Williams has placed into service an expansion of its Transco gas pipeline system, increasing firm transportation capacity into the greater Washington, DC, and Baltimore metropolitan areas by 165,000 Dth/d, the company said. The expansion required adding approximately 16.5 miles of 42-inch diameter pipe in Pittsylvania and Campbell counties, VA. In addition, the company replaced approximately 3.5 miles of pipe in Fairfax County, VA. Transco is a 10,500-mile system that transports gas to markets throughout the northeastern and southeastern United States. This expansion increases the total system capacity of the Transco system to approximately 8.3 Bcf/d. Known as the Potomac Expansion Project, the $73 million project was approved by FERC in April after receiving environmental clearance in January. It supplies gas to customers of Baltimore Gas and Electric Co., Columbia Gas of Virginia and Washington Gas Light Co.
Southwestern Energy Co. has sold its gas distribution business, Arkansas Western Gas Co., to SourceGas LLC, an affiliate of GE Energy Financial Services and Alinda Investments LLC for $224 million plus working capital. The transaction is subject to certain closing conditions and regulatory approvals and is expected to close by mid-2008. Arkansas Western Gas serves approximately 151,000 residential, commercial and industrial customers in northern Arkansas. It owns more than 5,700 miles of gathering, distribution and transmission pipelines, an underground storage facility and related gas distribution assets and has approximately 375 employees. SourceGas is a local distribution company headquartered in Lakewood, CO, with operations in Colorado, Nebraska, Wyoming and Hermosillo, Mexico. It serves more than 266,000 customers and operates 12,000 miles of distribution and transmission pipelines, as well as storage facilities.
Anadarko Petroleum Corp. said it received bids on 30,000 net acres of minerals and generated more than $82 million in proceeds in a lease offering by auction of its open and unleased mineral interests in Arkansas. Anadarko had offered the right to lease about 250,000 gross (206,000 net) acres throughout Arkansas (see NGI, Nov. 5). About 170,000 net acres are considered to be in the natural gas-rich Fayetteville Shale fairway; another 5,000 acres lie within the Smackover play in southern Arkansas. Anadarko, which did not release the names of the buyers, said the leases were awarded “solely on a highest bid-per-lot basis.” Post-sale title adjustments have to be completed within 90 days. The auction was conducted by the Oil & Gas Asset Clearinghouse in Houston.
FERC approved plans by Texas Eastern Transmission to construct and operate lateral facilities, consisting of approximately 3.79 miles of 20-inch diameter pipeline, a meter and regulating station and ancillary facilities to serve a gas-fired power plant in Chambers County, TX, 25 miles east of Houston. The Cedar Bayou lateral project will provide up to 360,000 Dth/d to the Cedar Bayou Power Plant owned by NRG Energy Inc. The Commission also approved Texas Eastern’s request to establish initial incremental rates for firm and interruptible service on the lateral. Texas Eastern has executed a precedent agreement with NRG’s affiliate, NRG Power Marketing, to provide 360,000 Dth/d of firm transportation service for a primary term of 10 years and has said it will negotiate a discounted firm backhaul deal with NRG Power Marketing. The project will cost an estimated $16.5 million with an overall rate of return of 12.13 %.
Direct Energy, a subsidiary of Centrica plc, agreed to acquire Calgary-based Rockyview Energy Inc. for C$113.3 million including debt. Direct Energy said it will pay C$3.16/share, a 29% premium over the 20-day weighted average closing price, to acquire all of the issued and outstanding common shares of Rockyview Energy. The transaction, subject to shareholder and regulatory approval, is expected to close in January. Rockyview Energy has conventional oil and gas and coalbed methane operations in central and western Alberta and the Peace River Arch in northwestern Alberta. In addition to a production base of 2,700 boe/d — 97% of it natural gas — Rockyview has a 100,000-acre undeveloped land portfolio with numerous identified drilling locations. The acquisition will add net proven and probable gas reserves of 43.2 Bcfe and increase the natural gas production level of Direct Energy’s Alberta operations more than 100 MMcfe/d. Direct Energy owns and operates approximately 3,000 natural gas wells in Alberta, three gas-fired power plants in Texas and has renewable power purchase agreements totaling 813 MW in Texas.
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