Singapore-based Pavilion Gas Pte Ltd., a unit of of Pavilion Energy, has secured a total of 0.4 million tons per year of liquefied natural gas (LNG) supply from BP plc for a tenure of 20 years beginning in 2019. Some of the LNG is to come from BP's stakes in Cheniere Energy Inc.'s Freeport LNG terminal in Texas. "This deal is part of our continued effort to enhance and diversify our LNG portfolio to deliver sustainable and competitive LNG supply to Asia," said Seah Moon Ming, CEO of Pavilion Energy and Pavilion Gas. Pavilion Energy Pte. Ltd., a US$806.5 million company, was established last year by Singapore's Temasek Holdings Pte. Ltd. with a focus on meeting Asia's growing energy demand, particularly through LNG (see Daily GPI, April 8, 2013). "Supply will be from BP's global portfolio of equity and merchant sources of LNG. This includes the Freeport LNG project in the USA, where BP holds tolling rights [see Daily GPI, Feb. 12, 2013] and which is expected to reach a final investment decision before the end of 2014," said BP's Paul Reed, CEO of the integrated supply and trading business.
Atco Energy Solutions Ltd. and Petrogas Energy Corp. plan to develop four salt caverns with the capacity to store 400,000 cubic meters of propane, butane and ethylene to serve the natural gas liquids market in Western Canada. The facility would be located at Atco's Heartland Energy Centre near Fort Saskatchewan and connected to Petrogas' existing hydrocarbon truck and rail terminal. "The Petrogas terminal is undergoing expansion to accommodate this storage initiative and provide additional throughput and distribution capacity," said Petrogas CEO Stan Owerko. "This project will support the movement of increasing volumes of Western Canadian LPG [liquefied petroleum gas] production to traditional North American markets as well as key international export markets through Petrogas' West Coast LPG export terminal at Ferndale, WA." Atco would build and operate the facility. Operation of the first two caverns is expected to begin during 2Q2016. Two additional caverns are expected to be completed by 2Q2017.
EnLink Midstream Partners LP and EnLink Midstream LLC have completed Phase II of the Cajun-Sibon natural gas liquids (NGL) expansion project in South Louisiana. Separately, the Bearkat natural gas processing plant and a portion of a rich gas gathering system in West Texas have also been completed. The expanded Cajun-Sibon system connects EnLink's Eunice fractionator in South Louisiana to Mont Belvieu, TX, supply pipelines. Cajun-Sibon pipeline capacity has been expanded by 50,000 b/d of raw-make NGL capacity to 120,000 b/d, and a 100,000 b/d fractionator has been added adjacent to the partnership's Plaquemine gas processing plant. The Bearkat plant in Glasscock County, TX, in the Permian Basin is complete, and a portion of the gas gathering system, which includes 30 miles of high-pressure pipeline that provides gas takeaway capacity for producers in Glasscock and Reagan counties in Texas also is completed. An additional 35-mile, high-pressure pipeline is being constructed.
The Pennsylvania Department of Environmental Protection (DEP) is investigating the spill of a sludgy drilling lubricant into a small creek in Washington County, PA. DEP spokesman John Poister said the agency believes the sludge is bentonite clay that accidentally sprayed into the creek during construction of a pipeline that will ship natural gas liquids to a Sunoco refinery in Philadelphia. The DEP does not yet know how much of the sludge leaked into the creek. The spill was discovered late last week and was contained by Sunday.
The Houston Advanced Research Center (HARC) has launched a virtual hydraulic fracturing website to demonstrate the latest advances in environmentally-friendly technologies used to develop oil and natural gas resources. The site, launched as a companion to HARC's virtual drilling rig, is free and available to the public at www.efdvirtualsite.org. It allows users to tour an unconventional site and click on objects to reveal videos, case studies and literature that show methods and tools to address various environmental issues. The program was funded by the Ground Water Protection Council.
The Alaska Industrial Development and Export Authority (AIDEA) has signed a concession agreement with project development firm MWH, marking a step forward for the Interior Energy Project. The agreement creates the legal framework for the ownership, development, financing, construction and operation of a liquefied natural gas (LNG) plant on Alaska's North Slope, and allows the parties to move forward on completing the final design of the plant and the financial structure of the project, based on a public-private partnership. AIDEA is to own the plant and MWH subsidiary Northern Lights Energy LLC is to build, operate and maintain the facility. Northern Lights would also have the right to sell LNG the plant produces. A gravel pad for the LNG plant was recently completed. The Interior Energy Project was introduced by Gov. Sean Parnell in the 2013 legislative session. The 28th Alaska Legislature advanced the project with the passage of SB 23, which contains a financing package that enables AIDEA and the private sector to partner in the construction of an LNG facility on Alaska's North Slope and a natural gas distribution system in Fairbanks and North Pole (see Daily GPI, Aug. 26, 2013; Jan. 17, 2013). A large-scale pipeline and liquefaction export to commercialize North Slope gas also is advancing (see Daily GPI, Sept. 19).
W&T Offshore Inc. has acquired a 35.7% working interest (WI) in the Fairway Field and associated Yellowhammer gas processing plant, giving it 100% WI in both assets. The adjusted purchase price at closing was $18.2 million, plus assumption of asset retirement obligations. The seller was not disclosed. The Fairway Field is in the shallow state waters of Mobile Bay, AL; the Yellowhammer plant is onshore in Alabama about 17 miles northwest of the field. Average gross production in July was 36.9 MMcf/d and 1,477 b/d of natural gas liquids. W&T's internal estimates of proved reserves associated with the acquired property are 27.3 Bcfe, of which 74% is natural gas. "Our original acquisition of a 64.3% interest in these two assets in August 2011 [from Shell Offshore Inc. (see Daily GPI, Aug. 12, 2011)] has provided a substantial return on our earlier investment," said CEO Tracy Krohn. "These quality, long-life properties continue to generate substantial cash flow and have identified upside potential. This transaction is expected to be immediately accretive on the basis of both cash flow and production metrics."
Pivotal LNG Inc., a unit of AGL Resources has struck a long-term agreement to sell liquefied natural gas (LNG) to Crowley Maritime Corp. subsidiary Carib Energy LLC for use by Carib's customers in Puerto Rico. The Federal Energy Regulatory Commission recently issued an order providing clarity to Pivotal regarding the use of non-pipeline transportation for delivery of LNG from the U.S. mainland to U.S. territories without becoming subject to Commission jurisdiction. The FERC order confirmed that Pivotal can sell LNG designated to be transported by waterborne vessel to all U.S. territories subject to the order's conditions. Pivotal said it will load LNG onto international shipping organization (ISO) containers to be transported via truck to Crowley's waterborne vessels in Jacksonville, FL, and then delivered to Carib's customers in Puerto Rico. The U.S. Department of Energy recently issued Carib non-free trade agreement export authorization for its terminal project on the Louisiana coast (see Daily GPI, Sept. 10).
The U.S. Department of Energy (DOE) published a notice in the Federal Register of the liquefied natural gas export application for the Alaska LNG Project, which begins a 60-day public comment period on the application. A week earlier the project's request for prefiling status was approved by the Federal Energy Regulatory Commission (see Daily GPI, Sept. 8). The project is intended to commercialize the state's long-stranded North Slope gas reserves, primarily through liquefaction and export to Asian markets (see Daily GPI, July 21). "I appreciate the quick action taken by FERC and DOE as we continue to make historic progress on Alaska's LNG Project, which has already created hundreds of jobs," said Gov. Sean Parnell. The project is currently in the pre-engineering and design phase, which is expected to be completed by 2016 and cost about $500 million. Alaska state officials met with LNG buyers and government agencies in Japan and South Korea earlier this month to educate them about the project and Alaska's natural gas resources. Alaska Natural Resources Commissioner Joe Balash signed a memorandum of cooperation in support of the project with Japan's Ministry of Economy, Trade and Industry.
Praxair Inc. has begun offering oil and gas producers a waterless system for use in hydraulic fracturing (fracking) operations. According to the Danbury, CT-based company, its DryFrac system blends liquid carbon dioxide (CO2) with proppant. Praxair said it can separate CO2 returned from the well, enabling faster natural gas production, adding that much of the CO2 is captured from industrial off-gas and purified.