The Federal Energy Regulatory Commission has vacated authorizations for Calhoun LNG and Point Comfort Pipeline to site, construct and operate a liquefied natural gas (LNG) import terminal and associated facilities at the port of Port Lavaca-Point Comfort in Calhoun County, TX. The Commission approved the project in September 2007 (see NGI, Sept. 24, 2007). The companies, which had planned to build a 1 Bcf/d LNG terminal and a 27.1-mile, 36-inch diameter pipeline from the terminal to pipeline interconnects southwest of Edna, TX, filed a request to vacate the authorizations in December. Calhoun LNG is a subsidiary of Houston-based Gulf Coast LNG Partners LP.

An investigation by the Missouri Public Service Commission is continuing after a natural gas main exploded about 6 p.m. on Tuesday (Feb. 19) in Kansas City, MO, apparently killing one woman and sending more than a dozen people to area hospitals. Missouri Gas Energy, which serves the area, said preliminary reports indicated that the punctured line may have been caused by a contractor that was installing a fiber optic line for Time Warner Cable Inc. Gas smells had been reported to authorities hours before the blast, and the Kansas City Fire Department and MGE staff around 5:30 p.m. had ordered people to evacuate. A hotline, (877) 872-1288, has been established by MGE to ensure that “affected residents and businesses in the area are taken care of as quickly as possible.”

NET Mexico Pipeline LP‘s midstream unit plans to build a 124-mile, 42-inch diameter natural gas pipeline to carry gas produced in the Eagle Ford Shale in South Texas to the Texas-Mexico border. The project would be anchored by a long-term firm gas transportation agreement for up to 2.1 Bcf/d, with MGI Supply Ltd., a unit of Mexico’s state-owned Pemex Gas y Petroquimica Basica. NET Mexico would transport gas from the Agua Dulce Hub in Nueces County, TX, to a point in Starr County, TX, near Rio Grande City. The pipeline could enter service in December 2014. Net Midstream Co-President Joe Gutierrez said the Eagle Ford gas would serve power generation markets in Mexico.

Westlake Chemical Corp. enjoyed record 4Q2012 and full-year 2012 results, driven in large part by lower ethylene feedstock costs resulting from the abundant North American supply of natural gas liquids (NGL). Net income was $95.3 million ($1.43/share) for 4Q2012, compared with $26.4 million (40 cents) in 4Q2011, and full year 2012 net income of $385.6 million ($5.78/share), compared with $259.0 million ($3.89) in 2011. The company also recorded its best-ever third quarter last year (see NGI, Nov. 12, 2012). The North American chemical industry can’t consume ethane as fast as shale plays are producing it, according to CEO Albert Chao, and ethane feedstock prices tumbled 67% between 4Q2011 and 4Q2012. Westlake expects to capture additional benefits from the abundant supply of natural gas and ethane this year by completing an expansion of one of its Lake Charles, LA, ethylene crackers in the first quarter and starting other projects later this year.

Dallas-based Pioneer Natural Resources Co. is cutting jobs and scaling back operations in its Trinidad, CO, operating area, a dry natural gas play in the Raton Basin because of low prices. About 60 people are to be laid off from land and drilling units, with four service departments combined with Pioneer Natural Resources Well Services LLC. More than half of the employees losing their jobs are to be offered other positions. Pioneer is allocating close to 88% of this year’s capital drilling budget to oily plays in Texas, including the Eagle Ford Shale and Permian Basin. In 2012 the operator exited dry gas operations and downsized maintenance and roustabout services in the Raton Basin, which it had once said held 2 Tcf of potential (see NGI, July 14, 2008). Pioneer plans to “continue to maximize the production from our Raton Basin asset,” albeit at the anticipated reduced levels of activity, said Tom Sheffield, vice president of the Rockies asset team.

With significantly reduced profits for 4Q2012 and for 2012, Spokane, WA-based Avista Corp. senior management has pledged to better manage costs and to push for more growth initiatives this year, including the more use of natural gas in transportation. “We have been recovering slower than the nation as a whole, and we expect this trend to continue in 2013,” said CEO Scott Morris. The company plans to spend $2-3 million in 2013 exploring opportunities “to develop new markets for customers to use natural gas and electricity for commercial productivity and transportation.” The 2012 results represented an “under-performance across all of our business units,” some due to weather-related factors, some due to not reining in costs and others due to the generally sluggish economy. Even with the latter factor continuing this year, he said there should be modest 1% growth in both the natural gas and electric utility businesses and his team is focused on finding more growth areas.

MarkWest Utica EMG LLC has clinched an agreement with Rex Energy Corp. to expand Utica Shale midstream infrastructure. MarkWest Utica, a joint venture (JV) of MarkWest Energy Partners LP and The Energy and Minerals Group (EMG), is developing an integrated system in the Utica to provide low- and high-pressure natural gas gathering systems, natural gas liquids pipelines and processing complexes that would have nearly 800 MMcf/d of capacity and provide 100,000 b/d of C2+ fractionation capacity. Under the agreement, the JV would begin gathering and processing Rex’s liquids-rich gas by June. Financial details were not disclosed.

New Mexico officials, Albuquerque-based utility PNM and the U.S. Environmental Protection Agency (EPA) have reached a tentative emission reductions plan that would shutter two coal-fired generation units and create natural gas-fired generation. The nonbinding agreement requires revisions to the state implementation plan, which is overseen by EPA. The agreement concerns a mutually accepted revised plan for PNM’s coal-fired San Juan Generation Station to comply with federal visibility (haze) rules. Gov. Susana Martinez helped broker the deal, and said she was guided by the prospect of moving away from coal and toward gas development, including in the Mancos Shale. With a five-year horizon, plans calls for retiring by the end of 2017 units 2 and 3 of four 450-MW units, which is about one-half of the plant’s 1,800 MW of capacity. The New Mexico Environmental Board is expected to act on the agreement by late October, and the EPA should issue its decision in late 2014. New Mexico’s Public Regulation Commission (PRC) eventually would have to approve the closures and the replacement power, 150-200 MW of gas-fired power generation at the San Juan site. Two remaining coal units would get nitrogen oxide-reducing technology — selective noncatalytic reduction — by early 2016.

New Brunswick expects to unveil this spring a blueprint for oil and natural gas rules; it recently unveiled proposed rules for the prospective Frederick Brook Shale, including a requirement that operators disclose all of the chemicals used in hydraulic fracturing (fracking). The Energy and Mines Ministry said the rules outlined in a 106-page report were based off a discussion paper (see NGI, May 21, 2012), and dovetail with recommendations made separately by the province’s chief medical officer, Eilish Cleary, and Louis LaPierre, a biology professor at the University of Moncton (see NGI, Dec. 3, 2012; Oct. 22, 2012).

McMoRan Exploration Co. said a Lineham Creek ultra-deep exploratory well in Cameron Parish, LA, not yet at total depth, is estimated to hold 546.7 Bcfe gross of proved, probable and possible reserves. Chevron U.S.A. Inc., which has not confirmed the results, is operator and holds a 50% working interest; McMoRan has 36%; Energy XXI, 9.0%; and Tex Moncrief, 5%. These are the first reserves to be booked in the sub-salt, ultra-deep trend, McMoRan said. The well is currently drilling below 27,600 feet to evaluate the deeper primary objectives and has a proposed total depth of 29,000 feet.

Geisinger Health System has been awarded a $1 million grant from the Degenstein Foundation to help complete a study on the health impacts from Marcellus Shale drilling. Last August, Geisinger said it was partnering with health care system Guthrie Health to conduct “the first large-scale, scientifically rigorous assessment” on the health effects of natural gas production (see NGI, Aug. 27, 2012). Susquehanna Health joined the project in November. The partners plan to pore through their electronic health records to determine what impact gas drilling may have had on health.

The Allegheny County Council in Pennsylvania has voted 9-4, with one abstention, to allow the Allegheny County Airport Authority (ACAA) to lease 8,800 acres at Pittsburgh International Airport to Consol Energy Inc. The deal, which includes a $50 million signing bonus and 18% royalties on all future production, could be worth $500 million over the next 20 years. County Executive Rich Fitzgerald still needs to sign the agreement. Earlier in February the ACAA board voted unanimously in favor of the agreement with Consol (see NGI, Feb. 18).

The Muskingum Watershed Conservancy District (MWCD) agreed to lease 6,553 acres under Seneca Lake, located in Guernsey and Noble counties to Antero Resources. The district will receive a signing bonus of $6,200 per acre and 20% royalties on gross revenues, which equates to a bonus of $40.6 million. The lease bars Denver-based Antero from building well pads, lease roads or pipelines on MWCD property. The company will drill under the lake from property it owns within a half mile of land owned by the district, a state government entity that controls an 8,000-square mile watershed covering about one-fifth of Ohio.

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