Spectra Energy is holding an open season for expansion of its Transportation North (Zone 3) facilities in northern British Columbia (BC). The company plans to construct up to 260 MMcf/d of incremental eastbound capacity for deliveries to interconnects with TransCanada PipeLines and Alliance Pipeline near Gordondale, AB. Spectra also plans to construct up to 135 MMcf/d of incremental westbound capacity on its Fort St. John mainline for delivery to its compressor station No. 2 near Chetwynd, BC. The new facilities are expected to be in service in fourth quarter 2009. Interested parties must submit a nomination form by noon MST on Nov. 7. Details and nomination forms are available at www.wei-pipeline.com. For information contact Kirsten Jaron, director of marketing and business development, at (403) 699-1578 or at firstname.lastname@example.org.
FERC has approved the sale of Houston-based wholesale gas and power marketer Eagle Energy Partners to EDF Trading North America by bankrupt Lehman Brothers Holdings Inc. The Federal Energy Regulatory Commission (FERC) found that approval was not required under section 203(a)(2) of the Federal Power Act. The Commission determined that authorization under section 203(a)(2) would not be required for the acquisition of Eagle because a power marketer is not a "transmitting utility," an "electric utility company," or a "holding company." The deal recently was approved by the judge presiding over Lehman's bankruptcy. FERC determined that the transaction would not have an adverse effect on competition, rates or regulation and thus was "consistent with the public interest." FERC also determined that the transaction will not result in cross-subsidization or pledge of encumbrance of utility asset for the benefit of an associate company and thus would not harm ratepayers. EDF Trading, which is owned 100% by EDF Group, trades in the international wholesale energy markets, buying and selling electricity, emissions, natural gas, coal, freight, biomass and oil, according to the company's website. EDF Trading is one of the largest electricity traders in Europe, a leading European gas trader and one of the first traders to move into the global market for liquefied natural gas, it says.
FERC gave Kinder Morgan Interstate Gas Transmission LLC the go-ahead to begin service on a lateral that provides distribution customers in Greeley, CO, with access to natural gas from competing pipelines. The 41.4-mile Colorado Lateral begins at Kinder Morgan's existing facilities at the Rockport Compressor Station within the Cheyenne Hub and terminates in Greeley, where service will be provided to Atmos Energy Corp., a local distribution company (LDC). The lateral delivers up to 55,000 Dth/d. Atmos had been receiving all of its gas supplies for the Greeley area from the Public Service Company of Colorado (PSCo), an LDC that is a wholly owned subsidiary of Xcel Energy. With the completion of the lateral, Atmos will be able to receive supplies from both PSCo and Kinder Morgan to serve the Greeley market.
Two deepwater Gulf of Mexico (GOM) development projects, Droshky and Ozona, which initially may book a total of 29 million boe of natural gas and oil proved reserves, will move forward following approval by Marathon Oil Corp. Marathon's board of directors approved spending $1.3 billion for the Droshky development and $300 million for the Ozona project. At net peak production, Droshky's output after royalties is expected to be around 45,000 b/d of oil and 43 MMcf/d of natural gas. The discovery, in 2,900 feet of water in Green Canyon Block 244, is about 140 miles south-southwest of Venice, LA, and about 18 miles southeast of Royal Dutch Shell's Bullwinkle platform. Droshky would consist of four development wells, which would be tied back to Bullwinkle, and first production is targeted for 2010. The initial Droshky discovery well and two sidetracks were drilled in 2007 to a total depth of 21,190 feet (see NGI, June 4, 2007). A second delineation and sidetrack well were drilled earlier this year. Marathon holds a 100% working interest in Droshky. The Ozona discovery is in 3,000 feet of water on Garden Banks Block 515, about 175 miles southeast of Sabine, TX, and about six miles from Shell's Auger platform. Ozona's first production is expected in 2011, with an anticipated net peak rate of about 6,000 b/d of oil and 13 MMcf/d of gas, after royalties. Marathon holds a 68% stake in Ozona; Marubeni obtained the remaining 32% working interest following a transaction with Pioneer Natural Resources Co. two years ago (see NGI, Feb. 27, 2006).
More than 76 Bcf of natural gas was sold to six companies in a royalty in kind (RIK) Gulf of Mexico (GOM) gas sale conducted in October by the Department of Interior's Minerals Management Service (MMS). About 241,000 MMBtu/d was sold in the sale under five- or 12-month contracts. Delivery was scheduled to begin Saturday (Nov. 1). ConocoPhillips, Shell Energy North America, United Energy Trading LLC, JPMorgan Chase, Williams Gas Marketing Co. and National Energy and Trade LP were the winning bidders, MMS said. If gas prices were to be around $7/MMBtu, the sale would equate to more than $537 million in total gross revenues, according to the federal agency. Actual sales will vary based on gas prices over the life of the contracts. The gas sold in the sale is based on average volumes produced before Hurricane Ike stormed through the GOM in early September. Actual volumes sold may vary because gas that was shut in because of the hurricane is to be restored to production and delivered to market centers.
Reflecting different utility strategies for buying wholesale supplies, the Oregon Public Utility Commission (PUC) approved annual rate changes for the state's three private-sector natural gas distribution utilities. Residential rates were increased by the PUC for the two Portland, OR-based utilities, Northwest Natural Gas Co. (14.5%) and Cascade Natural Gas Co. (5.4%), while rates were dropped 2.9% for Spokane, WA-based Avista Utilities. On average, Northwest Natural residential bills will go up more than $10/month to about $85; in the winter months this could be a more than $20/month increase to about $160/month in January. Cascade residential customers would see a small average increase of about $4/month to $78, and $7/month more in the winter to $147/month. Avista's monthly decreases will range from $2/month to $5/month, average and winter months, respectively.
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