export liquefied natural gas (LNG) to countries with U.S. free trade agreements (FTA). The Gulf LNG Holdings Group LLC subsidiary wants to export up to 547.5 Bcfe a year, or 1.5 Bcf/d, over a 20-year period. If approved, LNG would be exported from its terminal in Pascagoula, MS. DOE in June granted Gulf LNG authority to export up to 547.5 Bcfe a year for 25 years to FTA countries (see NGI,June 25). Gulf LNG said it will ask the Federal Energy Regulatory Commission to initiate the mandatory pre-filing review process and anticipates that its request will be made before the end of 2013. DOE is seeking public comments by Jan. 4.
CenterPoint Energy Gas Transmission (CEGT) has asked the Federal Energy Regulatory Commission for authorization to place its 17-mile, small-diameter Line replacement project in southwestern Arkansas in service by Monday (Nov. 12). The project involved the replacement of vintage Line AM-46 with the Line AM-204 facilities. CEGT said it intended to "complete taps and connections between the project replacement pipeline (Line AM-204) and CEGT's existing Lines AM 182, AM-182A and AM-46, and subsequently purge and pack the pipeline with natural gas" by Saturday (Nov. 10). The project involved the construction of a 10-inch diameter pipeline and associated facilities in Howard, Hempstead and Little River counties, the construction of a pig launcher and receiver, as well as the abandonment of 16.2 miles of 8- and 10-inch diameter pipeline [CP11-78]. It will supply about 50 MMcf/d to Ashdown, AR in Little River County.
Antero Resources has sold its Piceance Basin assets in western Colorado, which include 61,000 net acres and 30 miles of gathering pipeline, to focus exploration and production efforts in the Appalachian Basin (see related story). "The Piceance asset sale allows Antero to redeploy capital and human resources to its Marcellus and Utica Shale projects where we are focused on the development of liquids-rich natural gas and oil reserves," CEO Paul Rady said. "With the closing of the Piceance transaction, and our Arkoma Basin exit earlier in 2012, Antero will complete its transformation into a pure-play Appalachian Basin shale producer with a large scale, low cost, liquids-rich drilling inventory."
Continental Resources Inc. has signed separate agreements to buy producing and undeveloped properties in the Bakken Shale for $650 million, and to sell land and assets in its east region for $125 million. The producer plans to purchase from an undisclosed seller 120,000 net acres of leasehold primarily in Divide and Williams counties, ND, with current production about 6,500 boe/d. The east region is primarily composed of properties in Michigan and the Illinois Basin, with production being sold averaging about 1,100 boe/d in 3Q2012. Both transactions are expected to close by the end of the year.
CF Industries Holdings Inc., an agricultural fertilizer manufacturer and distributor, reported record 3Q2012 net earnings of $403.3 million ($6.35/share) and said low natural gas costs were part of a favorable outlook for 2013. "We continue to realize benefits from the low cost of natural gas in North America," said CEO Stephen Wilson. "Gas prices moved up during the quarter but are still lower than the year ago, a benefit that contributed to our strong nitrogen segment gross margin." The company's nitrogen segment posted net sales of $1.1 billion in 3Q2012, an amount essentially unchanged from 3Q2011 as higher prices were offset by lower volumes. CF said it sold 3.0 million tons of ammonia, granular urea, urea ammonium nitrate solutions, ammonium nitrate and other nitrogen products during 3Q2012, down about 3% from the volume sold in 3Q2011.
As it weighs whether to allow exports of liquefied natural gas, the U.S. Department of Energy should consider "benefits from trade that are difficult to quantify or not evident at first sight," according to a new report, "LNG Exports: What State Utility Commissions Need to Know." Ken Costello, principal researcher with the National Regulatory Research Institute, argues that the potential bettering of international relations, positive effects on gas importing countries, and stronger leverage for the United States in trade negotiations should be considered when weighting liquefied natural gas (LNG) exports. The paper is intended to be a guide for state utility regulators when considering the potential consequences of LNG exports, although they don't have a say in the export process. State regulators' "main concern, naturally, is the effect that exports would have on domestic gas prices," Costello wrote. "This paper's primary conclusion is that, even if natural gas prices increase because of LNG exportation, it would be wrong to conclude that LNG exports are bad for the country."
Biogas, including renewable natural gas (RNG), is primed for some strong growth over the next decade through a combination of societal initiatives for waste management, reducing greenhouse gases and shifting to more renewable sources of energy, according to Navigant Consulting's Pike Research. Global biogas production reached the 800 Bcf level annually, and Pike projects that volume will grow to 1.6 Tcf annually by 2022. The report, "Renewable Biogas," concentrates on methane recovery and use in landfills, anaerobic digesters using municipal solid waste, agricultural waste, industrial waste and wastewater treatment.
Railroad Commission of Texas (RRC) Chairman Barry Smitherman, a Republican, retained his seat, and Republican Christi Craddick was picked by voters over Democratic challenger Dale Henry in last week's election. Smitherman did not face a Democratic challenger. He was appointed to the RRC in July 2011. Craddick, an attorney and the daughter of former Texas House Speaker Tom Craddick, grew up in Midland, TX, and has worked in oil and gas law. She will fill the seat being vacated by Buddy Garcia, who was appointed earlier this year to fill the position after it was vacated by Republican Elizabeth Ames Jones, who resigned to campaign for the Texas Senate. Jones lost her bid for the Senate in the primary election.
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