The Federal Energy Regulatory Commission approved the requests of Wyoming Interstate Co. (WIC) Questar Overthrust Pipeline and Rockies Express Pipeline (REX) for temporary waivers of capacity-release regulations, clearing the way for the permanent release of off-system capacity held on WIC’s pipeline to certain shippers. The capacity-release transactions are a one-time basis only and have to be done within 90 days. WIC currently holds 200,000 Dth/d of off-system capacity on REX and has three transportation agreements for capacity on Questar Overthrust to provide shippers on its system seamless transportation service. A breakdown of the agreements held by WIC on Overthrust includes 365,000 Dth/d through 2017; 190,00 Dth/d from November 2018 to September 2020; and two contracts for 120,000 Dth/d and 40,000 Dth/d, both of which run through 2020, according to Overthrust’s waiver request. WIC is proposing to release permanently all or a portion of the reserve capacity that it holds on Overthrust. With respect to the capacity on Overthrust, WIC told FERC it has encountered unexpected nominations and scheduling issues that have affected the quality and reliability of service received by WIC shippers. After “actively collaborating” to resolve the issues, “WIC states both pipelines [it and Overthrust] have agreed that the ideal solution is to permanently release WIC’s Overthrust capacity to the respective shippers on whose behalf WIC acquired the off-system capacity.” Three shippers have expressed an interest in a permanent release of the Overthrust capacity: Occidental Energy Marketing Inc., Marathon Oil Co. and WPX Energy Inc, according to WIC [RP12-1018].”Two of these shippers, Occidental and Marathon, also rely on REX off-system capacity, which WIC acquired on their behalf.

Carrizo Oil & Gas Inc. is forming a joint venture (JV) in the Niobrara formation with Haimo Oil & Gas LLC, a unit of China’s Lanzhou Haimo Technologies Co. Ltd., in which Haimo would acquire an undivided interest in about 6,000 net acres primarily in Weld and Adams counties, CO, along with associated infrastructure and production of about 185 boe/d for a cash payment of $27.5 million. The property sale is to be effective Oct. 1, 2012, the same effective date of Carrizo’s separate Niobrara JV with OIL India (USA) Inc. and IOCL (USA) Inc. After closing of the transactions late in the fourth quarter, the joint venture interest ownership participation in Carrizo’s Niobrara development activities will stand at 60% Carrizo, 30% OIL/IOCL and 10% Haimo.

Continued low prices for natural gas, which is the single largest source of revenue for Wyoming, have forced Gov. Matt Mead to ask state agencies to prepare budget cuts of up to 8%. A report issued by Wyoming’s Consensus Revenue Estimating Group (CREG) estimated that total state revenues for fiscal years 2013 and 2014 lag more than $30 million behind forecasts made in 2011. Contributing to the state’s revenue shortfall is the relatively low price of natural gas. Historically, gas prices have demonstrated some stability at about $4.00/MMBtu, and “there appears to be a consensus among intermediate and long term gas price forecasts around that pricing level,” CREG said. “The larger and more complex question is the timing markets will require to return to that level.” The group also estimated Wyoming’s natural gas production at 2.27 Tcf in 2012 and again in 2013, with a 2% increase expected in 2014 (2.32 Tcf) and 2015 (2.36 Tcf). “The increase in production is aligned with the anticipated return to $4/MMBtu natural gas in CY 2014,” CREG said.

The West Virginia Department of Revenue (DOR) has decided not to assign assessed value to oil and natural gas wellpad sites, heeding the advice of a special committee of county assessors that doing so would pose a hardship to farmers who own surface, but not mineral, rights to their land. Ohio County Assessor Kathie Hoffman said the state had initially suggested wellpads be carved out — a process known as a “county court split” — into parcels at least five acres in size and valued at $5,000/acre. A typical wellpad would therefore be appraised at $25,000. For reporting purposes, the wellpad would be in the state’s Class 3 tax category, and the other property would remain at Class 2. But the committee was concerned farmers would be impacted if they had to pay an extra $25,000 a year in taxes and the possibility that farmers could lose Class 2 tax status or a tax exemption from farming, which requires at least $500 of income from farming on at least five acres of land, or $1,000 of farming income from more than five acres. According to the rates of levy by the West Virginia State Auditor, the tax rate for 2012-13 is 50 cents/$100 of valuation for Class 2 property, and $1.00/$100 for Class 3 property. County, municipal and school district tax rates also double from one class to the other.

NiSource Inc. is proceeding with its East Side Expansion project on its Columbia Gas Transmission system for up to 310,000 Dt/d of additional capacity to carry Marcellus Shale gas to the East Coast and mid-Atlantic region. NiSource Gas Transmission & Storage (NGT&S) said the project involves adding capacity on Columbia to connect northern Pennsylvania production to eastern markets. The project calls for new pipeline capacity along an existing pipeline system, adding compression to an existing compressor station and enhancing interconnects with Millennium Pipeline at Columbia’s Wagoner metering station and with Tennessee Gas Pipeline at Milford compressor station. Construction is expected to begin in early 2015 for in-service late that year.

Oregon Sen. Ron Wyden, the Democrat who’s next in line to chair the Senate Energy and Natural Resources Committee, has called on Energy Secretary Steven Chu to explain the “actual decision-making criteria” that the Department of Energy (DOE) will use in making its determinations on applications to export liquefied natural gas to foreign countries. In a letter to Chu, Wyden said he wanted “an all-inclusive description of the factors that [the] DOE will consider in determining whether to approve a supplier’s authority to export LNG, and what factors DOE will consider in revoking such authority,” If Democrats maintain control of the Senate, Wyden is next in line to chair the Senate Energy and Natural Resources Committee.

About 4.5 miles of Pacific Gas and Electric Co. (PG&E) natural gas pipeline segments in Alameda, Contra Costa and Santa Clara counties in Northern California may not have undergone integrity assessments prior to Dec. 17, 2007, as required by federal law, PG&E said in a letter sent to the California Public Utilities Commission (CPUC). PG&E said it recently discovered that it does not have documentation to show that the high-risk segments — defined as having a threat caused by corrosion, excavation-induced damage or material defects — were properly assessed for internal corrosion threat. “Accordingly, PG&E is treating these segments as requiring baseline assessments.”

Enbridge Inc. and Encana Corp. have struck a midstream services deal to develop gas gathering and compression facilities in the Peace River Arch (PRA) region in northwestern Alberta with Enbridge acquiring Encana facilities in the region currently in service and under construction; the expected closing date is December. Once the facilities are completed in 2013 Enbridge’s total investment in the PRA region is expected to be $264 million. Terms of the midstream services agreement are to parallel terms reached between the companies in 2011. Enbridge is also working with Encana on facility scoping to develop more midstream facilities in the region. Separately, Enbridge and other owners of the Cabin Gas Plant development have deferred commissioning of Cabin Phase 1 and construction of Cabin Phase 2.

By 2021, the Eagle Ford Shale could produce nearly $62.1 billion in output, support about 82,600 full-time jobs, add nearly $34 billion in gross regional product and about $888 million to local government revenues and $1.6 billion to state revenues, according to a studies of 14 South Texas counties comprising the Eagle Ford area. A study of counties with active drilling prepared by the Center for Community and Business Research at The University of Texas at San Antonio found that in 2011 companies operating in the region had significant impacts that translated into more than $19.2 billion in output, 38,000 full-time jobs supported, close to $10.5 billion in gross regional product, $211 million in local government revenues, and $312 million in state revenues. From 4Q2009 to 4Q2011 employment in the 14 counties increased by 14,237 jobs, a 9.2% increase, more than double the employment growth in the state of Texas.

Gulf Coast LNG Export LLC was granted permission by the U.S. Department of Energy to export up to the equivalent of 1,022 Bcf/year of liquefied natural gas (LNG) to parties under a free trade agreement (FTA) with the United States for a 25-year term from its proposed terminal in Brownsville, TX. Separately, Cheniere Marketing LLC was granted permission to export up to the equivalent of 767 Bcf/year for a 25-year term from the proposed Corpus Christi Liquefaction Project in Texas. DOE recently updated the list of applications it has received for authorization to export LNG from the Lower 48 states. The volume represented by FTA applications is 27.58 Bcf/d. The volume represented by non-FTA applications is 21.06 Bcf/d. Eighteen would-be exporters are represented on the list.

New Jersey Natural Gas (NJNG) has received approval from the New Jersey Board of Public Utilities to implement its Safety Acceleration and Facility Enhancement (SAFE) program over the next four years to replace 276 miles, or about 50%, of the cast iron and unprotected steel mains and associated services in its delivery system. Excluding third-party damage, the aged infrastructure accounts for more 95% of all leaks found within NJNG’s system. NJNG will seek to recover its $130 million of investments in SAFE replacements. The spending would be subject to review in NJNG’s next base rate case, which is to be filed by November 2015.

BP plc plans to share technical information used to build its deepwater well-capping equipment with the exploration and production (E&P) unit of Mexico’s Petroleos Mexicanos (Pemex). Under the technology license agreement, BP would make available technical information that Pemex E&P may use, in addition to initiatives already in place, if it decides to build and maintain a well-capping system for use in the Gulf of Mexico’s Mexican waters. BP plans to share the information on the capping stack at no cost, and Pemex E&P has agreed to make any future advancements to the well-capping technology available at no cost to BP. BP would retain intellectual property rights. In addition, BP agreed to conduct workshops in Houston to brief Pemex technical teams on the information and operational aspects of the system, as well as to introduce the company’s E&P specialists to vendors and fabricators that BP used to develop its well cap and tooling package.

A record percentage of New Yorkers now support hydraulic fracturing (fracking), according to figures from a Siena College Research Institute poll. Forty-two percent of respondents said they supported the New York Department of Environmental Conservation formulating rules to govern high-volume fracking, a record high. Conversely, 36% were opposed, which was the same as a Siena poll in May. Only 23% had no opinion, didn’t know or didn’t have enough information, another low for the poll. Fracking continues to enjoy support among Republicans (60-23%) and independents (41-36%), but was opposed by Democrats (42-34%). Fracking enjoyed support in New York City (40-32%), the suburbs (44-33%) and upstate (43-41%). In August a Sienna poll found that 48% of upstate respondents opposed it, while 39% of New York City voters supported them (see NGI, Aug. 27).

Australia’s Amadeus Energy Ltd. plans to acquire Fort Worth, TX-based Lonestar Resources Inc. — a player in the Eagle Ford, Bakken and Barnett shales — via the purchase of Lonestar’s holding company, Ecofin Energy Resources plc of the United Kingdom. The deal requires the approval of Amadeus shareholders. Perth-based Amadeus owns proved and producing oil and gas fields and exploration leaseholds in 21 counties and parishes in Louisiana, Oklahoma and Texas.

Cheniere Energy‘s Sabine Pass liquefied natural gas (LNG) export project in Louisiana could be expanded by 50% as global demand for U.S. LNG increases, Nicolas Zanen, Cheniere vice president of trading, told Bloomberg, “When we marketed the project at Sabine Pass, clearly we had more demand than we could satisfy. It makes sense to look at expanding to a fifth and a sixth” liquefaction train. Spokesman Andrew Ware confirmed the remarks and said there was no timeline for a potential expansion at Sabine Pass. Cheniere’s Sabine Pass Liquefaction LLC recently struck agreements with Total Gas & Power North America Inc. to gain access to Total’s natural gas sendout capacity provided under its terminal use agreement with Sabine Pass LNG LP.

EFL Overseas Inc. (EFLO) has acquired from Nahanni Energy Inc. additional rights and interests in the Liard Basin natural gas field and facilities in the Kotaneelee area of the Yukon Territory, the Houston-based company said. EFLO paid Nahanni $398,550 in cash, and shares of one of its subsidiaries valued at about $4.19 million, for a 30.67% interest in the Kotaneelee Gas Project (KGP). The deal made EFLO the largest interest holder in the project, with a 53.67% general interest and a 100% working interest in one gas well. In July EFLO acquired an interest in the project from Devon Energy Corp.‘s Canadian unit (22.99% general interest and a 69.34% working interest in one gas well) for $289,295. The KGP covers 30,188 gross acres and includes a gas dehydration plant, a gas well producing on average 3.5 MMcf/d, a water disposal well and two suspended gas wells. The KGP has a fully developed gas gathering, sales and delivery infrastructure, airstrip, roads, flarestack, storage tanks, barge dock and permanent camp facilities, EFLO said. Kotaneelee is currently the only producing field in the Yukon Territory, according to the provincial government’s Energy, Mines and Resources agency.

U.S. Rep. Andy Harris (R-MD) has called on the Federal Energy Regulatory Commission to approve Dominion Cove Point’s proposed liquefied natural gas (LNG) liquefaction facility in Lusby, MD, “without delay,” noting that it has “significant merits and warrants swift approval.” The Cove Point export project “will provide very significant benefits for the entire mid-Atlantic region, the state of Maryland, the first congressional district of Maryland which I…represent, and the nation as a whole.” The project is at the center of a pending legal dispute (see NGI, May 21; April 30). Dominion Cove Point LNG has received approval to export LNG to free trade agreement (FTA) countries and is awaiting action on its request to export to non-FTA markets.

The Pennsylvania Public Utility Commission (PUC) voted 5-0 to issue a final rulemaking order for marketing and sales practices used by natural gas suppliers. The PUC said the final rulemaking adds to interim guidelines that were adopted on Nov. 6, 2011. According to documents filed with the order (No. L-2010-2208332), the rulemaking addresses door-to-door sales, telemarketing, consumer protection and customer complaints. Other topics include customer authorization of account transfers, transactions, verifications and documentation, receipt of disclosure statements, the right to rescind transactions and notification regarding marketing or sales activity. The rulemaking also outlines changes to supplier liabilities for their agents, agent qualifications and standards, criminal background investigations for agents, and agent training, compensation, discipline, identification and misrepresentation.

The City of Weirton, WV, has enacted a 6% business and occupation (B&O) tax on natural gas companies operating within the city limits, reportedly to raise revenue to fix roads and bridges that could be damaged by drilling there. Municipalities (towns and cities, not counties) may impose the tax, with the maximum municipal rate for natural gas production at 6%. According to the West Virginia Department of Environmental Protection (WVDEP), Chesapeake Appalachia LLC is permitted for two wells in Weirton.

Two environmental groups have protested Honolulu, HI-based The Gas Co. LLC’s (TGC) application to transport liquefied natural gas (LNG) to Hawaii from the U.S. mainland. Sierra Club said it opposes TGC’s request for the Federal Energy Regulatory Commission to review only the first phase of the three-phase project and has asked the Commission to prepare an environmental impact statement on all phases of the proposal. Honolulu-based Blue Planet Foundation advocates contend that TGC’s plan would reverse Hawaii’s trend away from fossil fuels.

Dominion Resources Inc. plans to close and decommission its 556 MW Kewaunee Power Station in Carlton, WI, after failing to find a buyer for the facility and because of continuing low natural gas prices. The Richmond, VA-based company said that after an inspection by the Midwest Independent Transmission System Operator, the plant will cease power production in 2Q2013 and move to a safe shutdown, remaining under the oversight of the Nuclear Regulatory Commission throughout the decommissioning process. Dominion said it would take an after-tax charge of $281 million in 3Q2012 for the costs.

New York Department of Environmental Conservation (DEC) Commissioner Joseph Martens said a panel of outside experts that will help Health Commissioner Nirav Shah conduct a health impact analysis of high-volume hydraulic fracturing (HVHF) in the state are not yet under contract. “Dr. Shah has contacted several well-known experts in the field who are familiar with the hydrofracking process and are familiar with health assessments,” Martens told reporters on Oct. 19, adding that it was still possible that the DEC will make a Nov. 29 deadline to complete the rulemaking process for HVHF (see NGI, Oct. 8). Last month, Martens said he anticipated an eventual legal challenge to any rules the agency creates and asked Shah to conduct an analysis (see NGI, Sept. 24).

A coalition of 14 environmental groups, including Clean Water Action, Delaware Riverkeeper Network and Sierra Club, has asked Pennsylvania Gov. Tom Corbett to reverse a Department of Environmental Protection (DEP) policy that requires field offices to advise DEP of their intent to acknowledge water contamination related to Marcellus Shale gas well operations before notification letters are sent to potentially affected homeowners. The policy change has done nothing to delay notifications to homeowners, according to DEP spokesman Kevin Sunday. “There has been no change or delay to our communication with homeowners whose well water may have been impacted by drilling. We provide homeowners with sample results as we get them and are in continuous communication throughout our investigations…It is unreasonable to assert that DEP management should not be aware of these matters, and it would be bad management for them not to be.” The policy change went into effect Sept. 14.

Houston-based Oil and Gas Solutions LLC (OGS) has been awarded an engineering contract by Austin, TX-based Omni Water Solutions Inc. to design Omni’s new HIPPO mobile water treatment system, which would be used to treat and recycle high volumes of water used in hydraulic fracturing. OGS said the system would be a modularized unit that would fit onto a conventional low-boy trailer for easy transport.

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