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Repsol recently received its first shipment of liquefied natural gas (LNG) from Qatargas under a multi-year agreement at the Canaport LNG terminal in Saint John, NB. The nearly 6 trillion Btu cargo arrived on a Q-Max LNG tanker, the largest LNG tanker in the world. Under the supply agreement Qatargas is to deliver LNG to Canaport using both Q-Flex and Q-Max ships, which have capacity to carry the equivalent of approximately 5.6 and 4.6 Bcf, respectively. The arrival of the Q-Max marked the berthing of Canaport LNG’s 37th ship, including three Q-Flexes, received at the terminal since its commissioning in June, 2009, Repsol said. The terminal has received LNG from Trinidad and Tobago, Egypt, Norway, Peru and Qatar.
The number of rigs drilling for natural gas in the United States fell by 12 to 919, according to Baker Hughes Dec. 30 rig count. This marks the fourth week of decline for the gas rig count. However the 919 rigs drilling for gas is an increase of 160 from the year-ago period. The overall North American rig count for the latest period was 1,940, down 85 rigs from the previous week but up 542 rigs from the year-ago period. The number of U.S. land-based rigs drilling was 1,656, down 19 from a week ago but up 517 from the year-ago period. Offshore rigs declined by 1 to 24 from the previous week. Thirty-eight rigs were drilling in the offshore a year ago, according to Baker Hughes. The Texas rig count declined by 15 to 731 for the week, while Oklahoma saw an increase of two rigs to 160, and Louisiana gained three rigs for 176 working. The Canadian rig count fell by 65 from a week ago to 246.
The Federal Energy Regulatory Commission (FERC) has granted Cameron LNG LLC, a subsidiary of Sempra Energy, an additional year to complete and place into serve the expansion of its liquefied natural gas (LNG) terminal in Hackberry, LA. In approving the project in January 2007, FERC gave the company until January 2011 to put the facilities in service (see NGI, Jan. 22, 2007). In September Cameron LNG requested that the in-service date be extended to January 2015 because “current market conditions have dictated that [it] temporarily defer construction of the expansion facilities.” The Commission gave Cameron LNG until Jan. 18, 2012 to have the expansion in service. Cameron LNG plans to expand the sendout capacity of the terminal to about 2.65 Bcf/d from its existing 1.5 Bcf/d. The sendout capacity of the expanded terminal would be about 1.8 Bcf/d on an interim basis, ramping up to the full 2.65 Bcf/d [CP06-422]. Last month affiliate Sempra LNG Marketing LLC received authorization from the U.S. Department of Energy Office of Fossil Energy (DOE/FE) to begin exporting previously imported LNG from the Cameron LNG terminal beginning Feb. 1 (see NGI, Dec. 13, 2010). The company has DOE/FE clearance to re-export up to 250 Bcf total over a two-year period.
Enterprise Products Partners LP has struck 10-year agreements to handle “a substantial portion” of Chesapeake Energy Corp.‘s liquids-rich gas production in the Eagle Ford Shale in South Texas. Chesapeake’s natural gas liquids (NGL)-rich gas will initially be gathered and compressed by affiliate Chesapeake Midstream Development LLC for delivery to a central location. Enterprise will then transport and process the gas at its existing facilities while a new processing plant currently under development in Texas by Enterprise is completed. This cryogenic facility, expected to be completed early in 2012, is designed for an initial capacity of 600 MMcf/d and with an initial capability to extract as many as 75,000 b/d of NGLs.
Targa Resources Partners has signed a nonbinding memorandum of understanding (MOU) for development of a pipeline to transport y-grade natural gas liquids from processing facilities in the Eagle Ford Shale to Mont Belvieu, TX, and a new fractionation train at the Targa-operated Cedar Bayou fractionation facility (CBF). The MOU is with TexStar Midstream Services LP and TEAK Midstream LLC. CBF is owned by Cedar Bayou Fractionators LP, a venture that is 88% owned by Targa. Targa said it expects to become an owner in the new y-grade pipeline, which would provide services from processing plants in the Eagle Ford area, including a TEAK gas plant and a TexStar gas plant, into Mont Belvieu. The pipeline would be designed to accommodate a future extension into the Permian Basin area of West Texas to provide y-grade transportation services to that growth region, Targa said.
PAA Natural Gas Storage LP (PNG) has agreed to acquire SG Resources Mississippi LLC, owner of the Southern Pines Energy Center gas storage facility, for $750 million. Southern Pines is a salt cavern facility in Greene County, MS, about 60 miles north of Pascagoula and 30 miles east of Hattiesburg. The facility was placed in service in 2008; three caverns are currently in operation. The facility is permitted for 40 Bcf of working capacity from four caverns. The fourth cavern is currently being drilled and the facility has the capacity for further expansion, subject to permits and market demand.
Spectra Energy Corp. has filed an application at the Federal Energy Regulatory Commission to expand its Texas Eastern Transmission and Algonquin Gas Transmission interstate pipeline systems to serve the New Jersey and New York natural gas markets. The $850 million New Jersey-New York Project would include construction of approximately 15.5 miles of new pipeline through parts of Bayonne, Jersey City and offshore Hoboken in New Jersey, as well as parts of Staten Island and Manhattan in New York. In addition, about five miles of pipeline will be replaced in Linden, NJ, and Staten Island, and some existing facilities will be modified in New York, New Jersey and Connecticut. The project, which would provide as much as 800 MMcf/d of new diversified supply to the region, is expected to be in service in November 2013.
The Bureau of Land Management (BLM) has lifted suspensions on 45 oil and natural gas leases in Montana that were caught up in the controversy over the impact of drilling on climate change (see NGI, April 12, 2010). The agency removed the suspensions last Tuesday on leases that cover 25,329 acres. Suspensions will be maintained on six additional leases, and two leases will continue under partial suspension. The BLM estimates that 6,667 acres will remain under suspension in Montana. The 53 leases are among 61 issued in 2008 and suspended last March as a result of a settlement agreement in a lawsuit involving parcels that BLM offered in Montana during four 2008 sales. Eight of the original 61 leases have been terminated. Environmental groups filed the lawsuit in December 2008 accusing the BLM of failing to address greenhouse gas pollution. Last March a federal judge dismissed the lawsuit against BLM after the agency agreed to suspend the Montana leases until it determined the effect of drilling on climate change (see NGI, March 29, 2010). The leases where suspensions are being maintained primarily involve sage grouse and Yellowstone cutthroat trout issues that will be analyzed in resource management plans currently being written. When those plans are completed, the suspensions will be re-examined.
Cheniere Energy subsidiary Sabine Pass Liquefaction LLC is disputing claims that its application to export liquefied natural gas (LNG) would result in higher gas prices in the United States and the loss of domestic manufacturing jobs. The Industrial Energy Consumers of America (IECA), which represents manufacturers, has asked the Department of Energy/Office of Fossil Energy (DOE/FE) to oppose the application, which seeks long-term authorization to export up to 16 million metric tons annually of domestically produced LNG from the Sabine Pass terminal in Cameron Parish, LA. The application requests authorization to export LNG to “any country with which the United States does not have a free trade agreement requiring the national treatment for trade in natural gas and LNG, that has or in the future develops the capacity to import LNG, and with which trade is not prohibited by U.S. law or policy.” The IECA effectively is asking DOE/FE to place artificial market constraints on natural gas market participants, and to interfere with free commerce in one sector of the economy for the purported benefit of another, Sabine Pass said. Sabine Pass further argued that IECA provided “no empirical market studies” to support its position that DOE/FE’s approval of its application would materially increase energy prices for the manufacturing sector and trigger the loss of U.S. manufacturing jobs. Section 3 of the Natural Gas Act “creates a rebuttable presumption that the proposed export of natural gas is in the public interest. DOE/FE must grant an application for export authorization unless opponents can overcome that presumption through an affirmative showing of inconsistency with the public interest. IECA clearly has failed to meet that burden,” Sabine Pass contends.
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