The Dallas-based Inter-American Development Bank (IADB) said Thursday that it will formally review Peru LNG’s request for a direct loan of $400 million for the development of a liquefied natural gas (LNG) export project in Peru. The project would deliver LNG to regasification terminals on Mexico’s West Coast and potentially to the U.S. West Coast starting in 2010. Hunt Oil, Spain’s Repsol and Korea’s SK Corp. are partners in the project, which would be located in Pampa Melchorita, Peru. The total investment in Peru LNG is expected to reach up to $3.2 billion. The project will take 620 MMcf/d of natural gas from the Ayacucho Mountains through a 250-mile, 32-inch diameter pipeline to the single-train liquefaction plant on the coast south of Lima, where it will be put into tankers bound for the western seaboard of North America. The Camisea E&P project has 8.7 Tcf of estimated reserves and adjacent development is expected to access another 3.5 Tcf of reserves. Gas production will likely exceed domestic demand for the foreseeable future, so project sponsors would like to export any excess to the North American West Coast.

The New York Mercantile Exchange (Nymex) said Thursday that after-hours physically delivered energy futures contracts will make the migration from its Access system to CME Globex beginning on Aug. 6 for trade date Aug. 7. Nymex also announced margin increases for natural gas related contracts. Nymex said the electronic trading hours and trade date for after-hours physically delivered energy futures contracts will be modified to reflect the trade date change that occurs daily on CME Globex at 5:15 p.m. EDT. Following the migration, the after-hours trading session that will occur between the close of the trading floor and the close of the business day on CME Globex (3:15 p.m. to 5:15 p.m. EDT for the energy futures contracts and 2 p.m. to 5:15 p.m. EDT for the platinum and palladium futures contract) will be considered part of the current trade date. Trading for the next trade date will begin with the reopening of CME Globex at 6 p.m. EDT Sundays through Thursdays. Nymex said all exchange-defined calendar spreads, strips, and physical-to-physical inter-commodity spreads (RB:CL, HU:CL, HO:CL, HU:HO, HU:RB, RB:HO) will follow the same trading hours as their respective outright products above. As for margin changes, Nymex increased margins for its natural gas, Henry Hub swap, Henry Hub swing swap, and Henry Hub penultimate swap futures contracts, as well as its natural gas penultimate, natural gas last day, and Nymex miNY natural gas futures contracts that trade on CME Globex, beginning at the close of business last Friday.

Earlier in July as power demand and prices began to peak, Tucson, AZ-based UniSource Energy Services (UES) forewarned its natural gas customers in the northern part of Arizona about the likelihood of higher gas utility bills this winter. Per-therm gas costs could rise to $1.32 in November, drop back and then rise again to about $1.37/th in March of next year, UES announced. The utility, which owns Tucson Electric Power (TEP), filed a request with state regulators this month for a 7%, or $9.6 million, general rate increase. UES proposes to increase its gas utility customer monthly service charge from $7-11/month, during the heating months of December through March. Estimating a December bill at about $148, UniSource said there would be no profit increase for the utility in the rate hike. Any eventual increase in charges for distribution service would not take effect until August 2007, UES said. Projected winter bill increases reflect higher wholesale natural gas prices, although market prices have fallen so far this year, UES said. “The [prices] remain above historic levels due to increased demand from homeowners, factories and gas-fired electric power plants,” the company said.

Pittsburgh-based independent Linn Energy LLC said it paid Blacksand Energy LLC $291 million for about 31.3 million boe of proved oil reserves located in the Los Angeles Basin and paid Kaiser-Francis Oil Co. $125 million for 55 Bcfe of proved Midcontinent gas reserves. The Blacksand assets located in the Brea Olinda Field in Orange County, CA, include 270 producing wells and are 90% crude oil. The Kaiser assets, located in North Central Oklahoma, include 411 producing wells and are 84% natural gas. The purchases will substantially diversify the company’s assets, which currently are located primarily in the Appalachian Basin and are 99% natural gas. Linn said it expects to increase it annual cash distribution to $1.72/unit beginning in the third fiscal quarter and plans to recommend another distribution increase in the fourth quarter.

Louis Dreyfus Pipeline LP. said Tuesday that it has started construction of a 33-mile extension of its natural gas liquids (NGL) pipeline into the Barnett Shale producing region in Texas and has initiated the permitting process to build a second NGL pipeline from its current Hull, TX destination to the Mont Belvieu natural gas liquids hub. When completed in the fourth quarter of 2006, the eight-inch Barnett Shale lateral pipeline will connect to multiple gas processing facilities in and around Johnson County, Louis Dreyfus said. It will have a daily NGL capacity in excess of 45,000 barrels and deliver the NGL into the existing Louis Dreyfus Pipeline system near Walnut Springs, TX. The Hull to Mont Belvieu extension should start construction in November, according to the company. When completed, the 31-mile pipeline will provide direct access to the Mont Belvieu NGL hub. Louis Dreyfus said the 12-inch pipeline is anticipated to be operational by the first quarter 2007 and will have a capacity of more than 120,000 b/d. Joe Rothbauer, vice president of midstream operations for Louis Dreyfus, said the pipelines will provide incremental NGL take-away capacity that is important for continued Barnett Shale development.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.