The Federal Energy Regulatory Commission (FERC) has authorized the transfer of certain natural gas distribution facilities in Kansas, Oklahoma and Texas from Oneok Inc. to ONE Gas Inc. as part of a company reorganization (CP13-550-000). The FERC order came three weeks after the board of directors on Wednesday unanimously approved the separation of the company's natural gas distribution business into ONE Gas, a stand-alone, publicly traded company (see Daily GPI, Jan. 8). ONE Gas would consist of Kansas Gas Service, Oklahoma Natural Gas Co. and Texas Gas Service, and be headquartered in Tulsa. It would be one of the largest natural gas utilities in the United States, serving more than two million customers in three states, and a 100% regulated, publicly traded natural gas utility. The plan to spin off the utility business was announced in 2013 (see Daily GPI, July 26, 2013). ONE Gas common stock is expected to begin "regular-way" trading on the New York Stock Exchange (NYSE) on Monday (Feb. 3) under the symbol "OGS."
Production has been delayed at Magnum Hunter Resources Corp.'s Stalder pad in Monroe County, OH, due to colder than normal temperatures in the state. Financial analysts had expected initial production (IP) results from the pad's first Utica well sometime last week (see Shale Daily, Jan. 15). Topeka Capital Markets said in a research note that those results could come as late as Feb. 6. Analysts with the investment bank said the well could come online with an IP rate in the 15-30 MMcf/d range. The well has been closely watched to date, as it's one of the play's largest thus far, designed to handle 10 Marcellus and eight Utica wells in the play's dry-gas window. In December, the company said liquids fallout and delays in the construction of gathering lines caused by cold weather was delaying some production in southeast Ohio and West Virginia (see Shale Daily, Dec. 20, 2013).
FERC said it had requested authorization by Southwest Gas Storage Co. to abandon in place a 1,110-horsepower compressor unit and related equipment at its Waverly Storage Compressor Station in Morgan County, IL (Docket No. CP14-46). The Federal Energy Regulatory Commission said Southwest wants to abandon the unit "because it does not anticipate needing it at its present location for the foreseeable future [and] it has become increasingly expensive to maintain." FERC said the unit has not been used for over twelve months, and that it would cost Southwest $8.5 million to replicate the compressor unit elsewhere. If no motion to intervene is filed with 60 days the proposal will be deemed authorized.
While the Pacific Northwest has experienced a number of recent proposals for major energy projects that could mean considerable economic benefits and added natural gas demand for the region, stakeholders are adopting a somewhat skeptical wait-and-see attitude, given that no construction on any of the major proposals has gotten under way. There are now two proposed liquefied natural gas (LNG) export projects in Oregon, two proposed methanol production plants in the state of Washington along the Columbia River, and oil/railroad transport facilities in north and south Washington. The newest proposal -- the methanol plants proposed by a Chinese company and a unit of BP plc -- drew skepticism from one Oregon-based energy stakeholder who questioned how serious the partners are. Nevertheless, natural gas industry and state economic development officials are expecting increasing industrial gas demand in the coming years whether or not the mega gas-hungry projects are ever built.