Enbridge Inc. has acquired another 13.3% stake in the Cabin Gas Plant development east of Fort Nelson, BC, which would give it a 71% stake in the project intended to serve growing natural gas output from the Horn River Basin. In October Enbridge paid Encana Corp., the project’s operator, C$220 million to acquire a 57.7% majority stake in the Cabin project. Details of the latest acquisition weren’t disclosed but Enbridge said the transaction was “on the same terms” as the one with Encana. The plant, which has been sanctioned by producers and received regulatory approval, is under construction and expected to be in-service in late 2012. Phase 1 is to have 400 MMcf/d of processing capacity. Phase 2, expected to be ready for service in the second half of 2014, would add an additional 400 MMcf/d of capacity.
CenterPoint Energy Inc. subsidiary CenterPoint Energy Services Inc. has acquired Denver-based natural gas marketer Asgard Energy LLC. Terms of the deal were not disclosed. Asgard supplies natural gas to commercial, industrial, agricultural and residential customers in Colorado, Kansas, Nebraska, Wyoming and West Virginia. The acquisition, which is effective as of Nov. 1, is part of CenterPoint’s strategy to expand into the Rockies market and will allow the Houston-based company to extend into residential markets. CenterPoint said it will retain all Asgard employees and provide service to its new customers from a Denver office. CenterPoint had total sales transactions of 1.38 Bcf/d in 2Q2011, a 2% decline from 1.41 Bcf/d in 2Q2010, according to NGI‘s 2Q2011 Top North American Gas Marketers Ranking.
The Interior Department has extended 1,381 deepwater oil and natural gas drilling leases to compensate for delays caused by the Macondo well blowout and subsequent offshore drilling moratorium. The Bureau of Safety and Environmental Enforcement said it had concluded the process to vet requests for extra time. The Obama administration had announced the lease extension plan in May to compensate operators for the five-month deepwater drilling moratorium and to allow more time to meet more stringent standards to operate in the offshore (see NGI, May 23). According to the BSEE, operators had asked for extensions of up to one year for 1,413 offshore leases and 2.3% pf the applications were denied. Interior opened the program to nonproducing leases in at least 500 feet of water that were to expire before Dec. 13, 2015. Deepwater drilling leases typically are for around 10 years.
Enterprise Products Partners LP’s $1.5 billion, 270-mile Acadian Haynesville Extension pipeline has entered service, linking producers in the Haynesville/Bossier shale play with new markets. The company said the pipeline’s starting incremental takeaway capacity is 1.8 Bcf/d and producers have already signed firm 10-year contracts for 1.6 Bcf/d of capacity. New equipment could expand the pipeline’s capacity to 2.1 Bcf/d. The pipeline will serve as an extension of the existing Acadian system, which provides producers access to more than 150 end-use markets along the Mississippi River industrial corridor between Baton Rouge, LA, and New Orleans, as well as the Henry Hub.
A judge in New York State is expected to rule within 60 days if the Town of Dryden, NY, overstepped its authority when it enacted an ordinance and a zoning requirement this past summer banning all oil and gas development activities. Tompkins County Supreme Court Judge Phillip Rumsey heard oral arguments for about an hour from attorneys representing the town and Anschutz Exploration Corp. (AEC) on Friday. According to court documents, several environmental groups filed a memorandum of law amici curiae on Nov. 1. The Town of Ulysses and several town officials also filed similar memorandums on Nov. 2. The producer filed a lawsuit against the Town of Dryden on AEC in September (see NGI, Sept. 26). At its meeting on Aug. 2, the Dryden Town Board unanimously approved a resolution prohibiting natural gas exploration and extraction and a zoning ordinance declaring gas activities to have a negative impact under the State Environmental Quality Review Act (SEQR).
About 900 landowners in eastern Ohio, members of the nonprofit Associated Landowners of the Ohio Valley (ALOV) have agreed to lease about 25,000 acres to Chesapeake Energy Corp. Financial terms of the leases were not disclosed, but ALOV said they were five-year leases with a company option to extend for another three years at a pre-determined price. ALOV also said the terms were more generous than a similar agreement it reached with Chesapeake in May that paid $2,250 per acre in leasing bonuses, plus 17.5% in royalties (see NGI, May 16). The leasehold is located across six counties — Belmont, Carroll, Columbiana, Harrison, Jefferson and Mahoning — in the state’s portion of the Marcellus and Utica shales.
The cities of Albany and Syracuse, NY, have recently taken divergent paths on hydraulic fracturing (fracking). On Oct. 27, Albany Mayor Gerald Jennings vetoed an anti-fracking ordinance that had passed the Albany Common Council on the grounds that the state Department of Environmental Conservation has not finalized its actions over the practice. Meanwhile, the Syracuse Common Council unanimously adopted a “Natural Gas Exploration and Extraction” ordinance on Oct. 24. The nine-page document outlining the ordinance, also known as Article 10, explicitly prohibits the exploration for or extraction of natural gas, as well as the storage, treatment and disposal of associated waste products, within the city. Other municipalities in New York that have enacted bans on fracking include the towns of Dryden and Middlefield (see NGI, Sept. 26; Sept. 19).
Atlanta Gas Light Inc.‘s (AGL) proposal to establish over the next five years a network of compressed natural gas (CNG) fueling stations was approved by the Georgia Public Service Commission (PSC). The PSC’s 4-1 vote cleared the way for the utility to invest $11.7 million to stimulate private investment in the construction of as many as 10 stations, depending on the size of the station and level of investment. Private retailers would be the owner/operators of the CNG stations. The PSC amended the resolution to require retailers to pay for much of the equipment at their stations, including underground piping needed to connect to AGL. PSC staff had recommended that only commercial vehicle fleets be permitted to fill up at the CNG stations; the PSC voting instead to allow access to both commercial fleets and individually owned CNG vehicles. Capital for the buildout program would come from Georgia’s Universal Service Fund (USF). Some opponents of the AGL proposal said it should be paid for by AGL, rather than using USF dollars. Others, including Seal Beach, CA-based Clean Energy Fuels Corp., argued that utility-driven CNG initiatives have all failed in the past.
Panhandle Oil and Gas Inc. said it has closed on the acquisition of several assets in the Fayetteville Shale from a private seller for $17.5 million. The Oklahoma City-based company said the assets include 193 nonoperated wells producing about 2.7 MMcf/d and 1,531 leasehold acres in Van Buren, Conway and Cleburne counties, AR. Approximately 240 future infill drilling sites have also been identified on the leasehold.
The Oregon Public Utilities Commission has lowered the retail charges in natural gas rates for NW Natural and Cascade Natural Gas Corp., and raised by 0.1% the gas rates for Spokane, WA-based Avista Utilities‘ Oregon customers. The breakdown in rate changes includes decreases of 2.4% to 6.7% and the fractional increase that amounts to pennies monthly. The changes are broken down by utility as follows: NW Natural, a decrease of 2.4%, or on average $1.64/month for typical residential customers. In January that will increase to 2.5%, or $3.15/month, less for residential customers; Cascade Natural Gas, a decrease of 6.55%, or about $4.03/month immediately, and a decrease of 6.7%, or $8.50/month, for the typical residential customer as of Jan. 1; Avista customers will see the 0.1% increase, or about 9 cents/month on typical residential bills running around a little more than $62. In January that will grow by a few cents to an increase for residential customers of about 17 cents/month.
Wisconsin Energy Corp. (WEC) sees continuing signs of slow recovery of the industrial sector, according to CEO Gale Klappa. Milwaukee-based WEC reported 3Q2011 profits of $129.8 million (55 cents/share) compared with $112.3 million (47 cents/share) in 3Q2010. Klappa characterized the growth in Wisconsin as slow but steady, and indicated that the combination natural gas/electric utility holding company is not a target for the merger/acquisition push that is regaining momentum in the energy sector. Klappa said WEC is “not counting on” any potential M&A or consolidation activity. On the industrial growth front, Klappa said he does not put much importance on the fact that third quarter industrial sector growth (0.3%) dropped substantially from what was experienced in the second quarter (1.8%). Some larger customers, such as mining operations, will have planned outages in certain quarters that will greatly reduce output for a given quarter, but not be indicative of future trends. “We see some traction in terms of the industrial part of the economy here — nothing robust, but steady and, I think, cautiously optimistic for continued modest growth,” Klappa said.
U.S. Sen. Joe Manchin (D-WV) told attendees of an Oct. 27 energy conference at West Virginia University that state legislators and regulators needed to come to an agreement on Marcellus Shale regulatory reform. He also derided plans by the U.S. Environmental Protection Agency to develop national standards for pretreatment of wastewater and air emissions (see NGI, Oct. 24; Aug. 1), and blasted the Obama administration for “demonizing” shale gas in favor of renewable energy, and touched on the unfolding scandal surrounding the now-bankrupt solar panel manufacturer Solyndra LLC (see NGI, Oct. 10). The Joint Select Committee on Marcellus Shale, which is trying to reach a consensus on Marcellus regulatory issues, will meet next on Nov. 14 and 16.
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