NRG Energy Inc. agreed to pay a $2 million civil penalty to resolve charges by the Commodity Futures Trading Commission (CFTC) that the Minneapolis-based company knowingly reported false information concerning natural gas trades to Gas Daily, an energy index reporting service published by Platts. The order resolves an action brought against NRG almost three years ago (see NGI, July 5, 2004). The consent order, filed in U.S. District Court for the District of Minnesota, included findings that, from at least August 2001 through May 2, 2002, NRG reported false information, including price and volume information, to the industry publication. According to the order, the reports contained trades that had not been executed, trades executed by NRG but with altered prices and/or volumes, and intra-day trades reported as next-day trades. The settlement followed a decision issued last year by the U.S. Court of Appeals for the Eighth Circuit, which ruled that the Minnesota district court, and not the Bankruptcy Court of New York where NRG had sought Chapter 11 bankruptcy protection in 2003, had jurisdiction over CFTC’s enforcement action (see NGI, Aug. 14, 2006). NRG had argued that the bankruptcy court retained exclusive jurisdiction over any legal actions.
Unable to sell its partially completed liquefied natural gas (LNG) import terminal in Point Tupper, NS, Anadarko Petroleum Corp. has taken a $111 million write-off and will mothball the Bear Head LNG Corp. project. Anadarko said it would sell the Bear Head subsidiary last year to U.S. Venture Energy, a private equity firm, but the transaction fell through in September (see NGI, Oct. 2, 2006). The project, which had been approved by Canadian regulators to begin service as early as 2008, could be revived if market conditions improve and LNG supply is secured, according to the Nova Scotia Utility and Review Board. A spokeswoman said the Bear Head site, on Cape Breton Island, has been improved and is ready for construction. The site includes 179 acres of land and a 67-acre water lot.
The Interior Department’s Minerals Management Service (MMS) last Wednesday took the first step in a process that is expected to culminate in oil and gas leasing in a small portion of the “181 Area” in the Eastern Gulf of Mexico Planning area. In a notice, published in the Federal Register, the agency put out a call for comments to develop a supplemental environmental impact statement (SEIS), which will update the environmental review that was completed in 2001 for the original 181 area. The area covered by the notice includes approximately 134 unleased blocks spanning 584,817 acres. The proposed sale, termed Lease Sale 224 and tentatively scheduled for March 2008, was mandated by a new law that gives producers access to virgin territory in the eastern Gulf. The sale area will be located more than 125 miles off of the Florida coast and west of the Military Mission Line. Comments on the proposed lease sale are due at the MMS by March 16.
Lodi Gas Storage LLC (LGS) is holding a nonbinding open season for firm capacity beginning in September 2008 in anticipation of expansion of its northern California facilities. The expansion is anticipated to add an incremental 12 Bcf of capacity, with 100,000 MMBtu/d of firm injection and 200,000 MMBtu/d of firm withdrawal. LGS intends to file an application for the expansion with the California Public Utilities Commission (CPUC) in early May. All services will be performed under LGS’ current CPUC Tariff Schedule FSS, a copy of which is available at www.lodistorage.com. Expansion service will be offered for two cycles per year; however, it can be customized. The open season started Friday and runs until March 15. Responses are due in the Lodi Gas Storage houston office no later than 3 p.m. CST March 15. Lodi currently provides the California market with 22 Bcf of working capacity, with 450,000 MMBtu/d of firm injection, and 550,000 MMBtu/d of firm withdrawal through interconnections with the PG&E 400 and 401 lines. For more information on Lodi’s open season, contact Lisa Reichel or Masoud Kasraian at (713) 600-4415 or (713) 600-4408.
DTE Energy’s unconventional natural gas business grew significantly in 2006, more than doubling Barnett Shale proved reserves and increasing Antrim Shale proved reserves by 31%, the company said last week. Detroit-based DTE said it boosted reserves, acreage and production levels last year as it expanded its unconventional gas production business. Revenue and earnings will be released Feb. 26. DTE is exploring the sale of a portion of its unconventional gas assets (see NGI, Nov. 13, 2006). The business in the Barnett Shale increased proven reserves to 174 Bcfe in 2006 from 58 Bcfe the previous year and increased net production to 16 MMcf/d from 4 MMcf/d a year earlier. Its Antrim Shale operations grew proven reserves to 442 Bcfe from 338 Bcfe.
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