The wait for the Independence Hub natural gas deepwater production platform in the Gulf of Mexico to come back on-line got a little longer last week as Enterprise Products Partners LP announced that it was revising the restart date from “mid-May” to the “first half of June,” provided there are no “unexpected weather issues.”
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Futures Climb as Independence Hub Restart Gets Pushed Back
Concern surrounding the delay in restarting the Independence Hub natural gas deepwater production platform in the Gulf of Mexico gave bulls a little boost overnight Tuesday and into Wednesday as June natural gas futures recorded an overnight high for the move of $11.794 before closing out Wednesday’s regular session at $11.598, up 17.6 cents from Tuesday’s close.
Independence Restart Now Set for ‘First Half of June’
The wait for the Independence Hub natural gas deepwater production platform in the Gulf of Mexico to come back on-line got a little longer Tuesday night as Enterprise Products Partners LP announced that it was revising the restart date from “mid-May” to the “first half of June,” provided there are no “unexpected weather issues.”
First West Coast LNG Site to Stay Quiet in 2008
Sempra Energy’s Costa Azul facility in North Baja California, Mexico, the first liquefied natural gas (LNG) receiving terminal on the West Coast of North America, may sit mostly idle after it is deemed commercially available later this spring. Nevertheless, Sempra will earn a profit based on capacity payments from part of Royal Dutch Shell that holds a contract for half of the 1 Bcf/d terminal’s throughput.
First West Coast LNG Terminal to Be Mostly Quiet in 2008
Sempra Energy’s Costa Azul facility in North Baja California, Mexico, the first liquefied natural gas (LN G) receiving terminal on the West Coast of North America, may sit mostly idle after it is deemed commercially available later this spring. Nevertheless, Sempra will earn a profit based on capacity payments from part of Royal Dutch Shell that holds a contract for half of the 1 Bcf/d terminal’s throughput.
Chevron: Deepwater Blind Faith Ramp-Up Delayed
Chevron Corp.’s Blind Faith project in the deepwater Gulf of Mexico (GOM) has been delayed until the last half of the year because of a problem with the mooring lines. The project, which is expected to have production capacity of 45,000 MMcf/d of natural gas and 45,000 b/d of crude oil, had been scheduled to ramp up by the end of June.
Industry Brief
A subsidiary of Houston-based Helix Energy Solutions agreed to sell a 30% working interest in its Gulf of Mexico Danny Noonan discoveries on Garden Banks blocks 463, 506 and 507, as well as other Outer Continental Shelf assets on East Cameron blocks 371 and 381, to a private independent in two separate transactions for a total of $165 million. Additional cash payments of up to $20 million may be paid to Energy Resource Technology GOM Inc. based upon certain field production milestones, Helix said. The new partner also will pay a 30% share of all future capital expenditures related to the exploration and development of these fields. Most of the transaction already has been funded, and the parties expect to complete the sale by the end of April. “As we have stated, our intention during 2008 is to unlock a portion of the value in our oil and gas portfolio through the monetization of certain reserves,” said Helix CEO Owen Kratz. “These sales are the first of such efforts that we believe will allow us to demonstrate the value created through our unique two-stranded approach to oil and gas exploration and production and will allow us to recover previously invested capital, reduce future capital expenditure requirements related to these developments and reduce the profit deferral in our services division associated with the development work.”
Industry Briefs
El Paso Corp. has completed the sale of some Gulf of Mexico (GOM), onshore and Texas Gulf Coast properties as a part of its portfolio high-grading efforts (see Daily GPI, Jan. 17). In total, El Paso contracted for the sale of an estimated 309 Bcfe of proved reserves for $752 million in four transactions, each with an effective date of Nov. 1, 2007. The GOM transaction also included the assumption by the purchaser of future plugging and abandonment liabilities associated with those properties, which were reflected on El Paso’s balance sheet as asset retirement obligations of $93 million at year-end 2007. After closing adjustments, final cash proceeds are expected to be $650 million. The proceeds will be used to reduce debt incurred for the acquisition of Peoples Energy Production Co. (see Daily GPI, Oct. 1, 2007). “The sale of these properties, together with the Peoples acquisition, reduces our per-unit lease operating costs, increases our future production growth rate, and increases the onshore U.S. weighting of our inventory of future capital projects,” said Brent Smolik, president of El Paso Exploration & Production Co. “We will continue to look for opportunities to enhance our efficiency, improve the quality of our inventory, and further high-grade our portfolio.” Jefferies Randall & Dewey acted as financial adviser.
‘Anomalies’ in Neptune Deepwater Hull Delay Start-Up
Australian producer BHP Billiton has begun assessing how to repair its Neptune tension leg platform (TLP) in the deepwater Gulf of Mexico (GOM) after discovering “structural anomalies” last week.
StatoilHydro Builds Lower Tertiary, Brazil Stakes in $1.8B Deal
Just a day after StatoilHydro ASA announced a deal to expand its presence in U.S. natural gas markets, the Norwegian producer moved to build its presence in the deepwater Gulf of Mexico (GOM) and in Brazil in a $1.8 billion agreement with Anadarko Petroleum Corp.