Due to fabrication problems on Line 1300/1301, a total outage of the San Juan Crossover has been extended through nomination cycles 1 and 2 Friday, El Paso said. Zero capacity on the crossover previously had been scheduled to end after Thursday’s gas day (see Daily GPI, May 14). “Barring any more unforeseen problems, the capacity can possibly be raised to 584 MMcf/d for [Friday’s] Cycle 3…which will include the reduction of 44 MMcf/d due to one section of Line 1301 remaining out of service,” the pipeline said. Restoration of full crossover capacity of 628 MMcf/d is set for Saturday.
Juan
Articles from Juan
Former Dynegy Trader Valencia Loses Bid for Acquittal/New Trial
Former Dynegy Inc. trader Michelle Valencia — who was convicted in August of seven counts of wire fraud for reporting false trade data to gas price index publishers (see NGI, Aug. 7) — was denied her request for acquittal or a new trial (see NGI, Aug. 21) in a Dec. 14 judge’s order.
EOG’s Papa Claims Barnett Much Bigger Than Estimated
The prolific Barnett Shale natural gas field, second only to the San Juan Basin in New Mexico, appears to extend much farther south than previously estimated, EOG Resources Inc. CEO Mark Papa said Wednesday. And based on its success in the Texas shale, Papa said EOG is going to focus on discovering new plays amenable to horizontal drilling — a key driver in the Barnett’s growth.
Transportation Notes
El Paso reported completing a two-day San Juan Crossover maintenance project ahead of schedule early Friday. It raised crossover capacity to 415 MMcf/d effective with Cycle 3 nominations Friday (prorated for partial-day flow) and planned to increased it further to 615 MMcf/d effective with Cycle 1 nominations Saturday.
Hurricanes Aside, Producers Reap Profits on High Commodity Prices
Record oil and natural gas prices trumped the serious damage inflicted to offshore Gulf of Mexico operations by hurricanes in the third quarter, with ExxonMobil Corp. reporting the highest-ever earnings in corporate history, up 75% from a year ago. Majors Royal Dutch Shell plc and ConocoPhillips, as well as super independents Burlington Resources Inc., Kerr-McGee Corp. and Marathon Oil Co., also were able to overcome extensive offshore hurricane damage to reap massive profits — but there were few production gains.
Nearly All Points Keep Rising on Hurricane Dennis Threat
Except for declines of less than a dime in San Juan Basin and at the Southern California border into PG&E, prices were up across the board again Wednesday. Tropical Storm (TS) Cindy’s disruption of offshore output was rapidly fading, but the potentially greater menace of Hurricane Dennis this weekend continued to stoke supply worries. A 30.4-cent screen spike Tuesday also provided residual support for the cash market.
Transportation Notes
Transwestern said it has received a number of shipper requests to move incremental volumes from the WFS [Williams Field Services] Milagro plant in San Juan Basin, but these requests have exceeded the current meter run’s capacity. Thus Transwestern will performing an estimated four to five hours of maintenance Thursday on the meters used for the receipt of gas from the Milagro plant. The work will increase the capacity of the meters from 400 MMcf/d to about 600 MMcf/d, Transwestern said.
Milder Weather Trends Push Prices Lower
Only an advance of less than a dime by El Paso’s Bondad pool in San Juan Basin averted an across-the-board sweep of falling prices Friday. Quotes were pressured lower by dwindling heating load in the East, the previous day’s screen drop of 6 cents and the slump in industrial demand that typically accompanies a weekend trading period.
Market Slide Continues as Offshore Shut-Ins Ending
San Juan Basin flatness was the exception to Thursday’s anticipated continuing slide in prices. Otherwise, losses between a nickel and a little over a dime in the Rockies/Pacific Northwest, California and intra-Alberta were fairly moderate in comparison with declines ranging from about a dime to nearly 30 cents elsewhere.
Industry Briefs
Energen Resources Corp. closed its previously announced purchase of San Juan Basin coalbed methane properties from a private company for an adjusted purchase price of $263 million. Located in the under-pressured Fruitland coal play, more than half of the estimated 240 Bcfe of proved gas and gas liquids (NGL) reserves are behind pipe and undeveloped, the company said. Gas accounts for 80% of the estimated proved reserves, with NGL making up the balance. The company also estimates that there are up to 60 Bcfe of probable reserves. A large development inventory from the acquisition is estimated at more than 110 infill wells. Future development costs are expected to be $50 million.