Fired

If politicians expect clean-burning natural gas to relieve their coal-fired power generation emissions woes, they need to give gas producers greater access to lands on which they can drill, the Natural Gas Supply Association (NGSA) said last week.

Mirant Corp. said last week it reached agreement with LS Power Equity Partners, a member of the LS Power Group, for the sale of six U.S. gas-fired plants for $1.407 billion, which includes estimated working capital. Net proceeds to Mirant after extinguishing $83 million of project-level debt are expected to total $1.324 billion. The company does not expect to recognize any significant tax or book gain on the transaction.

If politicians expect clean-burning natural gas to relieve their coal-fired power generation emissions woes, they need to give gas producers greater access to lands on which they can drill, said the Natural Gas Supply Association (NGSA).

The threat of hurricanes, growing gas-fired generation, a plethora of LNG projects and the tiny amount of storage capacity added over the last decade or more have led to a spike in the value of gas storage capacity, FERC staff said in a presentation Thursday at the Commission’s regular meeting. The presentation seemed to provide support for the Commission’s final rule issued Thursday relaxing market power tests for new storage capacity.

Oneok Inc. said it has been selected to provide subsidiaries of FirstEnergy Corp. with natural gas supply and gas management services for three natural gas-fired power plants. Under the three-year contract, Oneok Energy Services will serve as the exclusive gas commodity and services provider to FirstEnergy Generation Corp.’s power plants in Richland and West Lorain, OH, and Sumpter, MI.

Newcomers to the Canadian arctic natural gas scene have fired the opening shot in a battle for access to transportation services in the C$7 billion (US$6 billion) Mackenzie Gas Project sponsored by the producer old guard.

Spring and summer gas prices will have to remain in the $6/MMBtu area (Henry Hub) or lower to rebuild industrial demand, stimulate gas-fired power generation (whose main competitor is now coal rather than residual fuel oil) and deter liquefied natural gas (LNG) imports, said Credit Suisse analyst Carl Kirst in a research note on Wednesday.

While some energy industry members likely wish that so much gas-fired power generation capacity had not been built — industrial gas consumers, for instance — the fact is that it’s here to stay, and the gas-power convergence is still very much with us.

In what is becoming an extremely verbose war between neighboring South Dakota energy holding companies, NorthWestern Corp. Monday fired off another letter to its pursuer, Black Hills Corp., reiterating that its board has not rejected the Black Hills’ offer to start serious merger talks, and it wants to consider the offer as one of several strategic alternatives, but only after a confidentiality agreement between the two companies is hammered out. Black Hills is balking at the current confidentiality proposal.