NGI The Weekly Gas Market Report / NGI All News Access

Industry Briefs

Spectra Energy subsidiary Texas Eastern Transmission LP opened a nonbinding open season for its proposed Texas Eastern Appalachia to Market (TEAM) expansion to transport emerging Appalachian gas production to markets, including those in the Mid-Atlantic and New England states (see related story). The TEAM expansion program has a targeted capacity of approximately 300 MMcf/d but will be scalable and sized to meet customer needs, the company said. The first phase is scheduled to be in service as early as November 2011. TEAM would provide shippers with the opportunity to design transportation services from multiple existing and proposed receipt points on the Texas Eastern system within the Appalachian production region in West Virginia, Ohio and Pennsylvania that span Texas Eastern's M-2 and M-3 market zones to delivery points across Texas Eastern's market area including Lambertville, NJ; the Steckman Ridge Storage project in Bedford, PA; near Transco Station 195 in York County, PA; Dominion Transmission at Chambersburg, PA; and Columbia Gas Transmission near Eagle, PA. The project is expected to have more than 30 interconnects. The project would allow producers to connect Appalachian supplies to premium markets and shippers to reach back to supply points in the West Virginia and Pennsylvania regions, the company said. The open season runs until Aug. 29. Interested parties should contact Bob Riga at (617) 560-1436 or, or Sean Foley at (617) 560-1359 or

A natural gas pipeline to move production from the emerging Haynesville Shale in northwestern Louisiana beginning in late 2009 has been proposed by DCP Midstream Partners and M2 Midstream LLC (Momentum). As an extension of DCP's Pelico Intrastate Pipeline, the Haynesville Connector would originate in western De Soto Parish, LA, and extend more than 150 miles to Delhi, LA, with access to several takeaway pipes (see related story). No pipeline infrastructure or financial details were disclosed. If it is built, the joint venture partners estimated that the Haynesville Connector could begin initial deliveries in the third quarter of 2009 and offer an estimated 1.5 Bcf/d of takeaway capacity by early 2010 (see related story). The joint venture remains subject to definitive agreements and approvals, the companies said. Momentum and DCP have been working on the pipeline proposal "for several months in order to provide Haynesville Shale producers with access to a long-term takeaway solution on an accelerated timeline," said Momentum CEO Frank Tsuru. DCP Midstream Partners is owned by DCP Midstream LLC, a joint venture of Spectra Energy and ConocoPhillips. Momentum, based in Houston, owns and operates the M2 Fairplay gathering system in East Texas and the State Line gathering system in De Soto Parish. Information about the Haynesville Connector is available from DCP's Brian Frederick at (713) 735-3667 or Momentum's George Francisco at (713) 783-3000.

National Fuel Gas Supply Corp. (Supply), the pipeline and storage segment of National Fuel Gas Co., is conducting an open season until Sept. 12 for capacity in the Appalachian corridor in southwestern and central Pennsylvania that will provide transportation and storage services to Northeast market interconnects including Ellisburg, Leidy and Corning. The proposed Appalachian Lateral will provide interstate pipeline infrastructure to move gas supplies produced from the Marcellus Shale and other Appalachian producing horizons to growing Northeast markets. Shippers may also access incremental storage capacity of 8.5 Bcf via Supply's planned expansion of certain of its existing fields. The storage capacity will be offered in a complementary open season in the near future. The scope and size of the Appalachian Lateral will be determined after the close of the open season. It could run up to about 350 miles through the Marcellus Shale fairway to connections with existing facilities. The Appalachian Lateral may serve as a complement to Supply's previously announced West-to-East project, which is designed to move Rockies Express gas supply from Ohio to the Northeast. Results from a 2007 open season for the West-to-East project were robust and market interest remains strong for new facilities to be built in this region where exploration and production activity, particularly in the Marcellus Shale, is increasing, the company said. Additional information is available at or by calling National Fuel's interstate marketing department at (716) 857-7740. The open season will close at 11 a.m. EDT on Sept. 12.

Volatile fuel prices and economic uncertainty weren't enough to keep Duke Energy's core operations from performing well, the company said in reporting 2Q2008 adjusted diluted earnings of 27 cents/share, up from 24 cents in 2Q2007. The quarterly results reflected strong performances by Duke's three largest segments, partially offset by a $113 million charge related to impairments recorded by the company's former land management and development wing, Crescent Resources. Duke sold a 49% stake in Crescent to Morgan Stanley Real Estate for $1.4 billion in 2006. Duke retained a 49% stake in the Charlotte, NC-based real estate company. Duke's U.S. Franchised Electric and Gas (USFE&G) unit reported 2Q2008 earnings before interest and taxes (EBIT) of $503 million, compared with $452 million in 2Q2007. The increase was due primarily to the conclusion in the third quarter of 2007 of North Carolina clean air amortization, the substantial completion of rate credits in 2007 related to Duke's merger with Cinergy Corp. and higher Allowance for Funds Used During Construction, including the impact of a favorable regulatory ruling in Indiana. USFE&G also benefited from higher rates in the Midwest, primarily a result of recovery of qualifying pollution control costs in Indiana, Duke said. Duke's Commercial Power segment, which buys and sells electricity on the wholesale market, reported 2Q2008 EBIT of $235 million, compared to $64 million in 2Q2007. Commercial Power results increased primarily because of higher mark-to-market gains due to economic hedges, gains on the sale of emission allowances, lower purchase accounting expenses and improved operations. During the quarter Duke acquired Catamount Energy Corp. from funds affiliated with Diamond Castle Holdings LLC for approximately $240 million, significantly increasing its wind energy operations and announced a $100 million plan to install solar panels at up to 850 North Carolina sites.

Tennessee Gas Pipeline Co.'s recent open season for its 300 Line Expansion Project resulted in a binding precedent agreement for a 15-year term from Equitable Energy LLC, a subsidiary of Equitable Energy, which was awarded all of the project's 300,000 Dth/d (see related story). The project links Equitable's Appalachian production to northeast markets. The expansion facilities will consist of approximately 125 miles of 30-inch pipe loop and approximately 46,000 hp of additional compression facilities to be constructed in Tennessee's existing pipeline corridor in Pennsylvania and New Jersey. Tennessee, a wholly owned subsidiary of El Paso Corp., has entered into a fixed price agreement to lock in its pipe costs. Tennessee plans to file its certificate application with the FERC during the second quarter of 2009, with phased construction anticipated during 2010 and 2011.

A combination of rising natural gas prices, the stumbling residential housing market and general economic weakness has led to above-average increases in past-due payments at many local distribution companies (LDC), particularly in the eastern United States, according to Moody's Investors Service. That may be ominous news for the 2008-2009 heating season, which begins in October, but LDCs appear well positioned to handle the rising stress. In a Moody's survey of 31 LDCs, all respondents reported adequate liquidity and gas supply through the last heating season. Only two LDCs reported requests for credit line increases and two others had to renew credit facilities. Things could get tougher for LDCs if regulators slow the rate of recovery of bad debt expense, Moody's said. Of the 31 LDCs responding to the survey, 21 of them -- most operating in the East -- reported an increase in late payments last winter. The average increase of past-due receivables was 9% last winter, Moody's said. Almost all respondents have some version of a pass-through mechanism for bad debt expenses in their rate designs.

The U.S. Coast Guard and Maritime Administration (MARAD) have completed the final environmental impact statement (FEIS) for a liquefied natural gas (LNG) terminal offshore Alabama in the Gulf of Mexico proposed by the Norwegian-based firm TORP Terminal LP. The agencies have scheduled a public hearing on the measure for Aug. 26 in Mobile. The notice of the FEIS for TORP's proposal to build a deepwater liquefied natural gas (LNG) terminal was published in the Federal Register. Public comments on the FEIS and application are due by Sept. 22 (45 days after the notice); and federal and state agencies' comments, recommended conditions for licensing, or letters of no objection are due by Oct. 10 (45 days after the final public hearing). MARAD is required to issue a record of decision accepting or denying the application to build the proposed Bienville Offshore Energy Terminal by Nov. 24. The $400 million Bienville Offshore project calls for a combined offshore receiving and regasification station 63 miles south of Mobile Point, AL, that would allow any LNG ship to offload. It would be located in the federal Outer Continental Shelf waters on Main Pass Block 258 south of Mobile Point in a water depth of approximately 425 feet. The deepwater port would be capable of mooring two LNG carriers and processing an average of 1.2 Bcf/d. The regasified LNG would be sent through a new 30-inch undersea pipe to a support platform connected to four existing pipelines. No new onshore pipelines or LNG storage facilities are proposed. With a 30-month construction timetable the sponsors project the start-up of commercial operations in 2011, should a license be issued. The port would have an operating life of approximately 25 years. The four interconnecting pipelines include the Dauphin Island Gathering System Feedline, the Transcontinental Gas Pipe Line Feedline, the Destin Pipeline Feedline and the Viosca Knoll Gathering System Feedline. Written comments should include the docket number USCG-2006-24644, and be mailed to the Department of Transportation, Docket Management Facility, 1200 New Jersey Av. SE, West Building, Room W12-140, Washington, DC 20590-0001. They can be faxed to (202) 493-2251 or sent electronically to For further information, contact Lt. Hannah Kim at (202) 372-1438.

Three environmental groups are suing the Department of Interior's Bureau of Land Management (BLM) for approving 25 natural gas wells on the West Tavaputs Plateau in central Utah. The lawsuit, filed in U.S. District Court in Salt Lake City by the Southern Utah Wilderness Alliance, the Nine Mile Canyon Coalition (NMCC) and The Wilderness Society, contends that the wells, approved for Bill Barrett Corp., should have received a more thorough review before they were approved. The U.S. Environmental Protection Agency in May voiced concerns about BLM's plan to allow drilling in the region until an environmental study was conducted detailing air quality impacts (see NGI, June 2). Barrett wants to drill gas wells on 138,000 acres in the West Tavaputs Plateau area in the northeast portion of Carbon County, UT. The long-term development includes drilling up to 807 new gas wells on 538 locations over a period of eight years. As each well has the potential to produce gas for up to 20 years, the life of the project could be around 28 years, BLM noted. The lawsuit contends that the increased drilling would have an adverse affect on Nine Mile Canyon, an archaeological discovery that is home to more than 10,000 known Ancient Puebloan rock-art images and ruins. BLM's Price, UT, office approved Barrett's drilling plan under a "categorical exclusion," which allows certain projects to proceed without a rigorous examination of potential environmental impacts, according to the lawsuit. Under the Energy Policy Act of 2005, one broad environmental impact statement (EIS) on one drilling application may serve as an EIS for all subsequent requests, the lawsuit contends. However, the lawsuit contends that BLM failed to properly analyze the harm that more traffic would do to the ancient rock art and other artifacts; failed to include the public in its decision; and failed to consult Native American tribes before approving the drilling plan.

A climate change activist group in the Pacific Northwest demonstrated against Northwest Natural Gas Co. for its support of a liquefied natural gas (LNG) facility and related pipeline as an offshoot of wider day-long demonstrations in Portland, OR, last Monday. At one point in the afternoon about a dozen demonstrators from Convergence for Climate Action occupied the Northwest Natural headquarters lobby in downtown Portland. The incident was peaceful and no one made any demands, a utility spokesperson told NGI. However, in a written announcement on the action the activist group said its demonstrators were demanding to talk with either CEO Mark Dodson or COO Gregg Kantor. The demonstrators were opposed to Northwest Natural's proposed joint venture 223-mile natural gas transmission pipeline, which would connect to the proposed NorthernStar Natural Gas Bradwood Landing LNG receiving terminal on the Oregon side of the Columbia River just east of where it flows into the Pacific Ocean (see related story). The pipeline is proposed to give Oregon a second interstate natural gas link and diversity of supply.

©Copyright 2008 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus