TransCanada Alaska Co. LLC (TC Alaska) has suspended development of the North Slope-to-Alberta leg (Alberta option) of its planned Alaska Pipeline Project while it assesses other alternatives to commercialize Alaska North Slope gas, including the potential export of liquefied North Slope gas, the Federal Energy Regulatory Commission (FERC) said in a report to Congress. Following an unsuccessful open season, "TC Alaska notified the Commission on May 11 it was curtailing interim work on the Alberta option while requesting to maintain the record in Docket No. PF09-11 for potential future use. Keeping the prefiling docket open will enable the draft resource reports and other information...to remain viable until TC Alaska moves forward on either the Alberta option or another alternative," FERC said. TC Alaska "also indicated it was working with Alaska North Slope producers to explore the feasibility of developing a liquefied natural gas (LNG) export project that would include constructing a pipeline from the North Slope to an LNG export terminal at an undetermined location in Southcentral Alaska (LNG option). TC Alaska estimated that it would file an application with the Commission for that project in October 2014," the agency told Congress. "The Commission will not move forward to the next step in its NEPA [National Environmental Policy Act] process until TC Alaska decides whether it will proceed with a pipeline to serve North American markets (Alberta option) or embarks on a project to liquefy and export natural gas to foreign markets (LNG option)."
The Pennsylvania Department of Environmental Protection (DEP) will accept public comments on its expedited oil and gas drilling permit proposal until Oct. 1. Gov. Tom Corbett issued an executive order calling for the changes in July on the grounds that the oil and natural gas industry, nonprofit groups and local governments have complained that the current process is inefficient and unpredictable (see NGI, July 30). The DEP said drafts for its proposed Permit Review Process and Decision Guarantee and Permit Coordination policies were submitted for publication in the Sept. 1 issue of the Pennsylvania Bulletin. The agency will host an online information sessions on the policies from 2 to 3 p.m. EDT Monday (Sept. 10). Parties interested in reviewing the policies and registering for the online information session may visit the DEP website and click the "Permit Decision Guarantee" button.
Orascom Construction Industries (OCI), Egypt's largest company, has agreed to make the largest single investment ever in the state of Iowa -- $1.4 billion -- to build a nitrogen fertilizer plant that would tap U.S. natural gas supplies. The proposed plant site in Lee County was chosen over a competing site in neighboring Illinois. The Iowa Economic Development Authority awarded OCI $26 million in tax credits and a $133 million property tax exemption from the Lee County Board of Supervisors over 20 years. Iowa, which is the highest-yielding corn state in the United States, also is the largest consumer of nitrogen fertilizer. The United States now imports more than half of its nitrogen-based fertilizer. When completed, the plant would yield an estimated 1.5-2 million metric tons of ammonia, urea and diesel exhaust fluid a year. The fertilizer plant site would be about four miles from the Mississippi River, which would provide easy access to the Corn Belt. The project "is the largest investment ever made in our state," said Iowa Gov. Terry Branstad. The investment "will bring high-paying, permanent jobs to Lee County and will create approximately 2,500 construction jobs over the next three years. We believe this major capital investment will help invigorate economic development in an area of the state which has previously experienced significant challenges."
Encana Corp.'s board of directors has concluded that the producer did not collude with "competitors" on land leasing in Michigan two years ago. In June Reuters reported that Chesapeake Energy Corp. had worked with Encana to suppress land prices in Michigan's leasehold auctions two years ago (see NGI, July 2). Encana's board launched an internal investigation, with Chairman David O'Brien overseeing it. Based on the results of the investigation, "conducted independent of company management," the board said Encana did not engage in such conduct. Chesapeake and Encana received subpoenas from the Antitrust Division of the U.S. Department of Justice and a civil investigatory demand from the Michigan attorney general; Chesapeake confirmed that it was under investigation in August (see NGI, Aug. 13). Encana said it would "continue to fully cooperate with the investigations of both agencies."
Cabot Oil & Gas Corp. said gross natural gas production in the Marcellus Shale averaged more than 700 MMcf/d for the last two weeks of August, hitting a record 752 MMcf for one 24-hour period. The announcement meshed with a biannual production report issued in late August by the Pennsylvania Department of Environmental Protection, which showed Houston-based Cabot recorded 107.7 Bcf of natural gas production during the first half of 2012 (see NGI, Aug. 27). Cabot spokesman George Stark said the increased production was facilitated by its midstream partner Williams Partners LP, which brought several pieces of infrastructure online, including compressor stations and sections of pipeline (see related story).
Investment funds affiliated with Riverstone Holdings LLC and Kaiser Midstream are partnering to form Sage Midstream LLC with up to $500 million of equity commitments to pursue greenfield and acquisition opportunities in the natural gas liquids (NGL) midstream market in North America. No details were provided on where the company may focus. Houston-based Sage is led by President Greg Bowles and John Steen, vice president of business development. Bowles was previously executive vice president of Lone Star NGL, a joint venture of Energy Transfer Partners LP and Regency Energy Partners LP. While at Lone Star, Bowles and Steen developed more than $1 billion of NGL infrastructure projects.
Pittsburgh-based Heckmann Corp., which provides hydraulic fracturing water services, agreed to pay $125 million in cash and provide 95 million in shares, valued at about $256 million, to acquire the largest environmental services company in North Dakota's Bakken Shale, Power Fuels Inc. Privately held Badlands Energy LLC, founded and owned by Mark Johnsrud, does business as Power Fuels; the combination would create a company composed of 1,300 heavy-duty trucks, 3,800 tanks, 2,000 other fluid handling and solid waste tanks and other environmental services equipment, 200 rail cars and more than 45 disposal wells, with additional wells in the permitting process. Heckmann would have more than 300 miles of permanent and temporary piping and operate 70 locations across 26 states with 3,000 employees and more than 20,000 customers.
A California Public Utilities Commission (CPUC) staff investigation has found no evidence of negligence by Pacific Gas and Electric Co. (PG&E) regarding a recent whistleblower's case, which alleged negligence by the utility in handlingpipe welds on critical parts of its 6,000-mile natural gas transmission system. The CPUC Consumer Protection and Safety Division found no instances in which welds were not inspected in compliance with federal and state gas pipeline safety regulations, the report said. The allegations arose from an earlier statewide investigation launched by the CPUC in early 2011 and for which PG&E was granted an extension to produce full documentation on welds and flaws uncovered during the past 55 years on 1,805 miles of its gas transmission system (see NGI, March 21, 2011).
Beefing up its Atlantic Rim Project area acreage in the Washakie Basin of Wyoming, which includes shallower coalbed methane (CBM) targets and the Niobrara Shale below, Warren Resources Inc. is exercising its preferential rights to acquire additional oil, natural gas and midstream assets from subsidiaries of Anadarko Petroleum Corp. for close to $21 million. Anadarko had no comment on Warren exercising its preferential rights to acquire the assets and acreage. Warren agreed to acquire up to 100% of Anadarko's working interest (WI) in the Spyglass Hill unit within the Atlantic Rim Project, consisting of about 47,015 net acres and a 41.5% WI, for a purchase price of $14.4 million for all of Anadarko's interest; up to 100% of Anadarko's WI in the Catalina Unit area within project, consisting of 4,232 net acres and 19.5% WI, for a purchase price of $2.6 million for all of Anadarko's interest; and all of Anadarko's half-interest in the gas gathering, compression and pipeline midstream assets within the project for $4 million. In August Warren reported that Anadarko had put its Atlantic Rim assets on the block (see NGI, Aug. 13). Anadarko wrote down $978 million in 2Q2012 in part because of low natural gas prices for CBM (see NGI, Aug. 6). During an August conference call to discuss 2Q2012 earnings Price said that while Warren was interested in the Niobrara and Green River formations, it currently had no plans to do any "deep testing" on the CBM.
The growth potential for natural gas as a transportation fuel is a long-term proposition, according to a report released by PIRA Energy Group. Prices for natural gas are expected to stay lower than oil or diesel for a long time, creating a bullish future for the spread of natural gas vehicles (NGV), according to the report, which estimated under a high-end scenario that demand for gas for NGVs could reach 14 Bcf/d by 2030. PIRA sees fleet and heavy duty vehicle markets as the most viable and compressed natural gas (CNG)-powered vehicles as the potential winners. In contrast, PIRA is lukewarm toward liquefied natural gas (LNG) as a transportation fuel. The interdependency of the two crucial needs -- vehicles and fueling stations -- make the future [for LNG vehicles] problematic, according to PIRA, although it does conclude that the private sector appears to be responding to the chicken-egg situation "without help from the federal government, which previously looked essential."
Naturally occurring methane in New York water wells could serve as a baseline to measure the quality of the water supply if and when natural gas drilling is expanded and high-volume hydraulic fracturing (fracking) is allowed, the U.S. Geological Survey (USGS) said in a report. New York Gov. Andrew Cuomo is expected to announce any day a decision about whether to allow more gas drilling to proceed. The brief, done in cooperation with the New York Department of Environmental Conservation, "presents a compilation of data on dissolved methane concentrations in the groundwater of New York" available from the USGS National Water Information System. Most of the methane levels in the water wells (91%) either registered no dissolved methane or had levels below the threshold that would require monitoring. The rest of the wells sampled (9%) indicated methane levels that were high enough to warrant monitoring or steps "to avoid possible explosive conditions," the USGS said.
Pioneer Natural Resources Co. plans to sell its Barnett Shale properties, where it has accumulated about 155,000 gross acres, with about two-thirds in the liquids-rich Barnett Shale Combo and one-third in the dry gas area. Pioneer has grown production to about 7,000 boe/d, of which 55% is liquids and 45% is dry gas. "The sale of our Barnett Shale properties will allow us to strategically reallocate capital to our higher-return, core assets in the Spraberry vertical play, the horizontal Wolfcamp Shale play and the Eagle Ford Shale," said CEO Scott Sheffield. Proceeds would be used to reduce debt.
Pennsylvania State Rep. Jesse White (D-Cecil) has introduced HB 2606 and HB 2607 to amend the state constitution and make the secretary of the Department of Environmental Protection a commissioner post elected by the public, rather than one appointed by the governor. White's district includes Cecil, Mount Pleasant and Robinson townships in Washington County, and part of South Fayette Township in Allegheny County. All are plaintiffs in the legal challenge to Act 13, Pennsylvania's new omnibus Marcellus Shale law (see related story).
The Pennsylvania Department of Environmental Protection (DEP) is preparing to host several half-day seminars this fall to educate parties on applying for $20 million in grants over the next three fiscal years toward the purchase of natural gas vehicles or the conversion of eligible vehicles to natural gas (see NGI, Feb. 13). The agency may begin accepting grant applications before the end of the year. Vehicles eligible for the grant program must weigh at least 14,000 pounds and can be dedicated compressed natural gas, liquefied natural gas or bi-fuel vehicles. Grants are capped at 50% of incremental purchase and retrofit costs, at $25,000 per vehicle. Eligible applicants include Commonwealth or municipal authorities, the Pennsylvania Turnpike Commission, nonprofits, for-profit companies, local transportation organizations and state-owned or state-related universities; individual private citizens are not eligible. The first seminar will be held Fri. Sept. 14 at 8 a.m. at the Radisson Hotel Harrisburg in Camp Hill.
Sioux Falls, SD-based NorthWestern Energy Corp. has purchased operating and nonoperating natural gas production interests in Montana's Bear Paw Basin from privately held, Houston-based NFR Energy LLC for $19.5 million. NorthWestern acquired about 600 producing wells and two connected pipeline gathering systems with more than 400 miles of pipe spread over four counties in the north-central part of the state (Blaine, Choteau, Fergus and Hill counties). Net proven developed producing reserves purchased by NorthWestern are estimated to total 13.4 Bcf, and the net production attributable to the purchased assets this year will be about 1.6 Bcf, or about 8% of NorthWestern's current annual utility gas load in Montana, the company said. The acquisition is expected to provide natural gas to ratepayers at a cost of less than $4.00/Dth for at least five years, NorthWestern said.
Dallas-based Mesa Energy Holdings Inc. has leased 1,525 net acres in Garfield and Major counties, OK, and has closed on a farmout agreement with Twenty/Twenty Oil & Gas Inc. covering 1,720 net acres that are held by production. The Twenty/Twenty transaction also includes the outright purchase of three vertical Mississippian Lime wells, which would be operated by Mesa Midcontinent LLC, the company's Oklahoma operating subsidiary. Mesa said it expects to begin a drilling program in late 2012 or early 2013. The leases are generally for three years with subsequent option periods. The company said it is leasing additional acreage in the play and pursuing agreements to acquire acreage held by production. The company's acreage position is referred to as the Turkey Creek Project.
Corridor Resources Inc. and partner Petrolia Inc. are conducting a three-part exploration program on Anticosti Island in the Gulf of Saint Lawrence to advance the "exploration and development potential of the vast shale oil prospect" on the 3,050 square-mile island, Corridor said. The Halifax, NS, junior producer plans to drill three stratigraphic coreholes through the highly prospective Macasty Formation at locations across the island, analyze extensive well core and cuttings samples, and undertake a baseline study of the Anticosti groundwater system this year, with final analytical results due in 2013. The announcement came more than a year after Sproule Associates calculated liquids and gas equivalent to 19.8-48.2 billion boe in 2,343 square miles (6,092 square kilometers) of mineral hunting licenses that Corridor and Petrolia hold on the island (see Shale Daily, July 18, 2011).
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.