Availability

Declining hydropower availability in the Pacific Northwest points to a higher reliance on natural gas in the future, according to a new report by the Northwest Gas Association (NWGA), a group that includes the major gas distribution and transmission companies in the region, which includes 44,000 miles of gas pipelines and about 2.5 million gas consuming homes, businesses and industry.

The Coast Guard and the Maritime Administration (MARAD) issued a Federal Register notice on Friday announcing the availability of a draft environmental impact statement (DEIS) on Freeport-McMoRan Energy LLC’s proposed Main Pass Energy Hub liquefied natural gas (LNG) deepwater port license application. The port would be located in the Gulf of Mexico in Main Pass Lease Block 299 at a former sulphur mining facility about 16 miles southeast of Venice, LA, in a water depth of 210 feet. It would utilize four existing platforms, bridges and other structures and would include construction of two additional platforms to support LNG storage tanks (totaling 145,000 cubic meters) and a ship berthing area. The project also would include construction of 192 miles of 12-36 inch diameter pipelines. Main Pass Energy Hub would be developed over an existing salt formation in which storage caverns will be developed with a capacity to store 28 Bcf of natural gas. The terminal is expected to vaporize and deliver 1 Bcf/d of natural gas. Three public meetings will be held on the project on July 18, 19 and 20 in Alabama, Mississippi and Louisiana. A copy of the DEIS is available at http://dms.dot.gov under docket number 17696.

The Minerals Management Service (MMS) last Monday announced in the Federal Register the availability of the Proposed Notice of Sale 196, an offshore oil and gas lease sale in the western Gulf of Mexico, scheduled for Aug. 17.

The Minerals Management Service (MMS) Monday announced in the Federal Register the availability of the Proposed Notice of Sale 196, an offshore oil and gas lease sale in the western Gulf of Mexico, scheduled for Aug. 17.

The Minerals Management Service (MMS) Friday announced the availability of the Final Notice of Lease Sale 197, an offshore oil and gas lease sale in the Eastern Gulf of Mexico, scheduled for March 16, 2005. This lease sale is the third Eastern GOM Outer Continental Shelf lease offering in the last five years. The configuration is the same as MMS Eastern GOM Lease Sales 181 and 189, held in December 2001 and December 2003, respectively. The lease sale area encompasses the unleased blocks in an area of the Eastern GOM OCS Planning Area. The area is directly south of Alabama. These 124 unleased blocks cover about 714,240 acres and are located from 100 to 196 miles offshore in water depths of 1,600 to more than 3,425 meters. Estimates of undiscovered economically recoverable hydrocarbons in this proposal range from 65 to 85 million barrels of oil and 0.265 to 0.34 Tcf of natural gas. The Final Notice of Lease Sale 197 will be posted on the MMS website at http://www.gomr.mms.gov.

The lack of adequate transmission infrastructure and a policy environment that has a stop-and-start quality to it, including the federal wind power production tax credit (PTC) that was recently extended through December 2005, are key hurdles to the further development of wind power in the U.S., participants at a FERC-sponsored technical conference said last week.

Any concerns over worldwide gas supply availability probably will be short lived in light of the large number of natural gas liquefaction projects being planned. According to a report released last week by Arlington, VA-based consulting firm Energy Ventures Analysis (EVA), there are a total of 63 liquefaction facilities proposed worldwide and based on EVA’s assessment, at least 41 of them, totaling more than 30 Bcf/d of LNG supply, are likely to be built.

Declining availability of hydroelectric generation in the West and the larger than normal discount for natural gas compared to Gulf Coast distillate fuel, propane and NGLs will contribute to the narrowing of the storage surplus in the weeks before the Nov. 1 start of the winter season, analyst Stephen Smith said last week. Nevertheless, Smith is predicting storage stocks on that date (sans hurricane interruptions) will total about 3,200 Bcf, above the 3,030 Bcf average for Nov. 1 over the last 10 years.

Declining availability of hydroelectric generation in the West and the larger than normal discount for natural gas compared to Gulf Coast distillate fuel, propane and NGLs will contribute to the narrowing of the storage surplus in the weeks before the Nov. 1 start of the winter season, according to analyst Stephen Smith. Nevertheless, Smith is predicting storage stocks on that date (sans hurricane interruptions) will total about 3,200 Bcf, above the 3,030 Bcf average for Nov. 1 over the last 10 years.