Canaport LNG LP, the partnership of Repsol YPF and Irving Oil, plans to construct a third 160,000 cubic meter liquefied natural gas (LNG) storage tank alongside its two existing tanks in St. John, NB. The Canaport LNG project, including procurement, engineering and construction, is 46% complete and scheduled to be in operation in late 2008. The third LNG tank was originally approved by the provincial and federal governments under the environmental impact assessment completed on the project in August 2004 and will meet or exceed all international and Canadian standards for safety, the company said. Like the two existing full-containment tanks currently under construction, the third tank will consist of an inner tank made of high-performance 9% nickel steel and an outer tank made of advanced concrete. At commissioning, the terminal will have a sendout capacity of 1 Bcf/d with a peak capacity of 1.2 Bcf/d and could be expanded to 2 Bcf/d.

Gateway Energy Corp. bought offshore pipelines from Gulfshore Midstream Pipelines Ltd. extending from the western and central Gulf of Mexico (GOM) in water depths of 50-650 feet and currently gathering about 60,000 Mcf/d of gas from 56 wells. The pipelines range from six to 16 inches in diameter. Gateway paid $3.1 million cash, 1,550,000 shares of its common stock and assumed about $300,000 in liabilities. "This acquisition nearly doubles our offshore pipeline network and expands our footprint from Galveston, TX, to New Orleans, LA, making us a major gatherer in the Gulf of Mexico," said Gateway CEO Robert Panico. "These pipeline systems are located in prolific areas of the Gulf with proven production operated by major producers. There have been numerous leases acquired around these assets, which we anticipate will lead to continued drilling activity.

An estimated 28.5 million acres of land in federal waters offshore Louisiana, Mississippi and Alabama will be offered for lease in October as the Minerals Management Service (MMS) holds the first Central Gulf of Mexico sale in its 2007-2012 Outer Continental Shelf (OCS) leasing program. MMS said it projects that the oil and natural gas lease sale could result in production of 0.776 to 1.292 billion barrels of oil and 3.236 to 5.229 Tcf of gas. Lease Sale 205 includes about 5,000 unleased blocks located in the newly configured Central Gulf of Mexico OCS Planning Area in areas ranging from three to about 224 miles offshore, according to the agency. Water depths range from about 12 feet to more than 11,200 feet. The public reading of the bids received for the sale will take place on Oct. 3 at the Sheraton New Orleans Hotel. The final notice of sale, which contains the full terms and conditions for the sale and new official leasing maps, is available on the MMS website at http://www.gomr.mms.gov.

Chevron Keystone Gas Storage LLC, a subsidiary of Chevron Corp., is holding a nonbinding open season through Sept. 14 for 3 Bcf of capacity at its natural gas storage facility located near Kermit, TX. Keystone's current working gas capacity is 5 Bcf, with withdrawal capability of 400 MMcf/d and injection capability of 160 MMcf/d. A proposed expansion of its facility is expected to increase working gas capacity to 8 Bcf and injection capability to 200 MMcf/d, the Bellaire, TX-based storage provider said. Located in the Permian Basin production region, Keystone is a high deliverability salt cavern gas storage facility that connects to the El Pas Natural Gas, Transwestern and Northern Natural Gas pipelines. Interested parties should contact Anne Fiedler at (713) 432-2459 or at afiedler@chevron.com to obtain a bid package.

The Nevada Public Utilities Commission (PUC) is planning to hold a half-day workshop on natural gas issues, probably in October, according to a PUC spokesperson. It most likely will be held in Las Vegas or in Reno/Carson City at the headquarters of the three-member regulatory panel. PUC Chair Jo Ann Kelly is concerned about what the wholesale gas market for Nevada is going to look like after 2010. "She has some concerns that because of transmission pipeline constraints and deliveries [from the Rockies] moving easterly rather than to the west that the state could be in some level of discomfort," said a PUC spokesperson. Kelly wants to get some of the policy makers in the utility companies and some of the suppliers together just to discuss what the gas situation in the region, and more particularly the state, is going to look like in the long term. Nevada's two principal interstate sources of gas supplies come from Kern River Gas Transmission and Northwest Pipeline. Although it was reported that potential supplies from the proposed (and under construction) liquefied natural gas terminals on the West Coast also were going to be part of the discussions, the PUC spokesperson downplayed that part of the West's future gas mix.

The Second Circuit Court of Appeals has reversed an earlier lower court decision that had favored Merrill Lynch & Co. Inc. in its dispute with Allegheny Energy Inc. over the 2001 sale of Merrill's energy commodities trading unit to Allegheny, remanding the case back to the district court for reconsideration. "We are very pleased with today's [Friday's] ruling, which reinstates our claims against Merrill Lynch for fraud and breach of warranty," said Allegheny Chairman Paul J. Evanson. "We look forward to pursuing our case against Merrill Lynch in a new trial." The lower court judgment had ordered Allegheny to pay Merrill Lynch $115 million for the investment firm's remaining 2% interest in the Global Energy Marketing (GEM) operation and dismissed Allegheny's charges of fraud in Merrill's sale of the trading unit to Allegheny for $490 million, plus the 2% equity stake. Allegheny claimed Merrill had made false and misleading representations about the property prior to the sale. Allegheny also said GEM may have been involved with sham trading with Enron Corp. Greensburg, PA-based Allegheny purchased the energy commodities trading unit from Merrill in January of 2001. In December 2001 came the Enron bankruptcy, which started a house of cards collapse in the merchant energy trading business.

The Georgia Public Service Commission (PSC) Tuesday approved a settlement proposal that removes a stumbling block from Georgia Power's plans to build a 19-mile natural gas pipeline through the suburban metropolitan area just west of Atlanta. Under terms of the agreement, Georgia Power will pay the city of East Point $128,000 for pipeline inspections and maintenance and to train municipal employees to respond to pipeline emergencies. In return, East Point agreed to end its legal opposition to the 30-inch diameter pipeline. The pipeline will connect an interstate pipeline near Union City to gas-powered electricity generators planned at Georgia Power's Plant Jack McDonough near Smyrna. Georgia Power plans to run most of the pipeline beneath its own existing electric transmission lines. Plant Jack McDonough is currently composed of two coal-fired units totaling about 540 MW. Georgia Power has proposed the retirement of the coal-fired units and the construction of three gas-fired units of about 800 MW each. The company recently demolished a 1940s-era coal plant, Plant Atkinson, at the same site. Georgia Power said construction is expected to begin on the first gas unit in 2008 to go into service late in 2010. The total project should be completed by 2012.

EnCana Corp.'s Deep Panuke natural gas project off the coast of Nova Scotia is "not likely" to cause any adverse environmental effects and has been sent to federal regulators for a final ruling, Canada's environment minister said Wednesday. Canadian Minister of the Environment John Baird said the proposed gas development will be referred to the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB), the National Energy Board, Fisheries and Oceans Canada, Industry Canada and Transport Canada. EnCana requested a "time-out" adjournment of regulatory proceedings on the proposed C$700 million-plus project in early 2003 saying it wanted to reassess the market for the project. Following an extensive internal study, EnCana revised its plans and reduced its production estimates by 25%. The plan envisioned production of 300 MMcf/d instead of the original estimate of 400 MMcf/d. Four months ago the CNSOPB, which was conducting its review in conjunction with the environmental agency, recommended tentative approval of EnCana's revised plan for Deep Panuke, which is located about 45 kilometers west-southwest of Sable Island and about 250 kilometers southeast of Halifax. EnCana's main project components would include a jack-up mobile offshore production unit, subsea flow lines and wells and an export pipeline. It would be the second offshore gas project in Nova Scotia waters following the Goldboro Sable Offshore Energy Project.

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