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Gulf South Pipeline Co. LP, a subsidiary of Boardwalk Pipeline Partners LP, has launched a binding open season to solicit interest in expanding its East Texas-to-Mississippi 42-inch diameter pipeline. The expansion would provide for increased natural gas production from East Texas and the emerging Haynesville Shale of northwestern Louisiana. If it obtains enough commitments in the open season, Gulf South would expand its existing system by 500,000 MMBtu/d with compression subject to Federal Energy Regulatory Commission approval. Gulf South said that based on commitments, it also may pursue "further expansions of its capacity beyond the initial expansion" of 500,000 MMBtu/d. The East Texas-to-Mississippi expansion project was placed in service early this year (see NGI, Jan. 21). Bids for capacity will be accepted until 3 p.m. CDT on Oct. 6. For more information contact Rick Whitworth at (713) 479-8644 or Steve Noe at (713) 479-8126, or visit

National Fuel Gas Co. subsidiary National Fuel Gas Supply Corp. (NFGS) is launching an open season to provide shippers with access to long-term contracts for firm storage capacity of up to 8.5 Bcf at locations in New York and Pennsylvania. The incremental storage space, which will be available upon the completion of expansions at several existing underground natural gas storage fields, is being developed in concert with the West-to-East and Appalachian Lateral pipeline transportation projects. The incremental capacity will be phased in over a two-year period, with the initial phase projected to go in service on April 1, 2011. The open season will close on Oct. 3 at 11 a.m. EDT. The current storage facility candidates for expansion are the East Branch facility near Ludlow, PA, the Galbraith facility near Brookville, PA, and the Tuscarora facility, which is near Addison, NY. NFGS also announced that the deadline for the Appalachian Lateral open season launched on Aug. 5 will be extended until Oct. 3 at 11 a.m. EDT to coincide with the storage expansion open season. The Appalachian Lateral open season offers capacity on a proposed pipeline system that will provide new interstate pipeline infrastructure to bring to growing Northeast markets the new gas supplies to be produced from the Marcellus Shale and other Appalachian producing formations (see NGI, Aug. 11). The Appalachian Lateral may serve as a complement to NFGS's previously announced West-to-East project, which is designed to move Rockies Express gas supply from Ohio to the Northeast. More information about the transportation and storage services being offered with the open seasons can be obtained at, or by calling National Fuel's Interstate Marketing Department at (716) 857-7740. The pipeline and storage segment operations of National Fuel Gas are carried out by NFGS and Empire State Pipeline. These companies provide natural gas transportation and storage services to affiliated and nonaffiliated companies through an integrated system of nearly 3,000 miles of pipelines and 31 underground natural gas storage fields in western New York and western Pennsylvania.

Williams has completed the purchase of interests in the Barnett Shale of North Texas for $147 million from privately held Aspect Abundant Shale LP and other parties. The assets represent an estimated 175 Bcfe of proved, probable and possible reserves, along with 41 producing wells with net production of approximately 9 MMcfe/d on approximately 10,000 net acres, primarily in Tarrant, Johnson and Hood counties. When Williams first announced the deal in July it said it had agreed to a purchase price of $166 million (see NGI, July 28). The change in the purchase price "is because the parties are in the process of finalizing title work on a small portion of the acquisition package," Williams said. At year-end 2007 Williams had an estimated 277 Bcfe of proved, probable and possible reserves in the Barnett Shale. Prior to the acquisition of the Aspect interests, Williams' holding in the play was approximately 34,000 net acres. The company has four drilling rigs operating in the Barnett and plans to add two rigs to begin developing the new acreage. In the second quarter Williams produced an average of 40 MMcfe/d net in the Barnett Shale. With second quarter exploration and production profits more than doubling and midstream income rising 17.5% from a year ago, Williams last month boosted its 2008 earnings guidance for the second time in less than two months (see NGI, Aug. 11). Increased development within the Piceance, Powder River and Barnett Shale basins drove a 24% jump in domestic gas production growth in 2Q2008, and Williams surpassed 1.1 Bcfe/d in domestic production during the period. In the Piceance Basin of western Colorado -- the company's cornerstone for production and reserves growth -- reported average output climbed 26% in the second quarter to 659 MMcfe/d from 522 MMcfe/d. The Powder River Basin in Wyoming, the company's second-largest production area, had 41% growth from a year earlier to 234 MMcfe/d from 166 MMcfe/d. Williams' other North American oil and gas production, which includes stakes in the San Juan Basin of New Mexico and the Barnett Shale of Texas, reported 4% growth overall to 266 MMcfe/d from 257 MMcfe/d in 2Q2007.

The Department of Interior's Minerals Management Service (MMS) touted its royalty-in-kind (RIK) program in an annual report to Congress, reporting that its benefits for fiscal year (FY) 2007 more than doubled those of the previous year. MMS reported that the RIK program generated a total gain off $63 million over what would have been realized if the federal government had taken royalties "in value," or as cash payments from producers. It attributed part of the gain to the run-up in crude prices this year. The RIK program permits the MMS to take royalties "in kind" in the form of production (oil or natural gas), and competitively sell the product in the open market. Of the $63 million in gains realized in FY 2007, $56.5 million in additional revenue was achieved through open and competitive sales of oil and gas, compared to what would have been received if MMS has taken its royalties "in value;" $3.5 million was achieved through administrative savings; and $3 million was gained through what is called "time value of money," attributed to receiving receipts several days earlier than royalty-in-value payments. The MMS report noted that the majority of the savings were realized from natural gas ($40.2 million,) with crude oil generating $22.7 million in benefits. The Interior agency reported that FY 2007 savings were more than double those of FY 2006 ($31.2 million). It estimated that more than $150 million in savings have been achieved since the RIK program became operational four years ago. One of the program's primary goals is to realize 825,000 Mcf/d of RIK natural gas sales by FY 2009. This has been revised downward from its initial estimate of 1.3 Bcf/d. MMS said it expects to maintain volumes of 190,000 b/d of crude oil through FY 2009.

Canadian Utilities' ATCO Pipelines subsidiary and TransCanada Corp.'s NOVA Gas Transmission Ltd. (NGTL) unit reached an agreement to provide seamless natural gas transmission service to customers in Alberta. The gas transmission model will utilize a single suite of services to provide integrated gas transmission service, which the companies expect to add value for customers as a result of seamless efficient service throughout the province. Both ATCO Pipelines and NGTL said they have been encouraged by their regulators and customers to explore collaborative concepts designed to streamline the provision of natural gas transmission service across Alberta and to address competitive pipeline issues. "The seamless gas transmission model is the result of this process," the companies said. If approved by the regulator, the arrangement will see the two companies combine physical assets under a single rates and services structure with a single commercial interface for customers but with each company separately managing assets within distinct operating territories in the province. It is expected that the model will end duplicative tolling and operational activities and will result in more efficient regulatory processes. The Alberta Utilities Commission said it concurs with the two companies meeting with representatives of the various customer groups. The objective of the discussions is to evaluate the long-term benefits and to determine rate and system design principles with the various groups for ultimate approval by the regulators. ATCO Pipelines provides natural gas transmission services to producers in the Western Canada Sedimentary Basin, marketers, industrial customers and gas distribution companies in Alberta. NGTL owns and operates the 23,570-kilometer Alberta System, which gathers natural gas for use within the province and delivers it to provincial boundary points for connection with export pipelines.

The Virginia Supreme Court unanimously ruled in favor of Houston-based GeoMet in its ongoing natural gas pipeline dispute with a CNX Gas Corp. affiliate. The dispute is centered on a 32-acre coalbed methane (CBM) play in Buchanan County, VA. CNX Gas Co. LLC and GeoMet separately explore and develop property in and around southwestern Virginia, and until April 2007, a CNX affiliate had a gathering agreement to redeliver GeoMet's gas production into the Columbia Gas Transportation interstate pipeline system. GeoMet obtained an easement from Pocahontas Mining Co. (PMC) to construct a gathering line and began to build a 12-mile interconnect to the Jewel Ridge Pipeline, which is operated by Spectra Energy's East Tennessee Natural Gas. However, CNX claimed to hold exclusive right to build and operate gas pipes on the PMC property, and in January 2007, CNX filed a lawsuit to prevent GeoMet from building the pipeline. A temporary injunction halted the pipe's construction. On appeal, the Virginia Supreme Court lifted the injunction but ruled that CNX could pursue damages or a partition of the property in dispute. The Virginia Supreme Court had agreed to hear an appeal of the remaining portion of a lower court's order that CNX held the exclusive right to transport gas over the PMC land (see NGI, Nov. 19, 2007). The ruling overturned the lower court and held that a lease between CNX and PMC did not grant CNX an exclusive right to transport gas across PMC's property.

Wisconsin Public Service Corp. (WPS), and the state Citizens Utility Board (CUB) agreed on several energy-saving initiatives for WPS's electric and natural gas customers. The CUB filed the stipulation with the Wisconsin Public Service Commission (PSC) Sept. 3, seeking the regulators' approval. The series of programs that the utility and the consumer unit agreed to are aimed at helping customers cut their energy use and eventually lower retail energy utility rates. The proposal calls for a four-year pilot program to begin the process. Under the pilot program, WPS agreed to reduce its fixed customer charges, increase its annual contribution to statewide conservation efforts in each of the first four years, and conduct what the utility called "innovative rate offerings" in three communities as a means of building customer awareness and more of an ability to apply energy efficiency measures. WPS also will support Wisconsin Gov. Jim Doyle's task force recommendations on new or improved state building codes and new or improved appliance standards. The deal allows the utility to earn a profit on the energy efficiency programs, something the CUB had previously opposed. The CUB now supports the measure as outlined for WPS's four-year pilot and its executive director, Charlie Higley, told local news media that the CUB wants the state's other major private-sector utilities to provide similar programs. WPS said that to balance the potential for reduced utility revenues from the increased conservation by customers, WPS will have a revenue stabilization mechanism beginning next year for most of its customers. The utility will be assured a certain revenue level for its natural gas and electric deliveries regardless of weather and other conditions. Adjustments will be made annually, the utility said.

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