EEX Corp. has entered into an asset purchase, farmout and joint exploration agreement with BP Exploration & Production Inc. BP acquired 75% of EEX’s current interest in 23 outer continental shelf (OCS) leases. Under the agreement, BP said it will conduct further leasing and geophysical activities in an area encompassing 140 OCS blocks. At the end of the initial evaluation period, BP may elect to commit to the drilling of up to three wells. The agreement also allows for EEX to be carried for its 25% interest of the costs of the initial evaluation period as well as the drilling of the first three exploration wells. Both companies said they are interested in pursuing exploration prospects in shallow waters of the Gulf of Mexico that EEX identifies as “deep shelf,” geological formations that are deeper than conventional Gulf of Mexico OCS oil and gas exploration and production. The companies were successful bidders on six federal offshore blocks at OCS Lease Sale No. 182 held in March, which are included in the agreement. The Minerals Management Service has awarded four of the blocks to date. EEX is an oil and natural gas exploration and production company with activities currently focused in Texas, Louisiana and the Gulf of Mexico.

FERC has granted Columbia Gas Transmission a certificate and related pipeline abandonment authority for a $41 million pipeline lateral and mainline expansion to serve the proposed Mantua Creek Power plant, which PG&E’s National Energy Group is building in Gloucester County, NJ. The pipeline project will involve the addition of 12,000 hp of compression at two Pennsylvania stations, Eagle and Downingtown, and construction of about 30 miles of various diameter pipeline, some of which will replace existing lines that are being abandoned. The mainline construction will cost about $35.3 million and the lateral will cost an additional $5.4 million. The new pipeline facilities will deliver up to 165,000 Dth/d of gas to the 803 MW power plant. Columbia plans to charge Mantua a discounted firm transportation charge of $3.74/Dth for mainline service and $0.4502/Dth for lateral service. FERC said since the project rates will result in revenues exceeding costs and will require no increase in systemwide rates, a rolled in rate design was approved for the mainline portion of the expansion. The commission said it was convinced existing Columbia customers would not be “adversely affected” and the impact on landowners would be “minor.” The Mantua power project, a natural gas-fired, combined cycle electric generating station in West Deptford Township, NJ, is scheduled for completion this summer. The plant is expected to deliver power into the Pennsylvania-Jersey-Maryland power grid via local PSE&G and Conectiv Energy lines.

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