An affiliate of Oklahoma City-based Warwick Energy Group has agreed to buy R/C Sugarkane LLC from Riverstone/Carlyle Global Energy and Power Fund IV LP. R/C Sugarkane is a private upstream oil and gas company with nonoperated working interests made up of about 6,000 net acres in a core, liquids-rich window of the Eagle Ford Shale, and with about 3,000 boe/d of net daily production. ConocoPhillips acts as operator on nearly all of the acreage. Warwick CEO Katherine Richard said the acquisition "is part and parcel to our core strategy of acquiring, consolidating and developing longlived U.S. gas reserves, primarily in unconventional reservoirs." The deal is expected to close in early May. Investment funds managed by Warwick own interests in more than 5,000 wells in 13 states focused on onshore U.S. gas and oil acquisition, exploration and production.
Azure Midstream Energy LLC has begun operations at the Fairway gas processing plant in San Augustine County, TX, serving production from the James Lime formation in the Haynesville Shale area in East Texas. Dry gas exiting the plant will travel on Azure's East Texas gathering system for delivery into interconnections with Gulf South's 42-inch diameter pipeline, CenterPoint Energy Gas Transmission's 42-inch diameter line near Carthage, Gulf South's 30-inch diameter pipeline at Milam, and Azure's interconnection with the facilities of Natural Gas Pipeline Company of America in Nacogdoches County, TX. Natural gas liquids recovered by the Fairway plant will be trucked to fractionation facilities in East Texas, South Louisiana, or Mont Belvieu, TX.
Chevron Phillips Chemical Co. LP broke ground this week for its U.S. Gulf Coast (USGC) petrochemicals project at the Cedar Bayou plant in Baytown, TX. The project includes a 1.5 million metric ton/year (3.3 billion pounds/year) ethane cracker to be built at Cedar Bayou and two 500,000 metric ton/year (1.1 billion pounds/year) capacity polyethylene facilities to be built in Old Ocean, TX (see Daily GPI, Aug. 16, 2013). The engineering, procurement and construction (EPC) phase of the ethane cracker project will be executed through a joint venture of JGC (USA) Inc. and Fluor Enterprises Inc. Gulf Coast Partners, a partnership of Technip USA Inc. and Zachry Industrial Inc., will execute EPC for the two new polyethylene facilities, for which groundbreaking is scheduled June 17.
During the recent Gastech Conference in Seoul, South Korea, GAIL (India) Ltd. said it had signed a memorandum of understanding with Japan's Chubu Electric Power Co. Inc. GAIL and Chubu intend to explore possibilities for collaboration in joint liquefied natural gas (LNG) procurement. The companies said they will also seek to collaborate on shipping optimization. Chubu and GAIL are large LNG importers and said they have "considerable synergy" between their LNG business profiles. "It is assessed that with GAIL joining hands with Chubu for jointly pursuing LNG procurement and other allied business opportunities, such a collaboration shall augment GAIL's efforts to aggressively source LNG volumes on competitive terms and would be a win-win proposition for both companies," GAIL said. The move is aligned with the company's efforts to establish Asia LNG Forum, which is intended to be an LNG buyers' club. GAIL also is working to establish a regional trading hub for LNG in Asia as well as a Asian gas price index.
Magellan Midstream Partners LP plans to construct a condensate splitter at its terminal in Corpus Christi, TX, under a fee-based, take-or-pay agreement with Trafigura AG. The project includes construction of more than one million bbl of storage, dock improvements and two additional truck rack bays at Magellan's terminal as well as pipeline connectivity between Magellan's terminal and Trafigura AG's nearby facility. The splitter will be capable of processing 50,000 b/d of condensate, fully supported by a long-term commitment from Trafigura AG. If warranted by additional demand, Magellan said it could construct an additional 50,000 b/d splitter at the facility. The facilities are expected to cost $250 million and to be operational during the second half of 2016. "Our Corpus Christi terminal is ideally situated to receive condensate from the Eagle Ford Shale, including shipments via our Double Eagle pipeline joint venture, and to offer flexible services and a variety of market options for our customer," said Magellan CEO Michael Mears.
Dominion Resources Inc.expects to raise close to $400 million from spinning off its natural gas infrastructure assets into a master limited partnership (MLP) dubbed Dominion Midstream Partners LP. The proposed spinoff was announced in September and would include the Cove Point liquefied natural gas import terminal, which now has conditional approval to export to gas worldwide (see Daily GPI, Sept. 13, 2013). The partnership would also include a stake in Blue Racer Midstream LLC, which Dominion shares with a Williams unit to carry Appalachian liquids to Gulf Coast and East Coast markets. In addition, the MLP would own Dominion Transmission, East Ohio Gas and a 24% interest in the Iroquois Pipeline (see Shale Daily, Sept. 13, 2013). The timing of the spinoff and the amount of shares to be offered hasn't been revealed. If approved, the MLP would trade on the New York Stock Exchange under "DM." Dominion Resources would remain the majority unit holder.
The U.S. Department of Interior's Office of Natural Resources Revenue (ONRR) has fined Roswell, NM-based Yeso Energy Inc. $227,584 for failure to submit production reports for its wells in New Mexico. Yeso was served with a notice of noncompliance by the federal agency in October 2011 for failure to submit reports on certain federal oil/natural gas leases it holds in New Mexico. "Despite repeated contact by ONRR, Yeso still has not provided the production reports for the leases in question," said an ONRR spokesperson, noting that the civil penalty will continue to accrue until the agency receives the required forms from the company. The federal government requires timely and accurate production reports to make sure the government is getting its proper royalties from energy production occurring on federal and American Indian lands, said ONRR Director Greg Gould.
GDF Suezhas struck an agreement to deliver 800,000 tons per year of liquefied natural gas (LNG) to Taiwan’s state-owned oil and gas company, CPC Corp., from the Cameron LNG terminal in Cameron Parish, LA. The deliveries are to be for a 20-year period starting in 2018. GDF Suez is a partner in the export project along with Sempra Energy, Mitsubishi and Mitsui. They have received conditional approval from the U.S. Department of Energy for export to non-free trade agreement countries (see Daily GPI, Feb. 11) and partial approval from the Federal Energy Regulatory Commission for facilities construction (see Daily GPI, Jan. 10). Sempra has said the project is on track for completion in 2018 (see Daily GPI, March 5). GDF Suez wants to "deepen its role" in the Asia-Pacific region, the company said. GDF Suez is the main LNG importer in Europe and has the third largest LNG supply portfolio in the world, supplied from six different countries, and representing 16 million tons per year. It controls a fleet of 14 LNG carriers under mid- and long-term charters.