CenterPoint Energy Gas Transmission Co. (CEGT), an indirect subsidiary of CenterPoint Energy Inc., has contracted to construct compression and pipeline facilities to serve a new power plant with up to 480 MW of capacity being built by Southwestern Electric Power Co. (SWEPCO), a subsidiary of American Electric Power, in Washington County, AR. The CEGT facilities will be constructed in eastern Oklahoma and northwest Arkansas. SWEPCO is constructing two simple-cycle natural gas-fired combustion turbines, with a combined capacity of 170 MW and scheduled for completion in July. Another two combustion turbines, with a combined capacity of 170 MW, are scheduled for completion in December. The facilities required to meet the demand will be built in two phases. Phase I, expected to be in service in the third quarter, will consist of 2,300 feet of 12-inch diameter pipe and a delivery meter station at the power plant. Phase II activities include the addition of a 15,000-hp mainline compressor station near Poteau, OK, along with 15.5 miles of 24-inch diameter pipeline looping of CEGT’s Line OM-1. CEGT expects to file an application for Phase II with the Federal Energy Regulatory Commission and anticipates an in-service date in the second quarter of 2009. Terms of the contracts are confidential.

In an interim 2Q2007 update, Houston-based ConocoPhillips said its quarterly oil and natural gas production will be lower than the first three months of the year because of several factors, most of them losses in its global operations. Production numbers were weighed down by the weather in Alaska, asset disposals, scheduled maintenance in the North Sea and an exit from Dubai, ConocoPhillips said. The producer also expects to record $4.5 billion in losses following its exit at the end of June from Venezuelan oil projects. Exploration expenses are expected to be about $270 million before taxes for the quarter. In 2Q2007, ConocoPhillips reported that natural gas prices reached $7.55/MMBtu (Henry Hub), which was 78 cents higher than the $6.77 in 1Q2007. In 2Q2006, ConocoPhillips earned $6.80/MMBtu. ConocoPhillips is scheduled to report earnings on July 25.

The New Mexico Bureau of Land Management (BLM) will offer 67,120 acres of federal land in an oral oil and gas lease auction on July 18 at the Accounts Office at the BLM New Mexico state office in Santa Fe. The sale involves 114 parcels with 92% of the acreage located in New Mexico and the balance in Kansas, Oklahoma and Texas. Six parcels totaling 6,032 acres have presale offers. Leases are for a primary term of 10 years and “will continue beyond the primary term as long as long as oil or gas is produced in paying quantities on or for the benefit of the lease.” The complete list of parcels is available on the New Mexico BLM website, https://www.nm.blm.gov/oil_gas/leasing/sale_notices_results.html. The BLM has tentatively scheduled its next lease auction for Oct 17.

Energas Resources Inc. has reactivated oil and natural gas production in the Parkway Project in Kentucky after gas testing met pipeline requirements. The company’s field personnel have converted two of the first four wells to electric pump jacks utilizing a timing system to stabilize flow rates and pressure. The two wells have produced approximately 66 MMBtu/d of natural gas and 2 b/d of oil since May 23. Energas is now reevaluating the development strategy and proposed treatment methods for the Parkway Project.

MDU Resources Group Inc. completed its merger with Cascade Natural Gas Corp., making Cascade a subsidiary of MDU Resources in a deal worth $475 million in cash and debt. Cascade was founded in 1953 and employs nearly 380 people. The merger, which received its final regulatory approval late last month, was originally announced on July 9, 2006 (see NGI, July 17, 2006). Cascade joins Montana-Dakota Utilities Co. and Great Plains Natural Gas Co. as a third utility business within MDU Resources. Montana-Dakota and Great Plains serve more than 250,000 gas customers and 120,000 electric customers in five Upper Midwest states. Cascade serves 246,000 customers in 93 communities — 65 of which are in Washington and 28 in Oregon. Cascade’s service areas are concentrated in western and south-central Washington and south-central and eastern Oregon.

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