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Tennessee Gas Pipeline has launched an open season through July 31 for firm natural gas transportation capacity on the Connecticut Expansion Project, which would deliver gas from its existing interconnect with Iroquois Gas Transmission in Wright, NY, to Zone 6 delivery points on Tennessee's 200 and 300 Lines in Connecticut. The project, which would require upgrades and modifications to the existing pipeline system in New York, Massachusetts and Connecticut, is slated for service by November 2016. Available capacity would be about 72,100 Dth/d. The pipeline has entered into binding precedent agreements with three anchor shippers. Inexpensive shale gas has recently caught the attention of the Constitution State. In June Connecticut gas distribution utilities Yankee Gas, Connecticut Natural Gas and Southern Connecticut Gas, filed a joint gas expansion plan with the state's Public Utilities Regulatory Authority and the Department of Energy and Environmental Protection (see NGI, June 24). The plan outlines how the utilities would meet expansion goals proposed in the Gov. Dannel Malloy's comprehensive energy strategy and the the recently enacted HB 6360 (see NGI, March 18). The utilities plan a "structured approach" to add 280,000 new gas heating customers over the next 10 years.

Sen. Ron Wyden (D-OR), chairman of the Senate Energy and Natural Resources Committee, may have jumped the gun recently when he said his Republican cohort on the committee, Sen. Lisa Murkowski (R-AK), "always meets me halfway" on energy issues, said Murkowski spokesman Robert Dillon. Moreover, contrary to published reports, natural gas legislation is not in the offing, said a Wyden spokeswoman. Wyden said in an interview with Bloomberg TV's "Capitol Gains," he would "have some new ideas soon," not legislation, to offer on both the demand and production of shale gas. Wyden's assumption that his energy ideas would receive bipartisan support from Murkowski elicited a strong reaction from Murkowski's office. "We don't always meet him halfway," said Dillon. Murkowski is only interested in a singular issue -- improving the pipeline permitting process to build out infrastructure. "We're not looking at any other components...We're not looking at fracking [hydraulic fracturing]," which should remain with the states,with the federal government not acting as a backstop."We're not interested in doing anything that goes beyond" permitting reforms, he noted.

Kinder Morgan Inc. and its partnerships have a total project backlog of about $14 billion, with the natural gas segment totaling about $2.8 billion or 20% at both Kinder Morgan Energy Partners LP and El Paso Pipeline Partners LP, CEO Rich Kinder said in a 2Q2013 conference call "and we expect that backlog to continue to add projects as we go throughout the rest of 2013 and beyond." The Tennessee Gas Pipeline's $376 million Northeast Upgrade Project is set to enter service on Sept. 1, allowing another 636,000 Dth/d to be transported on the 300 Line in Pennsylvania to an interconnect with Algonquin Gas Transmission in Mahwah, NJ. The company also has contracts with three customers in Mexico for a combined volume exceeding 200 MMcf/d. The company's pipelines have exported as much as 1.9 Bcf/d to Mexico in recent weeks, said the CEO (see related story).

ExxonMobil Corp. subsidiary XTO Energy Inc. agreed to pay a $100,000 penalty and spend an estimated $20 million on a plan to improve wastewater management practices following a settlement with the U.S. Environmental Protection Agency and Department of Justice that resolves an alleged violation of the Clean Water Act related to the discharge of hydraulic fracturing wastewater at a Lycoming County, PA, facility. The settlement requires XTO to improve its wastewater management practices to recycle, properly dispose of and prevent spills of wastewater generated from natural gas exploration and production in Pennsylvania and West Virginia. According to the federal agencies, XTO released between 150 barrels (6,300 gallons) to 1,366 barrels (57,373 gallons) of flowback and produced water from its Penn Township wastewater storage facility for about 65 days in late 2010, which allowed pollutants to flow into a tributary of the Susquehanna River.

Valero Energy Corp. is proposing to build a $700 million petrochemicals plant to produce methanol plant in St. Charles Parish, LA, where its transportation fuel refinery is located. The facility would take advantage of the a surplus of natural gas from onshore basins to manufacture a wide range of products, including paints, solvents and plastics. According to the Methanol Institute and the Methanol Market Services Asia, formaldehyde production is the largest user of methanol, accounting for 30% of global demand. Alternative fuels are the second largest product, requiring 23% of global demand. Assuming regulators approve the project, it could be in service in two to three years, with capacity to produce 1.6 million tons/year of methanol.

Maine Natural Gas (MNG) continues to move ahead with its plans for a natural gas distribution system in Augusta, ME, but its bid to provide gas to schools and other municipal buildings is off the table, according to the Iberdrola USA subsidiary. In an open letter to the Augusta city council, MNG said it was withdrawing its bid to provide gas to city property, and accused the council of violating city rules and giving competitor Summit Natural Gas of Maine an unfair competitive advantage by posting online details of bids for the project. However, posting the bids was not a violation of the rules and was a matter of public interest, City Manager William Bridgeo told the Kennebec Journal. MNG and Summit have been racing to bring natural gas to the area for some time. The dispute has taken the two companies before a special state appeal panel and Kennebec County Superior Court (see NGI, Oct. 22, 2012). The state recently adopted an omnibus energy bill (LD 1442) that would increase the state's gas pipeline capacity. The bill, which was adopted in June by both the Maine House and Senate, was vetoed by Gov. Paul LePage, but legislators overruled that veto.

Snake River Oil and Gas, a partner of Alta Mesa Holdings, has begun drilling two natural gas wells in western Idaho and is seeking permits to construct a 10-mile gas pipeline that would connect new and existing wells to a pipeline connecting a power plant near New Plymouth, ID. Snake River and Alta Mesa have sold more than 100,000 acres of gas leases in the area, according to the Idaho Petroleum Council. Although generating some excitement, the overall play is still small, with 11 wells drilled to date, according to Snake River spokesperson. In June, the Idaho Department of Lands approved two separate permits for Alta Mesa Services to drill in the area where three years ago Bridge Resources discovered gas and condensate.

EQT Midstream Partners LP agreed to pay up to $650 million for Appalachian-focused Sunrise Partners LP and a new transportation agreement from parent EQT Corp., which now operates a 700-mile, regulated interstate pipeline system and more than 2,000 miles of low-pressure gathering lines. The Sunrise purchase would add 41.5 miles of 24-inch diameter pipeline that parallels and interconnects with a segment of the partnership's transmission and storage system that runs through Wetzel County, WV, to Greene County, PA. It also includes the expanding Jefferson compressor station in Greene County and an interconnect with Texas Eastern pipeline. Sunrise has existing throughput capacity of about 400 billion Btu/d, all subscribed under firm transmission contracts.

Atlas Pipeline Partners LP plans to build a 200 MMcf/d cryogenic processing plant to accommodate growing gas production in the Permian Basin, which would be anchored by output from Pioneer Natural Resources Inc. The Edward plant is to have initial capacity of 100 MMcf/d with service in the second half of 2014. As output increases, Atlas would add more compression and refrigeration equipment to increase capacity to 200 MMcf/d as needed. Once completed, processing capacity would increase on the Atlas WestTX system to 655 MMcf/d from 455 MMcf/d, expanding further beyond the 200 MMcf/d Driver plant addition that began service in April.

The Ohio Department of Natural Resources (ODNR) has unveiled a series of new application requirements for unitization requests, making them more detailed than they were before. The application now contains 15 requirements, including an affidavit that provides a detailed account of attempts to secure unleased properties, including the dates the attempts were made and who was contacted. Once applications are received, ODNR's Division of Oil and Gas Resources Management (DOGRM) would review them for completeness and schedule hearings within 45 days of receipt. Requests for a continuance for a hearing are required within 14 days before a hearing date. Hearings also may be rescheduled or canceled by regulators. ODNR spokesman Mark Bruce told NGI that the DOGRM has received 12 applications for unitizations since February 2012.

EQT Gathering LLC has filed an application with the Federal Energy Regulatory Commission to build and operate the Derry Compressor Station in Westmoreland, PA, and other compression facilities to move natural gas from the Marcellus Shale to interstate markets. The facilities would consist of a compressor station with three compressor engines totaling 14,205 hp. Initially, the facilities would receive locally produced pipeline-quality unprocessed gas from the partnership's Three Rivers gathering system in Pennsylvania, then discharge the gas via a 200-foot line into the Texas Eastern Transmission LP system. The EQT Corp. unit said it anticipates that the Derry facilities eventually may receive locally produced gas from other EQT facilities. It asked for action on the application by Nov. 15.

Houston-based Memorial Production Partners LP (MEMP) agreed to pay $606 million to sponsor Memorial Resource Development LLC and affiliates of Natural Gas Partners for properties in the Permian Basin, East Texas and the Rockies. The properties consist of 973 gross (648.6 net) wells on 363,000 gross (136,000 net) acres in Texas, New Mexico, Wyoming and Colorado. MEMP would operate 94% of total proved reserves and 74% of the producing wells. It also is buying about 275 Bcfe of proved reserves, with about 48% in the Permian Basin, 31% in East Texas and 21% in the Rockies. The acquisition would increase MEMP's proved reserves by 36% to more than 1 Tcfe and average daily production for May by 42% to about 152 MMcfe/d.

Average unit operating costs to produce natural gas and oil in the deepwater Gulf of Mexico jumped by about 45% between 2010 and 2012, but at less than $5.00/boe, the region still provides "highly attractive" netbacks, according to Ziff Energy Group. The cost increases resulted from a combination of operating expenditure (opex) increases and to a lesser extent, declines in production, according to Ziff's ninth GOM Deepwater Improving Field Performance study. Ziff evaluated 24 deepwater producing assets owned by six operators that included Chevron Corp., Royal Dutch Shell plc, Anadarko Petroleum Corp. and Murphy Oil Corp. The six operators collectively accounted for about 736,000 boe/d of deepwater GOM production and $887 million in opex.

The Cardamon field in the deepwater Gulf of Mexico, whose discovery well in 2010 set records for subsea length and depth, is ready to connect with the Auger tension-leg platform, a unit of Royal Dutch Shell plc said. Cardamon, in Garden Banks Block 427 about 225 miles southwest of New Orleans, was sanctioned in 2011, with first production expected in 2014. To accommodate the field, Auger is being shuttered for a retrofit with a restart by the end of the year. Once the retrofit is completed and the field ramps up, Cardamom would be able to nearly double the platform's current 55,000 boe/d output, with a peak production rate of 50,000 boe/d.

Forest Oil Corp. is marketing its Texas Panhandle oil and gas assets, which may garner $1 billion or more. The assets are concentrated in Lipscomb, Roberts, Hemphill and Wheeler counties and target the Granite Wash, Cleveland-Tonkawa and Missourian Wash (Hogshooter). The company is running a two-rig program in the play. At the end of the first quarter, production in the area was about 100 MMcfe/d (50% liquids) and reserves were estimated at about 520 Bcfe, according to Wells Fargo Securities.

Halliburton Co. is teaming up with Nuverra Environmental Solutions Inc. in the Bakken Shale to advance a produced water recycling project for unconventional drillers. To date, Halliburton has completed more than 60 wells and 280 fracturing stages in the Permian Basin and Bakken using its H20 Forward Service, which reduces the amount of fresh water required in the stimulation process. Nuverra is to provide logistics, transportation, storage and overall fluid management under the joint venture.

The U.S. Air Force (USAF) is considering leasing land on Vandenberg Air Force Base in California for offshore oil and natural gas extraction. If approved, companies would be allowed to extract offshore oil and gas along central California coast with onshore extended reach slant drilling technology. Over the next few months, USAF will determine if energy development is "economically, environmentally and politically feasible." Under federal law, the military may lease land for oil development. Vandenberg has five active oil wells, with drilling activity since 1941.

ExxonMobil Corp. said it is interested in helping Ukraine develop its energy reserves, and estimates the onshore and offshore gas resources could produce 45 billion cubic meters (bcm) (1.59 Tcf) by 2020. ExxonMobil European exploration director Kevin Biddle said in an interview the company would invest $325 million initially if both sides sign a production sharing agreement. ExxonMobil's investment in Ukraine could grow to billions of dollars, should the company discover oil and gas, he said.

The skyline of Midland, TX (pop. 114,000) has a long way to go before it rivals those of Houston or Dallas, but the rebirth of the Permian Basin has sparked plans to develop what would be the sixth-tallest building in the state. Energy Tower at City Center would have 58 stories and open in 2015 if developer Energy Related Properties and architect Michael Edmonds succeed with their plans. "Economic activity is very strong in the Permian Basin -- it's a 'shale gale' of economic activity. The area is one of the fastest growing in the country and appears to be poised to continue growing as folks from all over the state, from Houston and even Austin, come here to work in the oil and gas industry," said Texas economist Ray Perryman, founder of economic analysis firm The Perryman Group.

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