Chemical

With crude oil prices above $105 a barrel and natural gas prices nearing $10/Mcf, a group of chemical manufacturers Friday called on Congress to look again at lifting the moratoria on drilling off the East and West Coasts.

Farmers from Iowa, school representatives from North Dakota, chemical manufacturing officials from Illinois and pulp and paper workers from Louisiana were paraded up to a news conference microphone Wednesday to tell their stories about how high natural gas prices have hurt their businesses. The Consumer Alliance for Energy Security wants Congress to know there is pain being felt in every sector of the economy and new legislation should be passed to lift offshore drilling moratoria and increase gas supply.

Chemical producers, who have been rocked by escalating natural gas prices, called on the Bush administration this week to lift the restrictions on oil and natural gas drilling in much of the federal Outer Continental Shelf (OCS).

Kerr-McGee Corp.’s chemicals unit, New-Co Chemical Inc., has filed an initial public offering (IPO) for up to $300 million in Class A common stock. However, Kerr-McGee still holds an option to sell New-Co if the opportunity arises. The IPO or sale of the chemicals unit was announced earlier this year so the company could refocus its attention on oil and gas exploration and production (see NGI, May 16). About 90% of the chemicals sold by the unit last year were titanium dioxide, according to the company. In the Securities and Exchange Commission filing on the IPO, the Oklahoma City-based producer did not specify how many shares would be offered or the price of the shares. That information is expected to be disclosed in a later filing. The underwriters are Lehman Brothers and JP Morgan. Kerr-McGee said it wants the chemicals unit sold or spun off from the company by the end of the year.

Kerr-McGee Corp.’s chemicals unit, New-Co Chemical Inc., has filed an initial public offering (IPO) for up to $300 million in Class A common stock. However, Kerr-McGee still holds an option to sell New-Co if the opportunity arises.

Dow Chemical has signed 20-year agreement for the liquefied natural gas (LNG) processing capacity at the proposed Freeport LNG import terminal, which is being built by Cheniere Energy and Contango Oil & Gas Co. on Quintana Island in Brazoria County, TX.

Dow Chemical has signed 20-year agreement for the liquefied natural gas (LNG) processing capacity at the proposed Freeport LNG import terminal, which is being built by Cheniere Energy and Contango Oil & Gas Co. on Quintana Island in Brazoria County, TX.

Bridgeline Holdings LP, a partnership between Enron and Texaco, signed a deal to supply 165 Bcf of gas over five years to Occidental Chemical Corp.’s 778 MW cogeneration facilities in Taft, LA. Terms of the transaction were not released. Bridgeline operates 1,000 miles of pipeline from the Texas/Louisiana border to New Orleans, serving industrial and utility industry customers. It also has 13 Bcf of salt dome storage capacity in the region with broad access to significant Gulf of Mexico pipeline production and wellhead supply. Bridgeline said the deal is a key element in building on its strength to serve the new electrical generation demand throughout the region. This market requires firm, high-volume and deep-swing natural gas service to effectively meet the needs of this new class of merchant electricity generators. “We are eager to commence natural gas deliveries to the Taft facility and feel our unique combination of assets and merchant capabilities are well-positioned to serve this growing market,” stated Hugh H. Connett, vice president of marketing and supply for Bridgeline.

A New Jersey specialty chemical company and two Pennsylvaniasteel companies have announced they will be adding a natural gassurcharge that tracks NYMEX onto the sale price of their productsto reflect the increased cost of fueling the manufacturing process.