Gulfstream Natural Gas System received the first shipment of pipe for construction of its 753-mile natural gas pipeline system. The pipe was delivered to Liberty Port in Mobile, AL, and transported to a concrete weight coating facility in Theodore, AL. “This is the largest pipeline project in the Gulf of Mexico. When you see this first shipment of pipe arrive — all 23,000 tons of it — and realize we still have 12 more shipments coming, it underscores just how enormous this project really is,” said Nancy Schultz, Gulfstream senior vice president and general manager, technical functions. “It is exciting to have reached this milestone, which marks the imminent start of physical construction.” The pipe, purchased from Berg Steel Pipe Corporation in Panama City, Fla., arrived by ship from Bremen, Germany, where it was manufactured by Berg’s parent company, Europipe. Each section of 36-inch diameter pipe, with a wall thickness of up to 1.375 inches, is 40 feet in length and weighs up to eight tons. One hundred seventy two miles of 36-inch pipe will be stored in Alabama until the scheduled start of construction in June. Additional steel pipe manufactured at Berg’s pipe mill in Panama City, Fla., is scheduled to be delivered to Port Manatee, Fla., on May 28. The pipeline is sponsored by Williams and Duke Energy and was approved by FERC in February. It will extend from Mississippi and Alabama across the Gulf of Mexico to Florida.
To increase its Permian Basin holdings, Dallas-based Pioneer Natural Resources Co. has proposed merging subsidiary Pioneer Natural Resources USA Inc. (Pioneer USA) and its 46 Parker & Parsley limited partnerships. The deals, with a total value of approximately $102 million, would allow the independent to acquire working interests in wells located in the Spraberry field of West Texas, further consolidating its operations there. Under the proposal filed with the Securities and Exchange Commission, Pioneer would pay 25% in cash and the remaining 75% in shares of common stock. The purchase price would be allocated among the limited partners as though the partnerships had sold their assets and liquidated their partnership agreements. Pioneer will pay an amount for the partnership interests based on the partnerships’ oil and natural gas reserves values and net working capital as of March 31, 2001. Pioneer has not set a minimum number of partnerships that would have to participate to complete any of the mergers, and it is the sole or managing general partner of all the partnerships now. If approved, Pioneer expects the deals to close by mid-summer.
NW Natural, based in Portland, OR, has signed natural gas service agreements for power generation with Clark Public Utilities in Vancouver, WA and Wah Chang, a specialty metal and chemical manufacturer based in Albany, OR. Under the one-year agreement effective July 1, NW Natural will provide about two-thirds of the natural gas transportation service to Clark for temporary generators it is leasing to fill a power supply gap this summer. Clark’s temporary generators will produce about 50 MW of electricity in the next year. The one-year agreement with Wah Chang, which begins within the next month, will allow the company to power natural gas reciprocating engines for up to 14 MW of electricity.
Construction is on schedule for a natural gas-fired merchant power plant being built by a subsidiary of Constellation Energy Group in Rockland Township, PA. The Handsome Lake plant is set to begin commercial operation this July. The peaking plant, which will provide 250 MW of electricity to regional wholesale power markets during times of peak energy demand, is one of four such plants under construction in North America for Constellation Energy Group. The others are located in Illinois, Virginia and West Virginia. When all four plants are completed, they will add 1,100 MW of electricity to Constellation Energy Group’s domestic generation portfolio and support the company’s power marketing and trading business. In addition to the four peaking plants due to come on-line this summer, Constellation Energy Group is building four other merchant power plants scheduled to begin commercial operations over the next two years. Those plants are under construction in California, Florida, Illinois and Texas.
The Louisiana Public Service Commission approved Atmos Energy’ acquisition of the assets of Louisiana Gas Service Co. and LGS Natural Gas Co. from Citizens Communications. Louisiana Gas serves 279,000 gas distribution customers and is headquartered in Harvey, LA. LGS Natural is an intrastate pipeline that provides gas transportation to industrial customers in portions of Louisiana. Atmos expects to complete the $365 million acquisitions by June 30. The acquisition is expected to add $0.02 – $0.06 per diluted share in the first full year of operations. Upon completion, Atmos will become the largest gas distributor in Louisiana and the 5th largest pure gas utility in the United States. Atmos will serve 1.4 million customers in 11 states, including 359,000 customers in Louisiana.
Corridor Resources Inc. announced that flow testing of the McCully No. 2 well located northeast of Sussex, New Brunswick, Canada has been completed. The test resulted in a stabilized natural gas flow rate of 2.2 MMcf/d at a flowing tubing head pressure of 2,100 pounds per square inch (psi) following a three-day flow period. Corridor said initial analysis of the well’s production performance indicates that it is capable of flowing gas at a rate of 4.1 MMcf/d at the design separator pressure of 400 psi. The McCully No. 2 well is currently shut- in for pressure build-up analysis. The well’s development is under a 50/50 joint venture partnership with the Potash Corp. of Saskatchewan Inc., with Corridor acting as the operator. Following completion of testing operations at the McCully No. 2 well, Corridor plans to workover, re-complete and re-test the McCully No. 1 well. The company said it also plans on completing the third McCully well by late May. Corridor is a junior oil and gas exploration company, headquartered in Halifax, Nova Scotia, with interests onshore in New Brunswick, Prince Edward Island and Quebec and offshore in the Gulf of St. Lawrence.
The Department of Interior’s Minerals Management Service (MMS) has engaged a consulting firm to help improve the agency’s eGovernment program, streamlining its efforts by linking with its stakeholder communities and exchanging data and transacting business via the web. Much of the program office’s current processes are paper intensive, and include overlapping data collection. Booz·Allen & Hamilton, a global management and technology consulting firm, has teamed with Houston-based Petris Technology, Inc., a web-based data management and eBusiness solutions provider focused on the oil and gas industry, to carry out the project.
In an era when whales and snails get better press, two groups dedicated to capitalism are using the impending celebration of Earth Day to point out the importance of the earth’s resources to human beings. Promoting the “moral case for exploiting the Artic National Wildlife Refuge (ANWR),” the Center for the Moral Defense of Capitalism (CMDC) and the Ayn Rand Institute (ARI) are scheduling a news conference Friday in Washington in advance of their own Earth Day celebration at the Washington Monument April 22.”The goal of the environmentalists is to save the earth from man, while the goal of the industrialists is to exploit the earth for man,” the two said in announcing the briefing at 9 a.m. Friday at the National Press Club. “Oil is the very lifeblood of modern civilization. As oil is drained from the arteries of American commerce by environmentalists, we lose the energy to sustain human life: to heat our homes, to harvest our fields, to transport food, or to light the laboratories that help save the lives of countless millions,” said Nick Provenzo, chairman of the CMDC. “Restricting the production of oil for the sake of keeping a vast wilderness frozen is an immoral attack on human life.” ARI, based in Moreno del Rey, CA (www.aynrand.org), takes its name from the author of the classic defenses of capitalism, “Atlas Shrugged” and “The Fountainhead.”
Provident Bank and its subsidiary, Information Leasing Corp. (ILC), have announced the establishment of PFG Energy Capital,, a specialized energy financing group. This new business unit will provide creative and unique financing solutions to energy management/efficiency equipment and systems vendors along with vendors of distributed generation equipment. William J. Garnett and Henry K. Lee, joining PEG Energy Capital from the federal and commercial leasing division of Academic Capital Group, Inc. will lead ILC’s new venture as senior vice president and vice president, respectively. PEG Energy Capital will be based in Pasadena, CA. It offers financial solutions for all types of projects designed to reduce energy operating costs and achieve environmental goals without large, up-front capital costs. “The current energy crisis in the western United States has heightened the country’s awareness that energy conservation and efficiency are of the utmost importance. By providing creative financing solutions to our clients, we can help reduce the demand for energy consumption,” Garnett said.
Sempra Energy reported Monday that it has signed a five-year information technology (IT) outsourcing agreement with Computer Sciences Corp. (CSC) valued at more than $70 million. According to the companies, This contract, which extends to June 2006, replaces and significantly expands the current contract through which CSC provides service to Sempra Energy’s corporate headquarters and its San Diego Gas & Electric Co. (SDG&E) subsidiary, scheduled to expire in June 2001. Under the new agreement, CSC will manage the distributed computing infrastructure for additional units of Sempra Energy, including the Southern California Gas Company (SoCalGas). Altogether, CSC’s support of Sempra’s distributed IT operation encompasses approximately 10,000 desktops, 350 servers and enterprisewide help-desk support.
Electric restructuring in Ohio took a bite out of FirstEnergy Corp. earnings. The company reported net income for the first quarter was $106.2 million, or 49 cents per share, compared with $140.9 million, or 63 cents per share in 1Q2000. After adoption of new accounting standards for derivative transactions, net income was $97.7 million, or 45 cents per share of common stock. The Akron-based company said results are on track with annual earnings projections, which reflect higher amortization of transition costs during the first quarter as a result of the company’s rate plan under Ohio’s new deregulation law. For the year, total transition cost amortization is expected to be lower than last year’s accelerated cost amortization under the former regulatory rate plans for the company’s operating subsidiaries. Consolidated generation kilowatt-hour sales increased 13.1% for the quarter. Regulated distribution deliveries to residential customers rose 8.1%, and industrial sales gained 3.6%, while commercial sales were off 1.3%. Revenues were $2 billion, compared with $1.6 billion for the year-earlier quarter. FirstEnergy made significant progress in obtaining regulatory approvals of its proposed $4.5 billion merger with Morristown, NJ-based GPU, Inc. The merger still requires approvals from the Pennsylvania Public Utility Commission, the New Jersey Board of Public Utilities and the Securities and Exchange Commission. The transaction is expected to be immediately accretive to cash flow and earnings and produce other benefits, including cost savings of at least $150 million annually from the combination of operations. Upon completion, FirstEnergy will be the fourth largest investor-owned electric system in the nation, based on serving 4.3 million customers within 37,000 square miles of Ohio, Pennsylvania and New Jersey.
Connecticut Gov. G. Rowland hit the switch to start the production line at FuelCell Energy’s new manufacturing facility in Torrington, CT. The governor also announced the State of Connecticut’s intention to purchase a 250 kW Direct FuelCell power plant through the state’s Clean Energy Fund. The site of this power plant is to be determined. FuelCell Energy’s new 65,000-square foot facility will allow for the expansion of manufacturing capacity to meet near term demand for the company’s orders for commercial field trials that will be installed in locations worldwide in the coming year. The facility has the potential to expand to an annual production capacity of more than of 400 MW by 2004. “We’re committed to meeting our commercialization milestones and this facility puts us another step closer,” said Jerry D. Leitman, company president. Currently, FuelCell Energy employs 56 people in Torrington and 110 at its Danbury, CT, corporate and research headquarters.
Williams announced plans to develop a 1,230 MW gas-fired power plant near Fairburn, GA, to support a power supply deal the company signed with customers in the state. The plant is scheduled for completion in 2004. “This new facility will assist us in developing our growing portfolio of power agreements in Georgia,” said Bill Hobbs, president of Williams energy marketing. “We recently announced full-requirements power agreement with several Georgia Electric Membership Corporations and this new facility will strategically fit our plan to expand our power portfolio in this market, as well as all of the southeast.” The permitting is expected to take approximately one year to complete before construction of the plant will begin.
AltaGas announced that it is increasing its gas processing capacity by 20 MMcf/d with facility expansions at two of its operating areas. Capital investment in the projects is expected to total $8 million. The company will be increasing processing capacity in its Central Border operating area to 114 MMcf/d by expanding its Esther plant by 11 MMcf/d by the end of the second quarter. Exploration and production companies are very active in the Central Border area that straddles the Alberta and Saskatchewan border. The Esther expansion will be immediately filled by gas currently tied-in but not producing at capacity and from new gas discoveries. AltaGas also is in the process of applying to increase processing capacity in its Bantry area to 27 MMcf/d with an expansion of its Bantry sour gas plant and the construction of a 20-mile gathering pipeline. The project will tie-in a significant new gas discovery and is expected to be completed in the fourth quarter.
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