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Enbridge Energy Partners LP and Atmos Pipeline and Storage LLC are holding an open season through 5 p.m. CDT Sept. 17 to solicit firm transportation for Barnett Intrastate Gas (BIG) Pipeline, which, as proposed, would carry up to 1 Bcf/d and connect Atmos' Line X in Johnson County, TX, to Enbridge's Double D and Clarity pipes at Bethel, TX, in Anderson County. BIG Pipeline would bridge the two companies' systems and offer shippers access to gas supplies from the Waha, Barnett Shale, Bossier Sands and Anadarko Basin producing regions, they said. Delivery points would include market options at Enbridge's Carthage Hub in Panola County for Natural Gas Pipeline Company of America (NGPL), Texas Gas Transmission, Gulf South, Tennessee Gas Pipeline, CenterPoint and Texas Eastern Transmission. Delivery points also would be offered at Enbridge's Southeast Texas Hub in Orange County through NGPL, Kinder Morgan Tejas, Gulf South, Kinder Morgan Texas, Trunkline Gas, Florida Gas and Entergy. For information, contact Enbridge's Mark DeRusse at (713) 821-6195 or mark.derusse@enbridge.com; or Steve Marsh (713) 821-2084 or steve.marsh@enbridge.com; or Atmos' Vic DeVincenzo at (214) 206-2510 or vic.devincenzo@atmosenergy.com.

In an effort to pool Kansas natural gas gathering assets while also looking to produce gas within the state, Saxon Oil Co. Ltd.'s Central Kansas Gas Gathering (CKGG) subsidiary has signed a joint venture agreement with Mid Kansas Gas Gathering LLP (MKG) of Wichita, KS. The 50-50 joint venture, called Mid Kansas Gas Gathering JV (MKGG), will be headquartered in Wichita with American Energies Pipeline LLC acting as operator. According to the companies, the joint venture combines more than 400 miles of natural gas gathering systems and includes the purchase of a 10 MMcf/d processing plant to be located at a central processing and sales point along the combined systems. The companies announced that MKGG's primary purpose is to provide low-Btu natural gas producers in central Kansas with gathering, processing, treating and other natural gas services. The MKGG joint venture consists of CKGG's 230 miles of pipe and another 200 miles of pipe owned by MKG. MKGG's gathering systems are located in McPherson, Rice, Barton, Harvey, Kingman, McPherson, Pawnee and Reno counties. The largest system is approximately 125 miles of pipe that stretch east and west between Conway and Great Bend, KS, across McPherson, Rice and Barton counties, with secondary, perpendicular lines connecting to it. Another large system, consisting of approximately 48 miles of pipe and compression facilities, is located west of Great Bend, KS, in Pawnee County. In addition to the gathering systems, MKGG has acquired the previously mentioned gas processing plant, which is being upgraded to handle nitrogen and helium extraction and will be mobilized to Kansas later this year. Plant operations expected to commence in the first half of 2009. Saxon Oil, which bills itself as "a Tier One Texas-based Canadian company," is engaged in the acquisition, development and production of oil and natural gas reserves.

The Bureau of Land Management (BLM) has issued a proposed resource management plan (PRMP) and final environmental impact statement (FEIS) for the Pinedale, WY, field office to help direct planning for lands and resources in the state's natural gas-rich Sublette and Lincoln counties. The PRMP is "largely" based on BLM's Alternative 4 proposal in the draft EIS for the region, which BLM issued in February (see NGI, Feb. 25). BLM's Pinedale field office in western Wyoming administers around 922,880 acres of public surface land and 1.2 million acres of federal mineral estate. Under Alternative 4 about 758,180 acres of the area would be available for oil and gas leasing and development. In addition, 13,770 acres that include New Fork Potholes, Trapper's Point, East For River and several "sensitive cultural sites" would be withdrawn from leasing availability. The PRMP and FEIS documents are available at www.blm.gov/rmp/wy/pinedale/documents.html.

Forest Oil Corp. agreed to pay $892 million in cash and stock to privately held Cordillera Texas LP for a package of natural gas-weighted properties in Oklahoma, East Texas and North Louisiana that now produce around 34 MMcfe/d. Total reserves are estimated at 350 Bcfe, which are 36% proved developed. Additional net unrisked potential on the 118,000 gross acres is 1,200 Bcfe, with 1,500 additional vertical and horizontal drilling locations as well as 1,194 unbooked locations. Most of the properties are located in the Anadarko Basin's Granite Wash, Atoka and Morrow intervals in the Greater Buffalo Wallow area and in the Cotton Valley and Travis Peak intervals of East Texas. The East Texas and North Louisiana properties include James Lime, Haynesville Shale/Bossier and Pettet rights, the company said. The transaction is expected to close by the end of September. Denver-based Forest would pay Cordillera, headquartered in Englewood, CO, $708 million in cash and give Cordillera 3.5 million shares of common stock. Ultimately, Forest plans to pay for the deal by selling $500-600 million of noncore assets -- in addition to the $300-500 million of noncore assets it has on the market.

In what amounted to a largely symbolic gesture, the elected Santa Barbara County Board of Supervisors voted 3-2 to support a resumption of drilling off its Southern California coast. The board agreed to write to Gov. Arnold Schwarzenegger urging him to reverse the state's decades-long opposition to any additional drilling. Prior to the evening vote, the county officials held a day-long hearing in which speakers varied from those concluding that current global oil prices, $4/gallon gasoline at the pump and improved drilling technology supported a drilling resumption to old-line opponents fearful of a repeat of the disastrous 1969 spill that struck beaches southwest of the city of Santa Barbara. Elected officials and residents in the city tend to adamantly oppose drilling, while residents and elected officials in other parts of the county support it. Ultimately, the action is expected to have little impact on the long-standing ban because Schwarzenegger has consistently opposed a resumption of drilling. County support currently hinges on the swing vote of one of the five elected supervisors, Brooks Firestone, who previously opposed offshore drilling. A former state legislator who is not running for reelection on the county board this fall, Firestone gives proponents a 3-2 edge in any votes taken this year, but his likely successor is opposed to a drilling resumption, so early next year the county elected officials could once again reverse themselves. Schwarzenegger has not indicated how he is leaning right now, but for the past two years, he and the other two West Coast governors for Oregon and Washington states have jointly agreed to oppose any offshore drilling resumption.

A 36-inch diameter portion of the Oasis Pipeline System's Waha-to-Katy line at a remote location in Central Texas, between San Antonio and Austin, ruptured and an explosion damaged a compressor station early Thursday morning. The rupture and a release of natural gas occurred near the Prairie Lea Compressor Station, near Stairtown in Caldwell County, about 40 miles south of Austin, at about 7:45 a.m. CDT, said a spokesperson for the Railroad Commission of Texas (RRC). The line was immediately shut in and blocked off and, following a controlled burn, Energy Transfer declared the area safe, a company spokesperson said. An RRC inspector who was on site Thursday will issue a report on the cause of the rupture in 45 days. There were no injuries and no damage to nearby property. The Oasis Pipeline "was last inspected in August 2007 and no violations were cited," the RRC spokesperson said. A Bentek Energy analyst said the line had a 600 Mcf/d capacity and had been delivering 325-330 Mcf/d to interstate pipelines prior to the rupture. Supply distribution is not likely to be stopped, the analyst said, because gas could be shifted into Kinder Morgan's 170 MMcf/d Rancho Pipeline or others in the area. Oasis Pipeline, an Energy Transfer affiliate, said its Prairie Lea Compressor Station was shut down by a force majeure event and a formal notice will be forwarded to all affected shippers after an initial investigation of the incident. Normal operations will resume "as soon as possible," Oasis said. Oasis Pipeline is an intrastate natural gas pipeline that runs from the Permian Basin in West Texas to natural gas supply and market areas in southeast Texas.

FERC has approved Columbia Gas Transmission's proposal to expand its pipeline system in West Virginia to bring more locally produced Appalachian natural gas to market. The NiSource pipeline subsidiary proposes to expand the high-pressure side of its existing Appalachian pipeline system by constructing a new 9,470 hp compressor station and associated facilities on property located 11 miles outside of Hamlin in southwestern West Virginia. The proposed compressor station would connect to Columbia Gas Transmission's existing 16-inch diameter pipeline in the area. The $40 million project, known as the Appalachian Basin On-System Expansion Project, would benefit the area by significantly reducing current constraints to bring an additional 100,000 Dth/d of Appalachian gas to market, according to the Columbia pipeline.

Shippers have withdrawn their complaint accusing Columbia Gas Transmission of unilaterally trying to implement a new and revised master list of interconnection (MLI) points, a move that shippers said would have seriously impaired their ability to schedule primary firm transportation on Columbia's system. Shippers filed the withdrawal notice after Columbia asked FERC to withdraw its proposed tariff changes, which were at the center of the dispute. FERC in July directed its staff to convene a technical conference to resolve the issues in the complaint proceeding (see NGI, July 7). "During the technical conference [in early August], Columbia agreed that it would withdraw its tariff filing...without prejudice. In addition, Columbia agreed that it would not implement any changes to the composition of MLIs without a formal filing with the Commission. Columbia will allow shippers to review in advance a draft of any filing to change the composition of MLIs and provide feedback prior to filing. Columbia shippers have agreed to withdraw, without prejudice, their complaint, based on [several] conditions," the NiSource pipeline said in its request for withdrawal [RP08-401, RP08-403]. The complainants included Atmos Energy Marketing LLC, BP Energy, Delta Energy LLC, Hess Corp., Honda of America Manufacturing Inc., Integrys Energy Services, Interstate Gas Supply Inc., National Energy Marketers Association, the Ohio Farm Bureau Federation and Sequent Energy Management LP.

Albuquerque, NM-based PNM Resources Inc. has reached agreement with the New Mexico attorney general and union workers regarding the company's pending $620 million sale of its natural gas utility operations in the state. The agreement comes after PNM's broader sales agreement with Texas-based Continental Energy Systems LLC was narrowed to only include the natural gas assets. As part of the settlement, PNM and the attorney general will drop their separate pending appeals of a 2007 New Mexico Public Regulation Commission (PRC) gas rate decision at the New Mexico Supreme Court. In late July, PNM and Continental agreed to terminate PNM's pending acquisition of Cap Rock Energy Corp., an electric distribution and transmission company serving 36,000 customers in 28 Texas counties, which was a second part of the original sales agreement between the two companies. As part of the stipulation, PNM would be allowed to retain all of the gain on sale as is consistent with the PRC current rules. It also requires the new entity, New Mexico Gas, to freeze base retail rates for three years and to make average annual capital expenditures of at least $21.6 million for major gas utility projects and replacements during the freeze period.

The U.S. Court of Appeals for the Federal Circuit late last month ordered the federal government to pay more than $1 billion in recovered costs to a group of exploration and production (E&P) companies, upholding a 2005 federal court's decision to pay for leases off the California coast that were breached. The decision affirms that the government owes the companies bonuses they paid for Outer Continental Shelf leases. Involved in the case are leases for 35 undeveloped tracts off Ventura, Santa Barbara and San Luis Obispo counties along the south-central California coast that were granted in the 1979-84 time period. The appellate court upheld the 2005 ruling by the U.S. Court of Federal Claims, which had said the companies were owed the awards. Following a series of legal battles related to California's Coastal Zone Management Plan, the companies couldn't use the leases, and they ultimately expired or were suspended by the government. The state has resisted federal attempts to expand offshore drilling in the area, and a federal judge three years ago backed the state's position.

The chairman and CEO of Oklahoma City-based Quest Resource Corp. and two related entities has resigned and the CFO is on a paid administrative leave following the discovery of about $10 million of "questionable transfers" of corporate funds. The boards of directors for Quest Resource Corp., Quest Energy Partners LP and Quest Midstream Partners LP in late August accepted the resignation of Jerry Cash as chairman and CEO of all three entities. Quest said it had reported the matter and intended to fully cooperate with the Securities and Exchange Commission and other governmental and regulatory organizations. Cash, 46, had been chairman of Quest since November 2002 when Quest acquired STP Cherokee Inc. He was named CEO in September 2004. Cash formed STP Inc. in 1987 and as president directed that company in finding several oil, natural gas and coalbed methane projects, according to Quest. In November 2002 Cash transferred most of STP's assets to STP Cherokee and sold STP Cherokee to Quest. According to Forbes, Cash's salary at the end of 2007 was $525,000. With incentives and bonuses, Cash reportedly received $2.387 million in 2007. Quest Resource Corp. owns the right to develop around 130,000 net acres in the Appalachian Basin, including 122,600 acres prospective for the Marcellus Shale. Quest Resource Corp. also owns 100% of the general partner and a 57% limited partner interest in Quest Energy Partners, and 85% of the general partner and a 36% limited partner interest in Quest Midstream Partners.

The Commodity Futures Trading Commission (CFTC) has settled charges against Alvin Perez, a former New York Mercantile Exchange (Nymex) compliance department clerk, for disclosing nonpublic information to Nymex floor brokers. The CFTC issued an order permanently prohibiting Perez, of Staten Island, NY, from working for an exchange or any other firm required to be registered with the CFTC. The order also permanently bars Perez from acting as a principal, agent or any other officer or employee of any exchange, registered futures association, self-regulatory organization, or person registered, exempted from registration or required to be registered with the CFTC. Perez was charged with disclosing to floor brokers material nonpublic information regarding investigations and proposed regulatory actions, which he obtained in his capacity as a Nymex employee (see NGI, April 14). The CFTC action resulted from a cooperative enforcement investigation with the New York County District Attorney's Office (NYCDAO) of abusive trading practices on the Nymex. In a related matter Perez pled guilty to the state crime of commercial bribe receiving in the second degree for the same underlying conduct, for which the NYCDAO has recommended probation.

FERC issued a favorable environmental review of TransColorado Gas Transmission's proposal to relocate two compressor facilities in Colorado and build a new interconnect with Rockies Express Pipeline (REX). TransColorado, a Kinder Morgan pipeline, proposes to move a 2,370 hp compressor unit and a 3,550 hp unit from the Greasewood Compressor Station in Rio Blanco, CO, six miles to the pipeline's Meeker Compressor Station. The pipeline also seeks to build an interconnect with REX at the Meeker station [CPP05-45, CP06-401]. TransColorado said construction associated with the installation of the compressor units would take about four months and would begin in October if FERC issues a certificate. When the compressors are relocated, TransColorado said it would be capable of delivering 130,000 Dth/d to Wyoming Interstate Co.'s pipeline at the Greasewood Compressor Station and 210,000 Dth/d to the REX pipeline via the proposed interconnect at the Meeker Compressor Station..

Vector Pipeline LP will test shipper interest in a third expansion of its system that extends from Chicago to Dawn, Ontario, in a binding open season in September. The 2010 expansion proposes to add long-haul capacity of up to 120 MMcf/d by installing two new compressors and upgrading the U.S. portion of the Vector system. The expansion could also include up to 700 MMcf/d of short-haul capacity from Belle River, MI, to the Dawn storage facilities by adding a loop to the Canadian side of the pipeline, according to Vector, which is jointly owned by Calgary-based Enbridge Inc. and DTE Energy Co. Binding bids for firm capacity will be accepted between Tuesday (Sept. 2) and Sept. 30. Open season materials will be available at www.vector-pipeline.com.

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