FERC granted Mississippi Hub LLC (MS Hub) a multi-year extension of the deadline to complete and place into service its proposed salt dome natural gas storage facility near Jackson County, MS. "MS Hub states that while project construction is proceeding with due diligence, MS Hub will not be able to make the project facilities available for service by the Feb. 15, 2009 deadline due to construction delays and market changes," the Lafayette, LA-based storage developer told FERC. "Currently MS Hub expects to complete construction of its first storage cavern during the first half of 2011. By early 2012, MS Hub expects that all remaining project facilities will be completed." FERC has given the company until Feb. 15, 2012 to complete the facilities and place them in operation. The two-cavern facility is under construction at the Bond Salt Dome in southeastern Mississippi. FERC certificated each cavern to have a working capacity of 6 Bcf, but Mississippi Hub plans to expand the capacity of each cavern to 7.5 Bcf, said Russell Murrell, vice president of marketing.
Falcon Gas Storage Co. Inc. subsidiary NorTex Gas Storage Co. LLC will hold an open season for capacity at its Worsham-Steed and Hill-Lake facilities in North Texas starting Wednesday (Jan. 28). Bids are due by Feb. 12. "We will be leasing up to 6 Bcf of capacity for single and multi-year contracts that start April 1, 2009," said John Holcomb, vice president of marketing. "A variety of storage services will be offered, including two- to five-cycle firm storage and load-following and hourly balancing (LFHB), for this coming summer." Falcon's 24-hour intraday LFHB service provides gas-fired power plants with a way to balance daily gas purchases with hourly power dispatch. North Texas is dominated by gas-fired power generation.
Williams Transcontinental Gas Pipe Line (Transco) is holding a nonbinding open season through Feb. 26 for expansion capacity to serve southeastern markets. This project would be in addition to a similar expansion the company announced last year. The proposed Mobile Bay South II expansion would offer year-round firm service on Transco's Mobile Bay Lateral from Station 85 in Choctaw County, AL, as far south as an existing interconnection with Gulfstream Natural Gas System in Mobile County, AL. The compression-only expansion is expected to provide up to 550,000 Dth/d of capacity as early as May 2011, subject to FERC approval. The firm transportation service will be performed under Transco's Rate Schedule FT and Part 284(G) of FERC regulations. Shippers will pay the maximum Rate Schedule FT reservation rate and commodity rate applicable to firm service under the project; rates may change from time to time. The final size of Mobile Bay South II will be determined by the open season results. For information, contact Toi Anderson at (713) 215-4540.
Exelon Corp.'s Pennsylvania gas and electric utility, PECO, saw natural gas consumption fall approximately 3.3% in 2008, including a 1.4% drop in December compared to December 2007. PECO, which serves 490,000 gas and 1.6 million electric customers in the greater Philadelphia area, delivered 84 Bcf of natural gas and 39.5 billion kWh of electricity in 2008. PECO blamed lower customer usage and warmer weather for the lower delivery numbers. The company delivered 12 Bcf of natural gas to its suburban customers in December. PECO directly sold 64% of the total volume in 2008; the remainder was purchased separately by large industrial customers and transported on the PECO gas distribution system.
Puget Sound Energy's (PSE) $7.4 billion sale to a consortium of private investment groups led by Macquarie Infrastructure Partners should close Feb. 6, the investors and PSE's parent, Puget Energy, said. They said the companies have accepted the conditioned approval late in December by the Washington Utilities and Transportation Commission, the deal's final regulatory approval, a split 2-1 decision, heavily conditioned and affirming a multi-party settlement from last summer that included its own staff (see NGI, Jan. 5; July 28, 2008). Commissioner Philip Jones opposed approval of the sale and filed a separate dissent, contending that "the settlement agreement in its current form creates too much risk and potential harm for ratepayers and stakeholders." Puget Holdings LLC, the acquiring company made up of the Macquarie-led investment groups and Puget Energy, has committed to support the PSE utility's $5 billion capital program during the next five years as it attempts to narrow a gap between growing demand and its resource base in western Washington state, where it serves more than 1 million electric and about 750,000 natural gas customers.
San Diego, CA-based Sempra Energy remained silent in the midst of reports of severe financial losses being felt at its joint venture commodity trading partner, the Royal Bank of Scotland (RBS), as the red ink keeps growing and the United Kingdom government is planning to take even bigger stakes in its banking industry. Last Monday the UK-based global banking giant said the originally estimated 7-8 billion pounds ($10.3-11.8 billion) it lost before goodwill charges had ballooned up to 15-20 billion pounds ($22.1-29.5 billion). Subsequent reports out of the UK in the international financial news media said RBS was poised to announce as much as a $40 billion loss for 2008. Last November Sempra reported its first trading losses for the third quarter ($3 million in the red, compared to $87 million in profits in the third quarter of 2007) as part of overall results that were essentially flat for the third quarter, showing an overall net income level of $308 million. Even after experiencing the rare loss in its joint venture energy trading business, Sempra senior executives talked bullishly about the prospects for the fourth quarter and next year during a conference call with financial analysts. That may have to change when the year-end 2008 results are issued.
Although reports out of the Navajo Nation indicate an agreement has been reached in a long-standing interstate natural gas pipeline right-of-way (ROW) dispute with an El Paso Corp. subsidiary, a Houston-based spokesperson for El Paso told NGI that there is no "fully executed agreement" and a confidentiality agreement between the parties remains in effect as talks continue. In the meantime, interim agreements continue between both sides and natural gas flows that vary been approximately 2-3 Bcf/d have never been threatened, the spokesperson said. At issue since a 20-year ROW agreement expired in October 2005 is the valuation of the Navajo Nation lands for the purpose of an interstate pipeline ROW. The Native American tribe has alleged that El Paso is questioning its sovereignty, but the pipeline company contends it is strictly an economic dispute. The Houston-based pipeline operator needs a renewed long-term agreement with the Navajos to ship natural gas across more than 900 miles of tribal lands in Arizona, Nevada, New Mexico and California. Three years ago El Paso Natural Gas Co. and the Navajo Nation signed an interim agreement that ended a stalemate over the fair dollar value of the gas pipeline's access to tribal lands (see NGI, Jan. 23, 2006). Last summer Navajo Nation President Joe Shirley Jr., announced that a deal had been reached. The last public statement by El Paso was in an 8K filing to the Securities and Exchange Commission on May 19 of last year saying that on May 14 the two sides had reached a "preliminary agreement" and a final deal was to be worked out by June 30, 2008. That never happened. In the meantime, "there has never been a problem with gas flows," nor has the Navajo Nation tried to circumvent the Natural Gas Policy Act, the El Paso spokesperson said.
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