Production is in the process of ramping up to normal levels of about 400 MMcf/d from the Sable Offshore Energy Project off Nova Scotia, an ExxonMobil spokesman said. The unit was down for planned maintenance when it was evacuated due to the threat from Hurricane Bill (see NGI, Aug. 31). The facility was remanned and maintenance was completed Aug. 30, said spokesman Merle MacIsaac. He said a damage inspection revealed that no harm had been caused by Bill. The Sable project is owned by ExxonMobil Canada Properties Ltd., Shell Canada Ltd., Imperial Oil Resources, Pengrowth Energy Trust and Mosbacher Operating Ltd. Sable gas production travels on Spectra Energy‘s Maritimes & Northeast Pipeline. The Maritimes & Northeast mainline interconnects with Portland Natural Gas Transmission System, Tennessee Gas Pipeline and Algonquin Gas Transmission. Through lateral pipelines the pipeline serves markets in Nova Scotia and New Brunswick. Emera Inc. and ExxonMobil Canada own minority interests in the pipeline.

Chestnut Ridge Storage received authorization from FERC for its 25 Bcf working capacity Junction Natural Gas Storage Project to be located in a depleted gas field in Fayette County, PA and Monongalia and Preston counties, WV. Omaha, NE-based Chestnut Ridge Storage, which is owned by affiliates of Tenaska Power Fund of Omaha and eCorp LLC of Houston, told the Federal Energy Regulatory Commission (FERC) it received expressions of interest for about 75 Bcf, or three times the expected working capacity of the facility in the West Summit Gas Field. The new storage is expected to have up to 500,000 Dth/d of injection/withdrawal capacity through as many as 26 storage injection/withdrawal wells providing high-deliverability, multi-cycle storage services. Chestnut Ridge expects to operate the storage facility at a maximum wellhead storage pressure of 3,500 psig, a pressure consistent with the discovery wellhead pressures observed in the production wells in the West Summit Field. The facility will interconnect directly to Dominion Transmission, Texas Eastern, and Columbia, and indirectly to National Fuel Gas Supply, and Transcontinental Gas Pipe Line and offer open-access firm and interruptible storage services, firm and interruptible parking and loan services, and interruptible wheeling services at market-based rates.

Anyone looking to the U.S. Gulf of Mexico and wondering where all the liquefied natural gas (LNG) is should look to the United Kingdom, where gas prices are higher and tanker traffic is brisk, Credit Suisse analyst Teri Viswanath said in a note to clients. “We suspect that low U.S. natural gas prices will encourage a steady stream of imports into the higher-priced UK market, which in turn will keep UK prices from rising,” she wrote. “We believe that increased price alignment between the U.S. and UK gas markets this year will likely offer up opportunities for investors to exploit what we believe to be unsustainable high UK winter prices.” A “dramatic change” in global LNG balances has created supply-side competition for premium markets, such as the UK. “However, the siren call of relatively higher netbacks has resulted in a steady stream of LNG cargoes into this market, which we believe should inevitably pressure UK prices lower,” she said.

Royal Dutch Shell plc is set to announce “substantial” job cuts in the coming days, sources told NGI. Shell CEO Peter Voser in July said the producer would cut a quarter, or around 150, of its 700 senior management jobs, and he announced a 10% cut to capital spending in 2010 (see NGI, Aug. 3 ). However, more job-reduction announcements are imminent, according to internal e-mails sent to upstream managers. The e-mail indicated the “coming days will bring more information about the reorganization,” two people familiar with the memos said. In a separate posting on Shell’s intranet, Voser is said to have written, “ongoing changes will result in significant staff reductions,” said a source. The staff reductions are to be submitted to Shell’s works council, a consultative group that employees and managers use to discuss staff policies. Shell did not confirm the information. A restructuring by Shell intended to streamline operations, cut overhead and speed decision-making took effect July 1 (see NGI, June 1).

Enstor will accept binding bids for firm storage capacity at its Alberta, Caledonia, Freebird, Grama Ridge and Katy facilities Sept. 16. through Sept. 30, the company said. Long-term contracts with terms of one to five years will be available. “The timing of this open season will afford utilities and other energy companies the ability to take advantage of seasonal spreads, provide security of supplies and monetize the incremental value of volatile prices,” said Kay Atchison, Enstor director of marketing. The facilities are the Alberta Hub in central Alberta on TransCanada‘s NGTL System; Caledonia in Lowndes County, MS, which is interconnected with Tennessee Gas Pipeline on its 500 Leg in Zone 1; Freebird in Lamar County, AL, 110 miles east of Birmingham on Tennessee Gas Pipeline’s 500 line in Zone 1; Katy Storage Hub, which has interconnections to 14 interstate and intrastate pipelines and is located in Fort Bend County, TX; and Grama Ridge in southeast New Mexico in Lea County is interconnected with the El Paso pipeline in the Keystone pooling area and with Raptor Pipeline, an intrastate facility. Bids may be placed at For information contact Atchison at (281) 374-3075.

Energy Transfer Partners LP has completed the 160-mile Texas Independence Pipeline, which increases the partnership’s takeaway capacity in Texas by an incremental 1.1 Bcf/d, it said. The partnership also said it has completed the Rulison expansion project in Colorado. The 42-inch diameter Texas Independence serves the Bossier and Barnett shale resource plays in east and north-central Texas. Originating just west of Maypearl, TX, and ending near Henderson, TX, the pipeline connects the partnership’s existing central and north Texas infrastructure to its East Texas pipeline network. With the addition of compression, the project may be expanded to transport volumes in excess of 1.75 Bcf/d. Energy Transfer announced the $485 million project in spring 2008 (see NGI, April 7, 2008). The Rulison expansion includes the 10-mile, 24-inch diameter Rulison pipeline and the Holmes Mesa compressor station in Garfield County, CO. The Rulison pipeline will initially add more than 70 MMcf/d of capacity, with the ability to expand to more than 200 MMcf/d.

The New York Mercantile Exchange (Nymex) said it is backing off earlier commitments to implement hard position limits for certain financially settled natural gas contracts from the end of September, noting that the Commodity Futures Trading Commission (CFTC) is delaying implementation of position limits on comparable contracts under its rulemaking on Exempt Commercial Markets (ECM). Nymex indicated that it would wait for the CFTC to act. “In conversations with the CFTC Nymex concluded that the timetable for the ECM implementation originally discussed with the CFTC has been delayed from September 2009 (October 2009 contract expiration).” The CFTC did not respond to questions as to when it would be implementing its rules for ECMs, or more lightly regulated exchanges such as IntercontinentalExchange (ICE). CFTC Chairman Gary Gensler has said he believes it is the job of the CFTC rather than regulated trading exchanges such as Nymex to set position limits.

BP Alaska has completed a gas-to-liquids (GTL) demonstration project in Nikiski, AK, and proven that it can produce diesel and aviation fuel from natural gas on a commercial scale. The company plans to close the facility by the end of 2009 after seven years of operation, the company said. The project has proved that BP’s GTL process to make diesel and jet fuel from natural gas can be scaled-up from the laboratory and operated safely and reliably, it said. “We have learned a great deal from the Nikiski test facility,” said BP Alaska President John Minge. “The technologies developed and improved there will eventually play a role in meeting the world’s growing demand for cleaner fuels.” The company’s GTL development program will continue in Europe, where BP said it is working with partner Davy Process Technology on the engineering design of full-scale GTL units. The closure of the project affects about 15 BP employees, who will be offered positions elsewhere with BP.

Rhode Island Attorney General Patrick Lynch has called on the U.S. Coast Guard to withdraw and reconsider its recent letter of recommendation (LOR) providing conditional support for Weaver’s Cove Energy LLC’s proposal to construct a berth for tankers in Mount Hope Bay and underwater pipeline facilities to unload and deliver liquefied natural gas (LNG) to the proposed terminal site at Fall River, MA. The LOR, which the Coast Guard issued in late July, and the letter of recommendation analysis (LORA) for the Weaver’s Cove project are at odds with Coast Guard policy, the National Environmental Policy Act (NEPA) and the due process clause of the Constitution, the attorney general said. Weaver’s Cove, a joint venture of Hess Corp. and Poten & Partners, submitted the berth proposal in an attempt to suppress some of the controversy surrounding the project (see NGI, Feb.9). The offshore berth would eliminate the need for LNG tankers to travel the Taunton River, which Congress declared off-limits this year by including it in the National Wild and Scenic River system, and would quell the concerns of the public and the Coast Guard about tankers transporting LNG between the old and new Brightman Street Bridges that span the Taunton River between the town of Somerset, MA, and Fall River. The terminal project and pipeline connections to the existing interstate natural gas system were conditionally approved by the Federal Energy Regulatory Commission in June 2005 (see NGI, July 4, 2005).

The Federal Energy Regulatory Commission upheld its orders conditionally approving the first liquefied natural gas (LNG) import terminal and associated sendout pipeline to serve rising natural gas demand in the Pacific Northwest. Specifically the Commission denied requests for rehearing of a Jan. 15 order, which upheld the agency’s September 2008 decision approving the Bradwood Landing LLC LNG project (see NGI, Sept. 22, 2008). It also rejected Oregon’s bid for a stay of the project pending a decision by the U.S. Court of Appeals for the Ninth Circuit on the merits of the Commission’s orders approving the LNG project and associated pipeline. The state in January filed a petition with the court seeking reversal of the FERC decisions (see NGI, Feb. 2). The Bradwood Landing project calls for the construction of a single ship berth capable of receiving and unloading LNG tankers with capacities ranging from 100,000 to 200,000 cubic meters; two 160,000-cubic meter storage tanks; and associated facilities. NorthernStar Energy LLC proposes a 36-mile, 30- and 36-inch diameter sendout pipeline in Clatsop and Columbia Counties, OR, and Cowlitz County, WA.

Northern Indiana Public Service Co. (NIPSCO), the largest natural gas distribution company in Indiana, blamed the recession for a decision to cut 2% of its 2,568-member workforce in the state and the postponement of some “major” projects. The Merrillville, IN-based utility said in 2Q2009 industrial demand was down by 25% from the year-ago period, which resulted in a $21 million revenue loss for the quarter. Besides cutting its Indiana workforce, a voluntary furlough program through the rest of this year is being offered to Northern Indiana Energy (NIE) employees who choose to take time off without pay. However, beginning in 2010, “a mandatory furlough program will require management employees to take two weeks off without pay,” NIE said. Merit increases for 2008 performance, which had been delayed, also were canceled.

Saying the cost of buying natural gas has declined “significantly” in recent months, Questar Gas asked the Public Service Commission of Utah (PSC) to reduce natural gas rates by $6.7 million, which would lower a typical residential customer’s annual bill by about $3.50 (0.5%). If approved, the rate cut would go into effect Oct. 1. Questar cut natural gas rates by $63 million (5.3%) last November and $157 million (16%) in March. Earlier this year the PSC approved a Questar request for an immediate $50 million one-time rebate to its customers (see NGI, April 27). The rebate, which was also prompted by lower natural gas prices, reduced the typical customer’s May natural gas bill by $40-45, Questar said. Twice a year Questar and the PSC use third-party forecasts of gas prices to estimate how much the utility’s rates should be adjusted to cover anticipated gas procurement costs.

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