Direct

In a move that pretty much eliminates its potential as a direct buyer of future liquefied natural gas (LNG) should it show up in California, the City of Long Beach’s municipal gas utility closed a 30-year pre-pay supply deal last Thursday that will satisfy 80-90% of its 12-13 Bcf annual load with terms that will keep its retail rates below the surrounding Sempra Energy utilities for the next three decades, according to its general manager.

Total acquisitions and divestitures of U.S. energy assets by foreign direct investors (FDI) fell to $10 billion in 2005 from $12 billion in the prior year, the Energy Information Administration (EIA) said in a report released last Wednesday.

Total acquisitions and divestitures by foreign direct investors (FDI) of U.S. energy assets fell to $10 billion in 2005 from $12 billion in the prior year, the Energy Information Administration (EIA) said in a report released Wednesday.

The Dallas-based Inter-American Development Bank (IADB) said Thursday that it will formally review Peru LNG’s request for a direct loan of $400 million for the development of a liquefied natural gas (LNG) export project in Peru. The project would deliver LNG to regasification terminals on Mexico’s West Coast and potentially to the U.S. West Coast starting in 2010. Hunt Oil, Spain’s Repsol and Korea’s SK Corp. are partners in the project, which would be located in Pampa Melchorita, Peru. The total investment in Peru LNG is expected to reach up to $3.2 billion. The project will take 620 MMcf/d of natural gas from the Ayacucho Mountains through a 250-mile, 32-inch diameter pipeline to the single-train liquefaction plant on the coast south of Lima, where it will be put into tankers bound for the western seaboard of North America. The Camisea E&P project has 8.7 Tcf of estimated reserves and adjacent development is expected to access another 3.5 Tcf of reserves. Gas production will likely exceed domestic demand for the foreseeable future, so project sponsors would like to export any excess to the North American West Coast.

In what was almost a direct reversal of Friday’s market, prices tended to fall Monday in most of the East while a majority of western points engaged in rallies. The return of industrial load from a weekend hiatus and hotter weather from the south-central states through the Southwest contributed to gains, while the softness could be attributed to the previous Friday’s screen decline and generally benign temperatures outside the southern U.S.

Draft energy policy legislation under review in Virginia would direct the Virginia State Corporation Commission (SCC) to identify not more than three sites in the state as “optimal” locations for a liquefied natural gas (LNG) facility, three for nuclear power plants and other sites for wind energy facilities. However, the measure could stir controversy since it would exempt such sites from provisions of land use plans or zoning ordinances that would otherwise apply to the projects.

While there are no loan guarantees or other direct subsidies, Canada’s Arctic natural gas project is studded with extras spawned by political aspects of opening up a new supply region with a touchy population.

The New York Public Service Commission voted last Thursday to direct the state’s regulated natural gas utilities to file special cost-based rates for gas delivery to residential customers that have their own on-site “distributed” power generation. The new rates are expected to be lower than those currently in place.

FERC recently issued an order conditionally accepting an offer of settlement previously filed by Oklahoma Gas & Electric Co. (OG&E), clearing the way for the utility to move forward with its efforts to buy a majority stake in an Oklahoma power plant from NRG McClain.