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Industry Briefs

The Federal Energy Regulatory Commission (FERC) has approved a plan by National Fuel Gas Supply Corp. to relocate and increase the capacity of its Line N pipeline, which runs north from an interconnection with Texas Eastern Transmission in Greene County, PA, through Washington, Allegheny, Beaver, and Lawrence counties, and terminates near Slippery Rock in Butler County, PA. National Fuel will relocate parts of the 20-inch diameter line that have been subject to repeated disruptions by subsidence caused by long-wall coal mining in the area. The project calls for the replacement of about 30 miles of pipeline and the installation of a new 4,740 hp compressor station, which will boost capacity on the line running through prime Marcellus Shale territory. National Fuel said it has a precedent agreement with a producer for 150,000 Dth/d of firm transportation through the line. FERC also approved the company's plan to leave the deactivated sections of Line N in place, since they could be needed in the future once mining operations are concluded to handle increased Marcellus production expected in the area.

Gastar Exploration Ltd. has completed a $29.1 million purchase in the Marcellus Shale, which adds 62,000 net acres of leasehold concentrated in Preston, Tucker and Pendleton counties, WV. The purchase included 17,000 net acres held by production, a gathering system comprised of 41 miles of six-inch diameter steel pipeline, a salt water disposal well and five conventional wells producing 500 Mcf/d gross. Gastar said it now holds about 80,000 net acres in the Marcellus. The Houston producer plans to drill two horizontal wells in the shale play in 2011.

EOG Resources Inc. and Newfield Exploration Co. have agreed to terminate a sale by EOG of some of its Marcellus Shale acreage. Newfield in November agreed to pay EOG $405 million to buy 50,000 net acres that are mostly in Pennsylvania's Bradford County (see Daily GPI, Nov. 17). The transaction was to close by the end of the year. The companies offered no reason for canceling the agreement.

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