2009

After more than half a century as the Canadian supply mainstay, Alberta natural gas production has peaked and will decline no matter how much drilling producers do, the province’s industry watchdog agency says.

After more than half a century as the Canadian supply mainstay, Alberta natural gas production has peaked and will decline no matter how much drilling producers do, the province’s industry watchdog agency says.

The shortest distance between two points doesn’t cut it in the world of natural gas pipelines. By the beginning of 2009, when Phase III of the new Rockies Express (REX) pipeline is operational, it will be cheaper to haul natural gas nearly 2,000 miles from the Rocky Mountain fields of Colorado, Wyoming, Utah and Montana to the northeastern megalopolis than it will be to carry gas approximately 1,300 miles from the Gulf Coast to the Northeast, according to a new report by Bentek Energy.

The shortest distance between two points doesn’t cut it in the world of natural gas pipelines. By the beginning of 2009, when Phase III of the new Rockies Express (REX) pipeline is operational, it will be cheaper to haul natural gas nearly 2,000 miles from the Rocky Mountain fields of Colorado, Wyoming, Utah and Montana to the northeastern megalopolis than it will be to carry gas approximately 1,300 miles from the Gulf Coast to the Northeast, according to a new report by Bentek Energy.

Liquefied natural gas (LNG) is becoming more economic compared with drilling in many U.S. basins, and by 2009, it could compete with wellhead supply, according to a study by Pickering Energy Partners Inc.

Liquefied natural gas (LNG) is becoming more economic compared with drilling in many U.S. basins, and by 2009, it could compete with wellhead supply, according to a study by Pickering Energy Partners Inc.

Atmos Energy subsidiary Atmos Pipeline and Storage LLC plans to seek an exemption from regulatory oversight by the Federal Energy Regulatory Commission for a 20-inch diameter natural gas gathering system it plans to build in Eastern Kentucky. The proposed 50-mile Straight Creek Gathering System would be capable of moving up to 100,000 MMBtu/d with the ability to expand to 225,000 MMBtu/d. It is designed to relieve transportation constraints and allow gas to flow from shut-in wells. The $80 million system would originate in Floyd County, KY, and extend to an interconnect with the Tennessee Gas Pipeline in Carter County, KY. Atmos said the project is supported by independent oil and gas producers in the area, including Kinzer Drilling, which will have an ownership stake in the project. More than a dozen other producers have signed memoranda of understanding to commit gas volumes to the system and to agree to commercial terms. “We expect our Straight Creek project to help boost natural gas drilling and production in the Big Sandy region of Kentucky,” said Mark H. Johnson, senior vice president, nonutility operations, of Atmos Energy. “The gathering system should help provide year-round dependability for gas producers and should indirectly benefit natural gas customers by helping bring more gas supplies to market as demand continues to grow.” Johnson said production from 1,700 gas wells on the eastern side of the state has been shut in. Construction is expected to begin in the fall of 2006, with operations expected to begin by the summer of 2007.

ExxonMobil Corp. confirmed Tuesday that about 2 Bcf/d of liquefied natural gas (LNG) will be headed to the U.S. marketplace from Qatar in 2008 or 2009. The company held a ceremony in Doha, Qatar with Qatar Petroleum, its partner in RasGas LNG, Tuesday to announce the launch of Ras Laffan LNG (RL3), a $14 billion gas production, liquefaction, transportation and regasification project that will include two LNG production trains totaling 15.6 million metric tons of LNG per year.

U.S. liquefied natural gas (LNG) terminal development may be impacted by the uncertainty of oversupply in 2007-2009, two industry insiders said last week. And for those projects now on the table, the Gulf Coast may hold the advantage because of its vast pipeline infrastructure.