Iberdrola Renewables' U.S. energy business, PPM Energy, announced that its subsidiary, Enstor Inc., completed the acquisition of ownership interests in the Freebird Gas Storage facility in Lamar County, AL from Houston-based Multifuels LP and Denham Capital. The transaction is valued at $164 million subject to adjustments. RBC Capital Markets advised on the sale. The natural gas storage facility has an existing working capacity of 7.6 Bcf with the potential to be expanded up to 11.4 Bcf. The Freebird facility is located on the Tennessee 500 line. The Northwest Alabama Gas District is a co-owner of the facility.
Omaha, NE-based storage developer Chestnut Ridge Storage LLC has filed an application at FERC to build the Junction Natural Gas Storage Facility near Uniontown in southwestern Pennsylvania and northern West Virginia. Chestnut Ridge Storage, which is owned by affiliates of Tenaska Power Fund of Omaha and eCorp LLC of Houston, is seeking authorization to drill up to 26 storage injection/withdrawal wells and 11 observation wells, as well as to construct a 17-mile pipeline, two 24-inch diameter interconnection laterals, two pipeline interconnections and a compressor station with an associated electric substation. The project would begin service in the first quarter of 2009, assuming FERC approval. A September nonbinding open season resulted in an expression of interest more than three times the project's potential for up to 25 Bcf of firm storage capacity, according to Chestnut Ridge Storage. The Junction storage facility would be converted from a nearly depleted natural gas reservoir into a multi-cycle, high-deliverability storage facility with projected injection and withdrawal capability of up to 500,000 Dth/d, the company said.
Fort Worth, TX-based Quicksilver Resources Inc. plans to pump up its natural gas-heavy production by 20% in 2008 by redirecting some of its spending in the Barnett Shale. The independent said it would increase its 2008 spending by about 9% over this year. The producer is allocating $650 million for drilling, $160 million for gathering and processing facilities, $70 million for leasehold expense and $5 million for property and equipment. Geographically, $790 million of the total amount is earmarked for Texas; $90 million will be directed to Canadian operations, and $5 million will be spent in Wyoming and Montana. Total capital expenditures include $35 million for exploratory drilling activities, primarily associated with the company's extensive leasehold in the Delaware Basin of West Texas and in Canada. Average daily production volumes for 2008 will be weighted 67% to natural gas, 30% to gas liquids and 3% to crude oil. Production volumes for 2008 are projected to average 255 MMcfe, which is 20% higher than output this year. After adjusting for asset sales, Quicksilver estimated production would jump more than 70% from the comparable 2007 projected level. Quicksilver sold all of its northeastern properties in Michigan, Indiana and Kentucky to BreitBurn Energy Partners LP effective Nov. 1. The properties represented average daily production of 75 MMcfe (see NGI, Sept. 17).
Houston-based Gulf United Energy is participating in a liquefied natural gas (LNG) regasification terminal project on Mexico's Yucatan Peninsula, the company said. Gulf United subsidiary Fermaca LNG de Cancun, S.A. de C.V., through its 50% interest in SIIT Energy, S.A. de C.V., has a stake in the 300-500 MMcf/d project. The terminal, which would be completed in 2011, would serve present and future power generation projects in the region as well as the local gas market, Gulf United said, which added that it is in discussion with potential LNG suppliers. The terminal project is expected to cost US$500 million. Gulf United said a "significant portion" of the financing has been secured with additional funds to come from a combination of equity and project-based debt financing. Gulf United also is involved in the development of a pipeline that could accommodate up to 500 MMcf/d, moving gas from the existing Mayacan pipeline, owned by Gas de France to serve power generation and industrial demand in the cities of Valladolid, Cancun and Nizuc until completion of the LNG regasification facility.
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