An explosion in Mexico City on Thursday at Mexico’s state-owned Petroleos Mexicanos, or Pemex, which killed at least 33 and injured 121 or more, may have been caused by an accident, authorities said. According to reports, the explosion occurred in the basement of the B2 Building, a seven-story structure that serves as an annex adjacent to Pemex’s executive tower. The blast destroyed most of the annex’s first and second floors but the building had not collapsed. Pemex reportedly said the explosion may have been caused by an electrical failure or a problem with a natural gas line.

The coming spring could rank among the top 10 warmest on record, but that warmth isn’t expected to be as widespread or as extreme as last year, according to‘s long-range forecast team. Winter weather is likely to hold on longest — into March — across the Northeast and Northwest, while another warm spring is expected across the Plains and Rockies, the forecasters said. Winter storms may impact the Northeast into March, but snowfall will be accompanied by seasonable cold, rather than the arctic chill that gripped the region in January, the forecasters said. Andover, MA-based Weather Services International has also said it expects February to be colder than normal in the Northeast and much of the rest of the country, with warmer-than-normal temperatures likely to dominate in March and April (see NGI, Jan. 28).

The Federal Energy Regulatory Commission approved Columbia Gas Transmission‘s customer settlement that proposes $1.5 billion in upgrades to the pipeline system over the next five years. The pipeline proposes to invest about $300 million annually, in addition to $1 million in ongoing maintenance, over the 2013-2017 period on system improvements, including replacing about 1,000 miles of large-diameter interstate pipeline, primarily bare steel; replacing and updating more than 50 critical compressor units; uprating pressures and looping systems; and expanding inline inspection capabilities. The settlement, filed in September, establishes a mechanism for Columbia to recover the revenue, which could cost about $4 billion over a 10- to 15-year period. The approval comes more than a month after an explosion on Columbia Gas Transmission’s system near the pipeline’s Lanham Compressor Station near Sissonville, WV, a rural community about 15 miles north of Charleston (see related story). Infrastructure work will take place across Kentucky, Maryland, Ohio, Pennsylvania, Virginia and West Virginia, where most infrastructure is more than 40 years old.

The U.S. District Court for the Eastern District of Louisiana has approved an agreement by BP plc with the Department of Justice (DOJ) to plead guilty to 14 criminal charges, including manslaughter, and pay more than $4 billion in criminal fines related to the Macondo deepwater well blowout in April 2010 (United States of America v. BP Exploration and Production Inc., No. 12-292). BP had agreed in November to pay more than $4.5 billion in fines to settle the criminal claims from the well blowout and rig explosion, which killed 11 men and destroyed Transocean Ltd.‘s Deepwater Horizon platform (see NGI, Nov. 19, 2012). Under the agreement, BP pleaded guilty to 11 felony counts of misconduct or neglect of ships officers relating to the 11 deaths. It also agreed to plead guilty to one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction of Congress.

Nexen Inc. and CNOOC Ltd. have pushed back by 30 days the completion of the Canadian company’s C$15.1 billion takeover by the arm of state-controlled China National Offshore Oil Co. The “outside date” of the deal has been extended to March 2; the original outside date had been Jan. 31. Key regulatory approvals have been received from Canada (see NGI, Dec. 10, 2012), the People’s Republic of China, the United Kingdom and the European Union. Nexen shareholders voted to accept the offer back in September (see NGI, Sept. 24, 2012), but completion of the deal remains subject to regulatory approval from the United States, Nexen said. The companies are seeking approval from the Committee on Foreign Investment in the United States (CFIUS), which is authorized to review transactions that could result in control of a U.S. business by a foreign entity.

The Pennsylvania Department of Environmental Protection (DEP) is undertaking comprehensive study to last up to 14 months of naturally occurring levels of radioactivity in by-products of oil and natural gas development. Samples from statewide sites would be collected of flowback water, rock cuttings, treatment solids and sediments at well pads and at wastewater treatment and waste disposal facilities. The agency will also analyze radioactivity levels in pipes and well casings, storage tanks, treatment systems and trucks. DEP, which routinely reviews radioactivity data in wastes generated by industries, said the new study conducted with Perma-Fix Environmental Services, “is aimed at ensuring that public health and the environment continue to be protected.”

Penn Virginia Corp. reported proved oil and gas reserves of 113.5 million boe at the end of 2012, compared with 2011’s 130.3 million boe, excluding 16.9 million boe of reserves sold in July (see NGI, July 23, 2012). Proved oil and natural gas liquids (NGL) reserves totaled 45.5 million boe, while pro forma gas reserves fell 161 Bcf (or 26.9 million boe) between 4Q2011 and 4Q2012, a decrease of 28%. 4Q2012 production totaled 1.4 million boe (15,444 boe/d), about 56% weighted toward oil and NGLs.

Antero Resources reported a 73% increase to its proved reserves at the end of 2012, while its proved, probable and possible (3P) reserves increased 94% and natural gas liquids (NGL) reserves increased by 170% on discoveries in the Marcellus and Utica shales. Proved reserves totaled 4.9 Tcfe for 2012, pro forma for asset sales (see NGI, Nov. 12, 2012; June 11, 2012). The Marcellus accounted for 97% of its proved reserve volumes, and 21% was proved. The Utica accounted for the remaining 3%. The company said 75% of its proved reserve volumes were natural gas, 24% were NGL and 1% was crude oil. 3P reserves totaled 26.1 Tcfe, including 16.0 Tcf of natural gas, 1.6 billion bbl of NGLs and 55 million bbl of oil.

Encana Corp. has commissioned the Cavalier liquefied natural gas (LNG) facility in Alberta to fuel heavy-duty trucking and other fleets in Western Canada and elsewhere. The first customers of the facility include Calgary’s Ferus Inc., an energy services company, as well as Canadian National Railway Co., which is testing two mainline diesel-electric locomotives fueled mostly by natural gas, which Encana is providing (see NGI, Oct. 1, 2012). The Cavalier facility is to receive feedstock from Encana’s nearby gas plant. The producer is working on another facility that would be near Grande Prairie, AB.

California utility watchdog The Utility Reform Network (TURN) has asked the California Public Utilities Commission to reverse its December approval allowing $214 million of utility ratepayer support for part of Pacific Gas and Electric Co.’s (PG&E) multi-year natural gas pipeline safety enhancement plan (see NGI, Dec. 24, 2012). The CPUC OK denied utility ratepayer support for most of the cost of the utility proposal. TURN is arguing that the decision allows PG&E to get ratepayer support for replacing transmission pipeline segments that were untested and of questionable safety leading up to the San Bruno, CA, rupture in 2010.

Trans Energy Inc. sold its drilling rights and working interest in shallow wells targeting the Devonian Shale to an undisclosed buyer for $2.75 million but has retained a royalty interest on most rights to deeper formations, including the Marcellus and Utica shales. The buyer would assume the role of operator for about 300 wellbores. Trans Energy retained rights to ensure that production continues to maintain its existing leasehold and it has the right to participate in up to 20% of any well drilled by the buyer, unless the latter fails to fulfill its development commitments.

The West Virginia Department of Environmental Protection (DEP) has missed deadlines for two of the three studies it was required to perform under the state’s Natural Gas Horizontal Wells Control Act (see NGI, Dec. 19, 2011). The DEP was to complete a study on well location restrictions (focused on noise, light, dust and volatile organic compounds from drilling operations) by Dec. 31, and a study on pits and impoundments by Jan. 1, with the results presented to the West Virginia Legislature. An agency spokeswoman said DEP is waiting for additional information from researchers from West Virginia University, to complete all three studies. A third study is due July 1.

A portion of excess funds from a recent Colorado state revenue forecast should be spent to study the impact of oil and gas exploration and development on air quality, according to the Governor’s Office of State Planning and Budgeting (OSPB). In an amended spending request to the state’s Joint Budget Committee, the OSPB asked for $492,776 for the Colorado Department of Public Health and Environment to conduct the survey, and another $567,000 from the state’s capital construction budget be used to purchase equipment for the survey.

Home heating products retailer Dead River Co. plans to sell and supply compressed natural gas (CNG) to commercial and institutional customers in central, northern and eastern Maine from Xpress Natural Gas’ (XNG) soon-to-be-completed CNG terminal in Washington County, ME. The customers to be served typically use at least 75,000 gallons of heating oil annually. Boston-based XNG currently trucks liquefied natural gas to industrial customers.

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