Estimated

Christopher Helms, president of CMS Panhandle Pipe Line Co.,estimated that LNG use will swell to take up 3.5% of the predicted30 Tcf gas demand by 2010. In an interview with NGI, Helms saidPanhandle is working toward building LNG trade to the same level ascrude oil trading, complete with a futures and financial market,with Lake Charles serving as the hub for all operations.

The failure of a 7,000-horsepower motor has crippledTranswestern’s Bloomfield Compressor Station on the San JuanLateral, curtailing an estimated 100,000 MMbtu/d at 20 points. Thepipeline expects motor repairs to last until July 7.

NOVA estimated that repairs to a flange assembly leak on its NorthLateral (see Daily GPI, May 17), whichstarted Wednesday, would take 24-36 hours to complete. Some receiptsupstream of Dusty Lake Compressor Station are being curtailed by thework.

Key Energy Group Inc. announced Tuesday that it has signed adefinitive merger agreement to acquire Dawson Production Servicesfor an estimated $352 million. The terms of the agreement call forKey Energy to purchase 11.5 million outstanding shares of Dawsoncommon stock for a total of $202 million, and to assume Dawson’sexisting debt of $150 million.

Minerals Management Service Director Cynthia Quartermanestimated the federal government would lose $500 million/year if aroyalty-in-kind programs were instituted for oil and gas producers.The projected revenue loss plus her claim that MMS already has thelegal authority to collect royalties in kind were reasons cited forthe agencies opposition to legislation recently proposed by Rep.Mac Thornberry (R-TX) that would replace the current gross proceedsroyalty collection program with RIK.

A group of natural gas producers and marketers has asked FERC toextend until July 9th the deadline for producer payments of anestimated $500 million in customer refunds. The refunds, which aredue March 9th, are owed to customers who purchased gas produced inKansas during the 1980s at costs that, because they included thestate’s ad valorem tax, exceeded the level allowed under theNatural Gas Policy Act (NGPA).