Paso Norte Pipeline Group Inc. (PNP) has launched an open season for shippers interested in accessing markets in western Chihuahua, Mexico, on a proposed international gas pipeline from New Mexico to Chihuahua that would serve demand for gas among power generators. Originating from El Paso Corp.’s Southern System near Deming, NM, the pipeline would enter Chihuahua near the Columbus, NM-Palomas, Chihuahua International Port of Entry. The 440-mile high-pressure pipeline is estimated to cost US$600 million, including compressor stations and storage facilities in the United States and Mexico, PNP said. The initial design capacity is 450 MMcf/d with provisions to increase capacity to support future development needs of Mexico’s Comision Federal de Electricidad (CFE), Petroleos Mexicanos (Pemex) and those of western Chihuahua. PNP President Peter Momsen told NGI that the consortium of U.S. and Mexican investors behind PNP should be ready to file paperwork at the Federal Energy Regulatory Commission in June. Once ground is broken, which is expected to be in October, Momsen said the project should take two years to construct. PNP held two earlier open seasons for the proposed project (see NGI, May 5, 2008; Oct. 9, 2006). More information is available at www.pasonortepipeline.com.

The British Columbia Oil and Gas Commission has enacted new rules for inline well tests and will launch a “fact-finding program” to study air quality in the Peace River area, where natural gas shale exploration programs are booming. The rules are part of a long-term energy plan that was unveiled three years ago, and the latest progress report was recently issued. Effective immediately, inline testing is required for all new wells located within 1.25 kilometers of a residence and three kilometers or less from pipeline infrastructure. The testing procedures are detailed at www.ogc.gov.bc.ca. The province’s Mobile Air Monitoring Laboratory (MAML) also is to track air quality data in the Peace River region this summer in Kelly Lake/Toms Lake, Rolla, Farmington and Groundbirch.

Houston-based Quantum Resources Management LLC (QRM), a privately held explorer based in Houston, agreed to pay Denbury Resources Inc. $900 million to acquire a package of natural gas-weighted assets in the Permian Basin of West Texas and southeastern new Mexico; the Anadarko Basin of Oklahoma, Texas and Kansas; and in East Texas. The transaction would be QRM’s largest since its inception in 2006. QRM targets legacy gas and oil properties, and before the Denbury agreement, it had spent about $600 million for onshore assets primarily located in the southwestern part of the United States. The partnership, which is helmed by former executives of Westport Resources Corp., Burlington Resources Inc. and Ocean Energy Inc., said it has “acquisition capacity” of more than $1 billion. The properties to be sold to QRM are about 66% weighted to gas, and 64% of the reserves are also gas-weighted. The transaction is slated to close May 1.

Coalbed natural gas production from the prolific Powder River Basin (PRB) in Wyoming hit a new record in 2009, fueled by output from the Big George coal seam, the Wyoming State Geological Survey (WSGS) reported. PRB output in 2009 topped 558 Bcf of natural gas, even though there were fewer producing wells compared with 2008, said state officials. At the beginning of 2009, about 27,000 wells had been drilled in the basin, of which about 17,000 were producing and 10,000 were shut in. During the year, the number of producing wells decreased by nearly 3,500, but despite the drop, it was the largest year for production ever.

A divided California Public Utilities Commission (CPUC) approved Southern California Gas Co.’s (SoCalGas) billion-dollar multi-year proposal for installing more than five million advanced meter systems in its service territory. A CPUC administrative law judge (ALJ) recommended that the regulators’ reject the Sempra Energy gas-only utility proposal for shifting to an advanced meter infrastructure (AMI), contending it was not cost-effective or of sufficient benefit to consumers. The focus of contention appeared to be related to how many real economic advantages there are in installing sophisticated meters in gas-only utility systems. As part of the approval, the regulators mandated that SoCalGas develop and present in a public workshop a plan for outreach and conservation support, along with filing semi-annual reports to the CPUC on the gas conservation impacts of the project. The utility also must retrain and transition employees displaced by the AMI system.

W&T Offshore Inc. is buying stakes in three offshore properties in the Gulf of Mexico (GOM) from the U.S. subsidiary of Total SA. The purchase price was not disclosed. Under the agreement, W&T would receive Total E&P USA Inc.‘s 64% interest in the Virgo natural gas field in Viosca Knoll blocks 822 and 823. It also bought 100% of the Matterhorn discovery in Mississippi Canyon Block 243. Virgo was producing on average 2,000 boe/d (boe/d) at the end of 2009. The Matterhorn field’s production at year end was 5,000 boe/d.

The Federal Energy Regulatory Commission issued a favorable environmental assessment of East Cheyenne Gas Storage LLC’s proposal to redevelop two nearly depleted oil reservoirs in northeastern Colorado for storage to meet the the peak day and load growth needs in markets throughout the Midwest and West. East Cheyenne proposes to redevelop the West Peetz and Lewis Creek oil fields in Logan County, CO, for gas storage purposes and plans to increase storage capacity in both fields through the extraction of the remaining oil reserves by enhanced oil recovery methods. The storage facility would have total working gas capacity of 18.9 Bcf — 11.5 Bcf in the West Peetz Field and 7.4 Bcf in the Lewis Creek Field, the company said. East Cheyenne said the project would provide natural gas storage and delivery to shippers on the Rockies Express Pipeline LLC (REX) and Trailblazer Pipeline systems that is not currently available via either pipeline.

Calgary-based Talisman Energy Inc., which has been working to narrow its focus in North America on unconventional natural gas, has five separate agreements in place to sell assets in Ontario and in Western Canada for a total of C$1.5 billion, the producer said. Talisman earlier this year said it would increase capital spending to expand its drilling program in the Marcellus Shale and in British Columbia’s Montney Shale (see NGI, Jan. 18). The latest transactions, to be completed by the end of June, would unload close to one million acres (400,000 hectares). Included with its Ontario sales are assets in the Peace River Arch area near the northern borders of Alberta and British Columbia. Also to be sold are properties in the central Alberta Foothills region and near Hinton, AB. The properties to be sold currently produce 42,500 boe/d, 90% weighted to gas. Net proved reserves are estimated at 120 million boe.

No major infrastructure damage was sustained by San Diego-based Sempra Energy facilities during an earthquake that hit a sparsely populated batch of northeast Baja California last Sunday. Electric grid operations were back to normal in California last Tuesday, less than 48 hours after the earthquake. A Sempra Energy corporate spokesperson confirmed that the company’s 1 Bcf/d LNG receiving terminal on the Pacific Coast of North Baja California, about 60 miles south of the international border, was unaffected by the quake. Similarly, the Sempra North Baja natural gas transmission pipeline was not impacted along its Mexican route traversing the north end of Baja. Sempra’s independent power generator, Sempra Generation’s 625 MW Termoelectrica de Mexicali generating plant in Mexicali, Mexico, which feeds supplies into the California Independent System Operator (CAISO) grid, stayed offline for several days as assessments were made to determine if it sustained any damage from the quake. San Diego Gas & Electric’s Imperial Valley Substation was damaged by the 7.2 magnitude earthquake and the 530 kV Southwest link transmission line was knocked out of service for a while, according to a CAISO spokesperson. There were no transmission-related outages, he said, noting that operations were back to normal last Tuesday.

Clatsop County, OR, staff generally has agreed to several local conditions imposed on the NorthernStar Natural Gas Corp. Bradwood Landing liquefied natural gas (LNG) receiving terminal along the Oregon side of the Columbia River. The county commission is expected to take up the issue in six to eight weeks, a Bradwood spokesperson told NGI. New findings that Bradwood submitted to the county addressed the areas of shoreline monitoring, dredge material placement, a construction worker park-and-ride lot, mitigation generally, erosion and sediment control, road improvements, plant decommissioning and riparian vegetation. For five of these the staff recommended approval, but for several others the staff recommended conditions be imposed regarding the shoreline monitoring, work, park-and-ride, the mitigation plan and the decommissioning. The state of Oregon continues to challenge NorthernStar’s project, as it also has with competing LNG proposals.

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