Market Hub Partners Holding (MHP), a joint venture of Spectra Energy Corp. and Spectra Energy Partners LP, will add approximately 6.5 Bcf of working capacity at its Moss Bluff natural gas storage facility by developing a fourth cavern at the Liberty County, TX, site. The MHP system at Moss Bluff is a high-deliverability salt cavern storage facility with 15 Bcf of current working capacity. A permit for the cavern expansion has been secured from the Texas Railroad Commission, and the fourth cavern is expected to be in service in summer 2011, MHP said. The company will also upgrade surface facilities to provide increased interconnectivity to the interstate pipeline network. Construction of the facilities is expected to begin this summer with in-service as early as the first half of 2009. In late 2006 Spectra said it would expand its Gulf Coast salt cavern storage facilities by more than 35 Bcf over the next six years (see NGI, Dec. 11, 2006). Last year the company filed an application with FERC to add a fourth cavern at its Market Hub-Egan gas storage facility — a 20 Bcf high-deliverability salt cavern facility in Acadia Parish, LA — which would ultimately increase working gas capacity of that facility to 32 Bcf (see NGI, Feb. 26, 2007).
Royal Dutch Shell plc has agreed to pay nearly $118 million to U.S. investors to settle claims related to its oil and natural gas reserves restatements in 2004. If the U.S. case is approved by the courts, it would end all pending litigation from Shell’s 2004 reserves restatement. Shell recategorized nearly 20% of its proved reserves, or about 3.9 billion boe, in early 2004 (see NGI, Jan. 12, 2004). The restatement reduced Shell’s proved reserves to 15.6 billion boe from the 19.5 billion boe estimated in December 2002. The proposed transaction is similar to an agreement last year to settle a related case with European shareholders. The U.S. lawsuit was brought by Shell shareholders led by the Pennsylvania State Employees’ Retirement System and the Pennsylvania Public School Employees’ Retirement System. Under the proposed settlement, U.S. shareholders would receive a base settlement amount of $79.9 million plus $2.95 million, proportional to the amounts payable to the participants in the European settlement announced last year. All of Shell’s shareholders — in the United States and Europe — also would collectively receive an additional payment of $35 million, to be divided according to proportions determined in the two final settlement agreements. Shell agreed to pay $352.6 million to shareholders and $47 million in fees to U.S. trial lawyers in the settlement last year.
The U.S. Commodity Futures Trading Commission (CFTC) has obtained a $55,000 civil monetary penalty and a permanent injunction in a consent order settling charges against Michael Whitney, a former Houston-based natural gas trader and marketing representative at Duke Energy Trading and Marketing LLC. Whitney was charged with false reporting and attempting to manipulate natural gas prices during 2001 and 2002. The consent order prohibits Whitney from applying for registration, engaging in any activity requiring registration, acting as a principal of any registered entity or person or any entity or person required to be registered, for four years. The order was entered last Wednesday by Judge Kenneth M. Hoyt of the U.S. District Court for the Southern District of Texas. The order arises from a CFTC lawsuit filed on Feb. 1, 2005 (see NGI, Feb. 7, 2005) alleging that between June 2001 and August 2002 Whitney submitted false reports of natural gas trades directly to at least two gas price reporting firms — Gas Daily and Enerdata — in an attempt to manipulate the price of natural gas in interstate commerce.
ICA Fluor, a U.S.-Mexico joint venture, announced that it has obtained a $100 million contract from Sempra Energy to build a key part of its Energia Costa Azul LNG receiving terminal that is set to open in the next quarter along the Pacific Coast of North Baja California, Mexico. ICA Fluor was tapped to build a nitrogen injection plant and an onsite electric generation facility within the existing Sempra LNG facility. ICA Fluor said it will provide engineering, procurement, construction and start-up of the nitrogen injection plant following an estimated 22-month schedule. The facility will produce up to 18 MMcf/d of nitrogen. A related part of the work will involve the construction of a 26 MW electric generation facility to complement the existing power capacity at the LNG terminal site. ICA Fluor said the completed project will comply with what it called “stringent international emissions and environmental standards. ICA Fluor was created by a combination of units from Mexico-based Empresas ICA and Irving, TX-based Fluor Corp.
The Colorado Oil and Gas Conservation Commission (COGCC) is investigating four large waste releases from natural gas and oil reserve pits near Rifle, CO, including two that apparently went unreported for two months. COGCC’s Dave Neslin said the spills took place between November 2007 and February. The releases drained into Garden Gulch, which is west of the Roan Plateau. One release of about 30,000 barrels of drilling mud was immediately reported to the state. A second release by a different operator also was reported, but that operator failed to report two other releases of still-undetermined volumes. The volume of the three releases was not reported. “Releases of drilling mud from pits are not uncommon,” said Neslin. “But releases of this magnitude in this kind of terrain and without notification are extremely rare.” The reserve pits hold the water, mud and additives used in drilling, according to the COGCC. “Even though the pits are well built and lined, it appears the releases were due to failures in the lining,” the COGCC said. Some of the drilling mud from the spills remains within a frozen waterfall that will flow into the West Parachute Creek in the spring, according to the commission. As snow melts, “runoff may cause problems for oil and gas operators in western Colorado,” Neslin said. The COGCC “is prepared to take action that allows companies to move drilling fluids away from the drainage and better contain them during the spring snowmelt.” Neslin stressed that he was concerned about the risks from heavy runoff and said he would welcome “operators’ ideas about handling snowmelt that could potentially fill and spill from reserve pits…We’re looking at possible ways to address situations like this both proactively and when they come up. Operators must notify the COGCC immediately when this occurs.” The COGCC withheld the names of the operators. It also withheld approval of about 80 drilling permit applications near Garden Gulch pending the completion of the investigation.
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