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Less than three months after entering service, Southeast Supply Header LLC (SESH) is conducting a nonbinding open season for a proposed expansion along its existing 274-mile route. The pipeline is a venture of affiliates of Spectra Energy Corp. and CenterPoint Energy Inc. and currently extends from CenterPoint's Perryville Hub near Delhi, LA, to the Gulfstream Natural Gas System LLC interconnection near Coden, AL. SESH will accept nonbinding nominations for service from any existing or proposed receipt points to any existing or proposed delivery points on its system. The specific scope of the expansion will be finalized following the results of the open season. The target in-service date would be as early as mid-2011. Nominations will be accepted through 5 p.m. EST Jan. 16. For information, contact Randy Riha at, or (713) 627-4746, or visit

Pacific Trail Pipelines LP (PTP) is seeking shippers for its proposed C$1.2 billion, 463-kilometer (288-mile) Kitimat to Summit Lake Looping Project (KSL Project). Capacity takers would eventually be able to transport Canadian gas to the proposed Kitimat LNG Inc. terminal for liquefaction and shipment to more lucrative markets in the Pacific Rim. The KSL Project would begin at an interconnect with Spectra Energy Transmission near Summit Lake, BC, and deliver gas to an interconnect with the proposed liquefied natural gas (LNG) liquefaction terminal at Bish Cove, BC. The project has been under development since 2005. In June PTP was granted an environmental assessment certificate for the project by British Columbia regulators. PTP said it expects to receive approvals under the Canadian Environmental Assessment Act before the end of the first quarter of 2009. Just recently Calgary-based Kitimat offered up capacity at the LNG terminal. In September the company cited shifting global gas supply and demand fundamentals as reason to revise its plans for an LNG import terminal to instead construct an export terminal at Bish Cove .The deadline to respond to the pipeline open season is Dec. 22. More information on the KSL Project is available at Information on the Kitimat LNG terminal project is available at

FERC said the AES Sparrows Point liquefied natural gas (LNG) import terminal proposed near Baltimore, MD, and associated Mid-Atlantic Express pipeline would have a "mostly limited adverse environmental impact." In a final environmental impact statement (FEIS), FERC staff concluded that "if the project is constructed and operated in accordance with AES' and Mid-Atlantic Express' proposed mitigation measures, our recommended mitigation measures and route variations presented in...this final EIS, and the Coast Guard's safety and security measures, construction and operation of the proposed facilities and the related LNG marine traffic would have mostly limited adverse environmental impact." The FEIS, however, said the proposed pipeline facility and/or terminal could have an "adverse impact" on residential areas; property values; camps, parks and trails; and the bog turtle and Indiana bat, as well as on recreational waterfowl hunting practices near the Sparrows Point LNG terminal. With the FEIS, Sparrows Point and Mid-Atlantic Express are one step away from receiving FERC approval. The draft environmental impact statement, which was issued in April, was a bit more favorable for the terminal and pipeline project (see NGI, April 28). It said that "with appropriate mitigating measures, as recommended, [they] would have limited adverse environmental impact and would be an environmentally acceptable action."

The entire expansion of the Dominion Cove Point liquefied natural gas (LNG) import terminal -- the plant and pipeline facilities in Pennsylvania and Maryland -- is expected to be completed by the end of the month, a Dominion spokesman said. But start-up of all the facilities may not occur until early 2009. About 70% of the Pennsylvania facilities are in service, with the remaining facilities expected to be placed in service this week. FERC last month gave Dominion Transmission Inc. (DTI) the green light to begin service on 88 miles of 24-inch diameter pipeline extending northward from the new Perulack Compressor Station in Juniata County, PA, to the Leidy Meter Station and pipeline replacement facilities at the Leidy Hub complex in Clinton County, PA [CP05-131]. And shortly after the Pennsylvania facilities go into operation, Dominion expects the terminal plant expansion to be ready for start-up. DTI, a pipeline subsidiary of Richmond, VA-based Dominion Resources, expects to ask FERC for the go-ahead to place the expanded terminal in operation. The expansion of the Cove Point LNG terminal on the eastern shore of Maryland will raise sendout capacity to 1.8 Bcf/d from 1 Bcf/d. The project also will almost double storage capacity to 14.6 Bcf. Donovan said the Maryland facilities -- 41 miles of 36-inch diameter pipeline loop -- will be the final part of the project to fall into place.

A preliminary injunction was filed to keep the city of Grand Prairie, TX, from enforcing portions of its unified development code against Texas Midstream Gas Services LLC (TMGS), which is building a natural gas compressor station in the city. TMGS, a subsidiary of Chesapeake Energy Marketing, sought the injunction after the U.S. District Court for the Northern District of Texas ruled that the code did not violate the federal Pipeline Safety Act or a Texas state law which allows gas companies the power of eminent domain, and said Grand Prairie could regulate design and construction aesthetics of compressor stations. The court's order held that the city's code, which was enacted in July and regulates building materials, roof pitch, setbacks, noise reduction and more, survived all but one of TMGS's challenges. The injunction restrains the city from enforcing a portion of the code stipulating the height of a security fence to enclose the compressor station.

Chesapeake Energy Corp. wants to issue stock to raise nearly $1.8 billion to finance U.S. natural gas drilling and exploration activities. Citing turmoil in the credit markets, declining natural gas prices and concerns about an oversupply of gas, Chesapeake said in separate filings with the Securities and Exchange Commission (SEC) in late November that among other things it is renegotiating some drilling agreements to reduce costs. In one filing the Oklahoma City-based independent said it would issue shares worth as much as $1 billion, with net proceeds to be used for "general corporate purposes, including funding our exploration, development and other capital expenditures." A second filing indicated that 50 million shares worth as much as $781 million would be registered for potential sale over the next year to fund "continuing purchases of assets" instead of spending cash reserves.

Producers paid $9.12 million for leasing rights and rental fees on parcels in mostly southern and eastern Wyoming that were offered by Interior Department's Bureau of Land Management (BLM) in its bimonthly federal oil and lease auction last Tuesday. The receipts will be shared almost equally between the federal government and the state of Wyoming. Total bids for the 164 parcels sold were $8.83 million, with rental fees pegged at $259,387 and administrative fees totaling $22,960, resulting in total receipts of $9.12 million. The highest bid per parcel was $584,700, while the average bid per parcel sold was $53,893, the BLM reported. Approximately 88% of the 187,275,750 acres offered were sold, or 172,885,510. The highest bid per acre sold was $460, while the average bid per acre sold was $51, according to BLM. The next oil and gas lease sale will be held on Feb. 3 in Cheyenne, WY.

The Bureau of Land Management will publish in the Federal Register a final rule eliminating part of existing regulations that allow two congressional committees to direct the Interior secretary to make an emergency withdrawal of lands from mining and mineral leasing activity. The change eliminates the redundancy in existing regulations and removes constitutional issues raised by the committee-directed withdrawal provision. The final rule, however, will retain a procedure whereby the secretary alone can initiate an emergency withdrawal immediately upon determining that an emergency exists and that extraordinary measures need to be taken to protect natural resources or resource values that otherwise would be lost. The rule does not affect the conventional process for segregating and protecting public lands, the BLM said.

FERC issued El Paso's Wyoming Interstate Co. Ltd. (WIC) pipeline a certificate for a compression expansion that will add nearly 230,000 Dth/d of takeaway capacity on its Piceance Lateral. WIC proposes that its expansion be built in two phases. Phase I calls for the uprate of an existing compressor at the Greasewood Compressor Station in Rio Blanco County, CO, increasing available horsepower to 2,832 hp from 1,650 hp and boosting capacity by 50,000 Dth/d. WIC estimated that it will be able to complete the uprate within 14 days of receiving FERC approval. In Phase II, WIC proposes to install and operate a second compressor unit and associated facilities at the Greasewood Compressor Station and build a 13,664 hp Snake River Compressor Station in Moffat County, CO. Phase II would create an additional 179,500 Dth/d of capacity, and is targeted for completion by Oct. 1, 2009, according to WIC. FERC granted WIC 's request for a predetermination to roll in the costs ($61.6 million) of the compression expansion into WIC's existing Piceance Lateral incremental reservation rates.

New Hampshire-based Unitil Corp. closed its $201.6 million purchase of Northern Utilities Inc. and Granite State Gas Transmission Inc. from NiSource Inc. The deal was announced Feb. 19 (see NGI, Feb. 25). A utility holding company with electric and natural gas distribution utilities spread around New England, Unitil absorbed 81 employees and 52,000 retail gas customers making up Northern and Granite's distribution operations. Unitil's utilities now employ 430 workers and serve about 167,000 customers in 71 cities and towns in Massachusetts, Maine and New Hampshire. The purchase price was $160 million, plus $41.6 million for working capital, including about $33.9 million of gas storage inventory. Unitil said there was no acquisition premium. Unitil said it expects to close soon on long-term debt financing of $90 million, and to raise additional capital through the issuance of common stock.

Houston-based Plains Exploration & Production Co. (PXP) has completed the sale of its remaining interests in some properties located in the Permian and Piceance basins to Occidental Petroleum Corp. (Oxy) and to some undisclosed companies with contractual preferential purchase rights for a total of $1.25 billion in cash. Oxy in September agreed to acquire the stakes (see NGI, Sept. 29). In late 2007 Oxy paid PXP a total of $1.55 billion for a 50% stake in PXP's Permian and Piceance leaseholds (see NGI, Dec. 24, 2007). The Permian and Piceance basin assets have net production of around 52 MMcf/d of gas and 4,300 b/d of liquids, or 13,000 boe/d. The properties also have about 92 million boe of proved reserves, 45% developed and 69% weighted to gas. PXP is expected to use the proceeds to develop a joint venture with Chesapeake Energy Corp. in the Haynesville Shale (see NGI, July 7).

The effective date of the Department of Transportation's final rule that will allow certain natural gas pipelines to operate at higher maximum allowable operating pressures than those permitted under existing pipeline safety regulations has been postponed by more than a month. The effective date initially was Nov. 17, but it has been moved to Dec. 22, according to the Federal Register. Under the new rule, pipeline operators will no longer have to apply for special permits to operate at higher pressures, as is currently required (see NGI, Nov. 3).

A decision on whether to move forward with the long-proposed Mackenzie Gas Project (MGP) has suffered yet another delay, with Canadian regulators admitting that they will not complete a report on the natural gas project until Dec. 2009. The MGP, which at one point was expected to be completed by 2011, would transport up to 1.9 Bcf/d of gas almost 1,200 kilometers (750 miles) along the Mackenzie River Valley to Alberta. There it would link to pipes that would carry gas to markets serving Canada and the Lower 48 states. Canada's Joint Review Panel (JRP) was tasked with weighing the environmental and socioeconomic impacts of the proposed pipe, and in May said it was not sure when the report would be issued (see NGI, May 26). MGP sponsors include lead partner Imperial Oil Ltd., Imperial majority stakeholder ExxonMobil Corp., Royal Dutch Shell plc, ConocoPhillips and the Aboriginal Pipeline Group.

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