Gross withdrawals of natural gas increased 1.1% (0.72 Bcf/d) in the Lower 48 states during September, according to the Energy Information Administration (EIA). All areas except for the federal offshore Gulf of Mexico (GOM) produced more to make for the seventh monthly gain in a row, while lower 48 withdrawals achieved a record high of 70.4 Bcf/d in September, up 6.9% from September 2010. Overall, U.S. withdrawals climbed 3.5% (2.66 Bcf/d) in September from August to 79.13 Bcf/d and were up nearly 6% from the year-ago period, according to EIA’s Monthly Natural Gas Production Report. Wyoming posted the largest gain at 9.2% (0.55 Bcf/d) as production resumed after maintenance on a gas plant. In contrast, the GOM offshore dropped 13.5% (minus 0.65 Bcf/d), which was largely a result of Tropical Storm Lee. Gross withdrawals are not the same as marketed production, which is calculated by subtracting gas used for repressuring, quantities vented and flared and non-hydrocarbon gases removed in treating or processing operations from gross withdrawals.

A unit of South Korea’s Samsung Group and Korea National Oil Corp. (KNOC) have agreed to buy U.S.-based producer Parallel Petroleum LLC in a deal valued at close to $800 million. Samsung C&T Corp., the trading arm of Samsung Group, agreed to buy 90% of Parallel while KNOC is to purchase the remaining stakes from PLL Holdings LLC, a unit of private equity firm Apollo Global Management LLC. Apollo purchased Parallel in 2009 for $495 million (see NGI, Oct. 5, 2009). KNOC said the deal to buy Parallel was worth $771.5 million. Midland, TX-based Parallel has stakes in eight oil fields and two natural gas fields with total reserves around 68 million boe.

Legacy Reserves LP has backed out of a deal to buy some of Encana Corp.’s natural gas assets in Wyoming because of a groundwater well pollution investigation by federal authorities. The Midland, TX-based operator acknowledged in November that it had agreed to pay Encana $45 million in cash for some of the Calgary operator’s properties in the Pavillion, WY, area. However, Legacy had a chance to review the ongoing investigation by the U.S. Environmental Protection Agency (EPA) into groundwater pollution in the area and decided that the acquisition posed some uncertainty, said a Legacy spokesman. In mid-November EPA reported sampling results that indicated two monitoring wells installed to test water supplies deep within an aquifer near gas drilling locations in Pavillion had high levels of benzene and other chemicals, including petroleum-related compounds. Encana already has agreed to remediate four old waste pits through a voluntary cleanup in cooperation with the Wyoming Department of Environmental Quality.

Atlas Pipeline Partners LP (APL) struck a long-term, fee-based agreement with ExxonMobil Corp. subsidiary XTO Energy Inc. to provide gas gathering and processing services for up to an incremental 60 MMcf/d from the Woodford Shale region of Oklahoma to its Velma processing facility in Velma, OK. The agreement supports APL’s planned 60 MMcf/d expansion of its Velma system. The cryogenic facility is expected to enter service in mid-2012. XTO would use the expanded facility, which would have capacity of 160 MMcf/d after the expansion is completed.

Scottish upstream operator Weir Group plc is extending its reach into North America’s unconventional natural gas and oil fields with a deal to acquire Houston-based Seaboard Holdings Inc. for $675 million. The transaction would complement Weir’s existing wellhead pressure control business in the United States and Canada, which has been struggling to match supply with demand for its pumps and related drilling equipment used by onshore operators. Weir already was planning to expand its manufacturing capacity in Texas and Canada.

A judge in Pennsylvania has denied a request by several Dimock Township families to force Cabot Oil & Gas Corp. to continue delivering potable water to their homes. Environmental Hearing Board Judge Bernard Labuskes Jr. sided with Cabot and the Pennsylvania Department of Environmental Protection (DEP) against the families’ request for an emergency restraining order because they could not demonstrate immediate and irreparable injury from the water deliveries being stopped. Labuskes has given both sides until Wednesday to submit briefs over another, non emergency restraining order on halting the water deliveries. In October the DEP gave Houston-based Cabot permission to discontinue the water deliveries on Nov. 30 because the company had satisfied the terms and conditions of a December 2010 settlement with the agency (see NGI, Oct. 24).

Sasol Ltd. is considering building an ethane cracker and derivatives complex near its existing Lake Charles Chemical Complex in Westlake, LA, which if built would be one of the largest ethane crackers in the country, with production of up to 1.4 million tons per year. Sasol said it expects to complete its feasibility study by mid-2013 and to make an investment decision at that time. The facility could cost $3.5-4.5 billion. Earlier this year the South Africa-based company chose southwestern Louisiana as the site for a gas-to-liquids (GTL) facility, which is slated to be the first plant in the United States to produce GTL transportation fuels and other products (see NGI, Sept. 19).

Pennsylvania researchers have corrected a study that showed increased bromide levels in private water wells after natural gas development occurred nearby. The October report from the bipartisan Center for Rural Pennsylvania, an agency of the Pennsylvania General Assembly, initially found increased bromide levels in seven of the 233 water wells tested before and after drilling or hydraulic fracturing took place nearby, but the Pennsylvania State University researchers responsible for the study reduced that to a single instance after reviewing the data (see NGI, Oct. 31). “The researchers now advise that the bromide concentration data were incorrect due to a lab error from the subcontracted, state-accredited water testing laboratory. The laboratory has since provided a data update,” the authors wrote in a recent error notice. The groups plan to release a revised report after analyzing the data further.

Although not willing to call the issue a “crisis” yet, the Institute for Public Policy and Economic Development found that housing is becoming more expensive in Pennsylvania counties where Marcellus Shale drilling is more active. Those reaping the benefits of mineral leases or industry jobs can afford the increases, but the majority of Pennsylvanians cannot, the study concluded. “In order to mitigate these issues, many policy changes must occur, including special programs and financing instruments as well as changes in planning, zoning and community ordinances,” the partnership of nine Pennsylvania colleges and universities concluded. The group proposed rent control, loan programs and innovative zoning, as well as protections to ensure that renters can’t be evicted without cause.

A New Jersey Assembly panel has approved legislation to ban the treatment, disposal or storage of wastewater from hydraulic fracturing (fracking) in the state but its prospects to achieve passage and reach Gov. Chris Christie’s desk before the session expires in January are dim. Even though the state has no oil and gas drilling, and therefore no fracking, those in favor of the legislation said they wanted to prevent neighboring states from trucking oil and gas drilling wastewater to New Jersey treatment facilities. The legislation (A-4231) specifically would not allow fracking wastewater to be shipped or transported from any other state or treated in the state.

Tulsa-based Oneok Inc. is selling subsidiary Oneok Energy Marketing Co., to Baltimore-based Constellation Energy Group Inc. for $22.5 million plus working capital. Oneok Energy Marketing provides physical and financial natural gas products and services to about 26,000 retail customers mainly in Kansas, Oklahoma, Missouri, Texas, Nebraska, Wyoming and Illinois. The business is accounted for in the Oneok natural gas distribution segment. Oneok said it will continue its wholesale gas marketing activities through its energy services business segment. The transaction is expected to close during the first quarter. Last month shareholders of Constellation and Exelon Corp. approved the merger of the two companies.

Avista Utilities said plans to add 1,000 MW of mostly natural gas-fired generation to meet annual power demand growth of 1.6% over the next 20 years in northern Idaho. Avista said at least three new gas-fired facilities are needed as part of its biennial Integrated Resource Plan being considered by the Idaho Public Utilities Commission (PUC). About 760 MW of new power would come from the gas-fired plants, and the rest (about 240 MW) would come from wind resources. Proposed gas-fired facilities include an 83 average megawatts simple-cycle peaking plant and two separate 270 MW combined-cycle baseload plants.

The Pennsylvania Department of Environmental Protection (DEP) recently published a guidance document arguing that vehicle conversion is allowed under the state’s existing emissions standards. Federal law requires states to adopt either federal low emission vehicle standards, or the standards of the California Air Resources Board (CARB). Pennsylvania chose the CARB standards as its model when creating its Pennsylvania Clean Vehicles Program (PCVP) in 2006, but it did not address the issue of conversions. That silence not only created some confusion among consumers interested in converting their cars and trucks to natural gas, but also allows the state some flexibility on the matter, the DEP believes. The new guidance clarifies that the PCVP allows consumers and manufacturers to use either CARB or U.S. Environmental Protection Agency standards when converting a vehicle to run on natural gas. Although not an actual change in policy, the DEP hopes the guidance makes people more willing to convert cars and trucks.

The Pennsylvania Public Utility Commission (PUC) is accepting public comments through Dec. 22 on a proposed settlement with UGI Central Penn Gas, part of UGI Utilities Inc., a subsidiary of UGI Corp. At issue is a $5,000 civil penalty levied by the PUC against UGI for an incident that occurred in Bedford Township. An investigation found that on Sept. 2, 2009, a four-inch high pressure distribution line was damaged and leaked natural gas during the excavation for new a municipal water and sewer main.

The flood of shale gas depressing prices in Pennsylvania is cutting costs for UGI Utilities Inc., a gas and electricity supplier across eastern Pennsylvania. The company said residential heating bills will fall between 4.5% and 13.5% starting Dec. 1. “The increase of supplies of natural gas from Marcellus Shale has helped create continued downward price pressure on natural gas,” Vicki O. Ebner, senior vice president for customer and government relations, said. That downward price pressure means UGI customers are paying between 23% and 29% less today than three years ago for gas, the company said.

Delta Airlines Inc. plans to upgrade its single daily flight between its hub at Hartsfield-Jackson Atlanta International Airport and the Wilkes-Barre/Scranton International Airport. The airline said starting Jan. 4, a 65-seat jet will make the daily run, an upgrade from the 50-seat jet currently in service. Delta also said beginning March 3 it will add a fourth daily flight between Wilkes-Barre/Scranton and Detroit Metropolitan Wayne County Airport, another of its hubs. Delta restored daily nonstop service to Atlanta on Sept. 7 after dropping the route in August 2009.

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