Materialize

Growing natural gas liquids (NGL) production — particularly that of ethane — is a positive story for the petrochemical industry as well as oil and gas producers. However, talk of an NGL glut is growing louder as the industry continues to grow production — particularly from liquids-rich shale plays — and build out infrastructure. Opinions vary on what is to come.

An estimated $10 billion of floating production systems (FPS) designed to explore offshore for oil and natural gas failed to materialize as the global economy began to derail last year, but a recovery in the sector should begin in 2010, energy consultant Douglas-Westwood said in a new report. Projects worth an estimated $46 billion total are forecast to begin ramping up through 2013. Africa, North America and Latin America are expected to take 59% of the forecast global FPS capital expenditures, with an estimated 121 FPS facilities expected to be installed worldwide through 2013. Brazil’s national oil company Petroleo Brasilerio (Petrobras) is expected to be the biggest spender. Last year Petrobras was given approval by the Minerals Management Service to develop the first floating production storage offloading (FPSO) facility in the deepwater Gulf of Mexico (see NGI, May 5, 2008). The FPSO is to be built in the Cascade-Chinook area in the Walker Ridge region of the Lower Tertiary trend, which is 165 miles offshore Louisiana in 8,200 feet of water.

With an outside rescue yet to materialize, SemGroup LP, which filed for bankruptcy in July after announcing $3.2 billion in trading losses, said last week its management is committed to maximizing recoveries for creditors and equity holders, as required by the bankruptcy code.

With an outside rescue yet to materialize, SemGroup LP, which filed for bankruptcy in July after announcing $3.2 billion in trading losses, said Wednesday its management is committed to maximizing recoveries for creditors and equity holders, as required by the bankruptcy code.

Steady buying in the last 30 minutes of trading was not enough to overcome a massive sell-off on the opening bell and the January natural gas futures contract was left with a 22.9 cent decline on its last day as prompt contract at Nymex Monday. At $6.15, January’s final resting place is almost equidistant between its $7.55 spike high from earlier in the month and the December 2003 contract’s $4.86 closing price.

After two closing dates failed to materialize earlier in the week, Edison International, parent to financially ailing Southern California Edison Co., announced Thursday its newly created nonutility financing arm has completed a $1.2 billion debt restructuring that will close Monday. Through a complicated set of transactions within the Edison family of companies, the net proceeds ultimately will be used by Edison International to pay off loans due this year.

It doesn’t matter whether forecasters’ predictions of an earlycold winter materialize or not. Under any short-termweather/storage scenario, Salomon Smith Barney (SSB) continues tobe very bullish on the outlook for natural gas prices.

It doesn’t matter whether forecasters predictions of an earlycold winter materialize or not. Under any short-termweather/storage scenario, Salomon Smith Barney (SSB) continues tobe very bullish on the outlook for natural gas prices.

One year into electric deregulation, the benefits promisedconsumers by the California legislature have failed to materialize,making monopoly utilities the primary winners in the state’sderegulation game, according to San Francisco-based The UtilityReform Network (TURN), the state’s major utility consumer group.