FERC has given the go-ahead for Cheniere Creole Trail Pipeline to place into service much of its pipe system that will serve two liquefied natural gas (LNG) terminals in Louisiana. Creole Trail got approval to place Segment 1 (18 miles), Segment 2 (25 miles) and part of Segment 3 (about 36 miles) into operation, as well as an associated Texas Eastern Transmission lateral in Cameron, Calcasieu and Beauregard parishes. Approximately 50 miles of the Creole Trail Pipeline still needs to be completed. The pipeline would serve both Cheniere Energy's 4 Bcf/d Sabine Pass LNG terminal in Cameron Parish, which received its first tanker shipment and opened its doors in April, and Cheniere's Creole Trail LNG terminal that is targeted for in-service in 2009 (see NGI, April 28). In October 2007 FERC approved the merger of Creole Trail Pipeline and Sabine Pass Pipeline into a single line to serve the two LNG terminals in Cameron Parish. The merged pipeline system is to operate as an integrated 150.9-mile, 42-inch diameter system with a capacity of 2 Bcf/d.
A subsidiary of Anadarko Petroleum Corp. has agreed to be a foundation shipper for the proposed Bison Pipeline Project, which would carry Powder River Basin natural gas supplies out of the Rockies. Anadarko Energy Services Co. committed to 250 MMcf/d on the proposed project for 10 years. according to Northern Border Pipeline Co. Northern Border subsidiary Bison Pipeline LLC launched an open season for the proposed project in early April (see NGI, April 7). Plans call for a 24-inch diameter pipeline that would extend 289 miles from gathering facilities of Fort Union Gas Gathering LLC and Bighorn Gas Gathering LLC near Dead Horse, WY, to a terminus near Northern Border's Compressor Station No. 6 in Morton County, ND. Bison's initial capacity would be around 400 MMcf/d with maximum capacity of 660 MMcf/d. The pipe's projected in-service date is Nov. 15, 2010. Northern Border general manager Paul F. Miller said Anadarko's commitment "represents over 60% of the expected project capacity and is a milestone toward obtaining the necessary shipper support to advance the project."
AGL Resources' Virginia Natural Gas broke ground for its Hampton Roads Crossing (HRX) pipeline, which will connect its northern and southern pipeline systems for the first time by crossing the Hampton Roads harbor. HRX is to transport up to 100,000 D/th of additional gas into the Virginia Natural Gas distribution system to serve the growing Hampton Roads region. The project is expected to cost $123 million and be completed in late 2009.
Constellation Energy is selling its Fellon-McCord & Associates energy consulting and management subsidiary to the company's co-founder, Andrew R. "Drew" Fellon, splitting it from its Constellation NewEnergy retail natural gas sales unit, the company said last Thursday. The move comes five years after Constellation acquired the Kentucky-based retail marketer. As part of the agreement, Constellation Energy's Customer Supply Group unit and Fellon-McCord will maintain a strategic alliance, allowing the companies to meet the needs of current customers and pursue joint opportunities. Closing of the agreement is targeted for June 30. Fellon-McCord will maintain its headquarters in Louisville, KY, in its present location. The Constellation NewEnergy retail gas unit also will maintain its headquarters in Louisville, and coordinate commodity sales and risk management activities with Constellation Energy's gas marketing operations in Houston, Omaha, Waukesha, WI, and Baltimore. The unit will be led by Co-Chief Commercial Officers Kevin Watson and Bret Feller. It serves more than 14,000 commercial, industrial, and institutional facilities that annually consume more than 491 Bcf of natural gas. Constellation NewEnergy Gas is a division of Constellation Energy and a sister company to Constellation NewEnergy.
While there may be future rewards in terms of diversification of energy supply, energy security and environmental protection, the American taxpayer currently is paying a high price for development of the power generation fuels of the future, according to a recent report by the Energy Information Administration (EIA). Refined coal at $29.81/MWh, solar power at $24.34/MWh and wind power at $23.37/MWh racked up the highest per-unit federal subsidies in 2007, EIA estimated. The statistics were included in the report, "Federal Financial Interventions and Subsidies in Energy Markets 2007." Refined coal also received the highest federal subsidy for electric power in absolute terms, at roughly $2 billion; nuclear was next at $1.3 billion, but with a much lower unit cost at $1.59/MWh. Total subsidies to power transmission and distribution were $1.2 billion, while renewables claimed $1 billion. On the low end of the federal power subsidy scale but the high end of total power production were regular coal at a total of $854 million (44 cents/MWh) and natural gas and petroleum liquids at $227 million (25 cents/MWh). The top power producers in 2007 were regular coal at 1.9 trillion kWh, natural gas and petroleum liquids at nearly 1 trillion kWh and nuclear generation at 794 billion kWh. Hydroelectric power produced 258 billion kWh, refined coal 72 billion kWh, biomass and biofuels 40 billion kWh, wind 31 billion kWh, geothermal 15 billion kWh, municipal solid waste 9 billion kWh, landfill gas 6 billion kWh and solar 1 billion kWh.
Dallas-based EXCO Resources Inc. has approved a $123 million increase to its 2008 capital budget, which brings total capital spending for 2008 to $923 million. EXCO will allocate $90 million to explore its Haynesville Shale acreage in northwestern Louisiana. EXCO has more than 100,000 net acres in the Haynesville play, and it is planning to drill both horizontal and vertical wells and develop infrastructure to support future growth. Another $30 million will be used for additional drilling in the Vernon Field in Louisiana, $2 million will go for more drilling in its Cotton Valley acreage in Texas and about $1 million will be used for information technology initiatives. This revised 2008 capital spending budget is expected to be fully funded through internally generated funds.
Citing inflation, Michigan Gas Utilities Corp. (MGUC), a subsidiary of Integrys Energy Group, has applied for an overall increase of 5.8% in its natural gas rates. The increase, if approved, would result in a monthly increase of about $6 for the typical residential customer using 92 Mcf of gas a year, MGUC said. Additionally, the Monroe, MI-based utility asked for a 4.4% interim increase, subject to refund, while the Michigan Public Service Commission considers the overall request. The commodity cost of natural gas is not affected by the rate request. "Due to inflation, our costs have risen over the past five years, so we need this increase to recover those increased costs," said MGUC President Gary Erickson. "We are sensitive to our customers' frustration at rising energy costs and we have tried to hold our request to a minimum. For example, all MGUC employees are now bearing more of the cost of employee benefits." MGUC serves about 165,000 customers in Lower Michigan.
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