Tennessee Gas Pipeline Co. (TGP) has executed binding, 15-year term agreements with Cabot Oil & Gas Corp., Anadarko Energy Services Co. and Seneca Resources Corp. to carry up to 250,000 Dth/d of incremental firm transportation capacity from the Marcellus Shale region to existing markets in New England and Niagara Falls, NY, via a revamped Northeast Supply Diversification Project (NSD Project). The NSD Project combines TGP’s original NSD Project, which provided transportation to New England; and the Marcellus to Leidy and Niagara Project (MLN Project), which provided transportation service to Niagara Falls. A certificate application with the Federal Energy Regulatory Commission is to be filed later this year, and pending approval, construction could begin in the first half of 2012, with a Nov. 1, 2012 in-service date.
Concho Resources Inc., which agreed in July to buy privately held Permian Basin operator Marbob Energy Corp. for $1.65 billion (see NGI, July 26a), said it is suing Apache Corp. and BP America Production Co. after the BP plc subsidiary elected to exercise preferential purchase rights under some of the Marbob operating agreements. Marbob has around 100,000 acres in the Permian Basin of New Mexico in the emerging Bone Spring tight limestone and sandstone play. Concho noted that on the same day it executed a purchase agreement with Marbob, BP agreed to sell $7 billion worth of assets, including its Permian Basin acreage, to Apache (see NGI, July 26b). “Certain of BP’s Permian oil and gas properties are subject to the same operating agreements from which BP derives its preferential purchase rights,” Concho said. “BP’s preferential purchase rights arise as a result of the transactions contemplated by the definitive purchase agreement between Concho and Marbob,” Concho stated. “Concho believes that BP’s exercise of such preferential purchase rights relates to approximately $400 million of Marbob properties, predominately on the New Mexico Shelf.” To date, said Concho, “BP has not provided Marbob with the preferential purchase right notifications required to be delivered pursuant to the applicable operating agreements. To protect Marbob’s preferential purchase rights, Marbob and Concho have initiated litigation in New Mexico state district court against BP and Apache’s subsidiary seeking a declaratory judgment and injunctive relief to compel BP to provide Marbob the preferential purchase right notifications required by the applicable operating agreements.”
Oneok Partners LP has launched plans to build $595-730 million of natural gas liquids (NGL) projects between now and 2013, with most of the new building in the Williston Basin of North Dakota, where the prolific shale development is underway. The biggest chunk of money, $450-550 million, would be used to build the Bakken Pipeline, an NGL pipe that would be 525-615 miles long. The pipeline would transport unfractionated NGLs from the Williston Basin to the Overland Pass Pipeline, a 760-mile NGL pipe that extends from southern Wyoming to Conway, KS. Williams Partners LP and Oneok Partners jointly own Overland Pass Pipeline Co. LLC.; in July Williams announced that it would take its option to increase ownership in the pipe to 50% from 1% (see NGI, July 26).
Natural gas as a transportation fuel has much to gain from the initial version of the current U.S. Senate energy bill introduced by Majority Leader Harry Reid (D-NV) and a similar House version, according to Clean Energy Fuels Corp., a California-based marketer of compressed natural gas (CNG) and liquefied natural gas (LNG), and the infrastructure involved. The proposal could be the framework for a national gas fueling network, according to Clean Energy, which envisions as many as 400 LNG fueling stations and more than 1,000 CNG/LNG multi-use stations in urban centers. Clean Energy CEO Andrew Littlefair said the bill would help fund NGV purchases, particularly heavy-duty trucks, along with supporting gas fueling infrastructure growth nationally. Clean Energy said the $3.8 billion being proposed for vehicle purchase rebates (75% heavy duty), with as many as 200,000 alternative fuel vehicles being placed in service, could displace up to 1.8 billion gallons of petroleum annually.
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