The Federal Energy Regulatory Commission has approved Empire Pipeline Inc.’s request to use its existing import facilities at the U.S.-Canadian border to export natural gas to Canada, noting that both countries are signatories to the North American Free Trade Agreement [CP10-136]. The 233-mile, 24-inch diameter pipeline said it has begun receiving requests for firm transportation service from primary receipt points in the U.S. to a delivery point at its interconnection with TransCanada Pipelines Ltd. at the U.S.-Canada border. Empire, a wholly owned subsidiary of National Fuel Gas Co., said expanding production from the Marcellus Shale is driving gas to new markets (see NGI, Sept. 13).

Seneca Resources Corp., a subsidiary of National Fuel Gas Co., is in the hunt to secure more joint venture (JV) partners to help develop the company’s Marcellus Shale portfolio following the results from two wells in Pennsylvania. A Seneca-operated well on DCNR Tract 100 in Lycoming County, PA, tested at a 24-hour rate of 15.8 MMcf/d on a 28/64-inch choke. A Clearfield County, PA, well operated by Seneca JV partner EOG Resources Inc. flowed at a 24-hour rate of 8.9 MMcf/d. Seneca and EOG since 2007 have been testing the potential of Seneca’s 935,000 net acres in the Pennsylvania portion of the gas shale play (see Daily GPI, Aug. 10, 2009; Feb. 8, 2007).

Swift Energy Co. has made a long-term agreement for gas gathering and treating services in South Texas with Meritage Midstream Services subsidiary Eagle Ford Escondido Gathering. The agreement involves construction of a pipeline to the company’s Fasken operating area in Webb County, TX. Swift Energy will have up to 40 MMcf/d of firm capacity on the new pipeline. Construction is expected to be completed by December. Swift Energy also has agreed to a long-term sales contract with Kinder Morgan Texas Pipeline LLC, and it has extended contracts for two horizontal rigs currently drilling by 12 and 15 months from their current terms due to expire Dec. 31.

Houston-based Gastar Exploration Ltd. has inked a joint venture (JV) agreement with South Korean investment firm Atinum Partners Co. to develop Marcellus Shale acreage in West Virginia and Pennsylvania. The transaction, with affiliate Atinum Marcellus I LLC, is valued at around $70 million. The JV also includes a plan by the partners to review potential shale acreage that Gastar has in Ohio and New York for future potential acquisitions. To gain a 50% interest in the properties, Atinum agreed to pay Gastar $30 million for an initial 21% stake in the Pennsylvania and West Virginia shale properties, which total about 34,200 acres, and $40 million of the drilling costs. With the initial investment, Atinum would own a half-share in the properties. The three-year program would require Gastar to drill one well this year, at least 12 in 2011, and 24 wells in both 2012 and 2013. Gastar would continue to serve as operator of all of the Marcellus Shale interests in the JV.

UGI Corp. midstream unit UGI Energy Services Inc. has agreed to gather Marcellus Shale production of Citrus Energy Corp. in Wyoming County, PA, for delivery to Tennessee Gas Pipeline Co.‘s interstate system in Susquehanna County. UGI Energy Services will acquire and construct facilities to handle up to 120,000 Dth/d. Subject to permitting and regulatory approvals, service is expected to begin as early as spring 2011. This is UGI Energy Services’ first project to provide gathering infrastructure to Marcellus Shale producers, the company said.

New Pennsylvania wastewater treatment requirements have prompted Fountain Quail Water Management to add a third evaporator unit at its shared facility in Williamsport, PA, the company said. The subsidiary of Calgary-based Aqua-Pure Ventures Inc. is working with Eureka Resources to recycle flowback and produced water from Marcellus Shale gas wells. The new unit has joined two others that have been recycling up to 200,000 gallons of wastewater daily since mid-June, expanding capacity by 50%. The facility now serves several operators, including Range Resources Inc., ExxonMobil Corp. subsidiary XTO Energy Corp. and Chesapeake Energy Corp.

The Pennsylvania Securities Commission (PSC) has ordered an Allegheny County firm and its owner to stop selling unregistered securities related to Marcellus Shale wells in the state. The commission issued a summary order to cease and desist against McKelvey Gas Co. (MGC) and Albert T. McKelvey, both of Gibsonia, PA. MGC was offering for sale investments in a Marcellus Shale gas well drilling project; McKelvey was listed as the owner. According to the commission, McKelvey placed an advertisement titled “Investment Opportunity” in a Pittsburgh-area newspaper stating, “Here is an opportunity to earn money from the Marcellus shale gas well drilling.” The ad specified a minimum investment is $5,000; that “all investment notes are locked in for 36 months” and investors will earn 6% interest the first year, 6.5% interest the second year and 7% interest the third year. At least one Pennsylvania resident read the ad and telephoned McKelvey for information. Anyone who is or was solicited by MGC or McKelvey was asked to notify the commission by calling (800) 600-0007, or in Harrisburg, PA, at (717) 787-8061.

Calgary-based Calfrac Well Services Ltd. is increasing its capital spending program into 2011 by C$56 million, or 25%, to accommodate the jump in hydraulic fracturing work being performed on wells in U.S. shale plays. Calfrac said the increased spending is related to its long-term minimum commitment contract with EXCO Resources (PA) LLC, which is a 50-50 joint venture in the Marcellus Shale between EXCO Resources Inc. and BG Group plc. Calfrac plans to use the bump in capital spending to add another 55,000 hp to its fracturing fleet, bringing its total capacity to 650,000 hp. About C$66 million of the capital spending, which would come from cash flow and debt, is earmarked for 2011, the company said.

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