Private equity firm Kohlberg Kravis Roberts & Co. (KKR) said it plans to exit its investment in privately held East Resources Inc. in connection with the recent announcement that Royal Dutch Shell plc has agreed to pay $4.7 billion to acquire East Resources’ principal subsidiaries (see NGI, May 31). KKR invested $350 million in Warrendale, PA-based East Resources last year (see NGI, June 15, 2009). That investment “was a catalyst for the growth and development” of East Resources, according to KKR, which said the company succeeded in derisking a substantial part of the Northeastern Marcellus Shale area, developed a critical supply of natural gas to serve the region and saw its annual capital budget grow from $100 million to $350 million over the past year.

The Federal Energy Regulatory Commission partially approved Northern Natural Gas pipeline’s request to extend its storage field buffer zone in Kansas to prevent the further migration of gas away from its field. Northern proposed that its 28,000-acre Cunningham field in Pratt and Kingman counties, KS, be extended by 14,240 acres. The pipeline said third-party operators in the proposed extension are producing Northern’s storage gas and the expansion of the buffer zone would allow it to protect the integrity of the Cunningham storage field. “Northern has a responsibility to protect the natural gas that its customers have entrusted to Northern to store for them in the Cunningham field and, to that end, has a responsibility to maintain the integrity of the storage reservoir,” the Commission order said [CP09-465]. “The Commission will authorize the expansion of the Cunningham field’s certificated boundary. The Commission finds, however, that the proposed extent of Northern’s protective boundary expansion is not reasonable…The Commission will authorize only 12,320 acres for expansion, rather than Northern’s proposed 14,240 acres.”

The Idaho Public Utilities Commission (PUC) granted Intermountain Natural Gas Co. authority to interrupt customers’ use of gas to fire snow-melting equipment to clear driveways and rooftops in the midst of large wintertime accumulations. The utility saw the use of snow-melting equipment as a growing concern during periods of peak demand since the equipment uses what the PUC called an inordinate amount of gas compared to more conventional end uses, such as space and water heating. Without saying how many of its 305,000 retail customers have the melting equipment, Intermountain late last year asked the PUC for authority to temporarily curtail the snow-melting use in times of peak demand. The PUC decided that new residential and commercial customers that have snow-melting equipment will now receive a discounted rate in exchange for their service being interrupted at times. Existing customers with the same equipment can volunteer to receive the lower interruptible rate. On winter days when gas is at peak use, snow-melt use competes with other customers for the finite amounts of available natural gas that can flow through Intermountain’s distribution system, the PUC concluded, noting that this could potentially degrade service to other customers. For customers being interrupted there will be two hours’ notice prior to the snow-melting equipment being interrupted, and Intermountain will be expected to keep those interrupted informed about when service would be expected to be restored.

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