natural gas prices

Chevron Corp. has agreed to settle a wrongful death lawsuit filed last year by the family of a subcontractor killed in an explosion and fire at a three-well pad in southwest Pennsylvania, according to documents filed in the Allegheny County Court of Common Pleas. Under the settlement, which was approved by a judge, Chevron would pay $5 million, most of which would go toward a trust for the worker’s son. In February 2014, a natural gas leak at a Chevron site in Greene County caused an explosion and fire that raged for days (see Shale Daily,Feb. 11, 2014). The blast killed Ian McKee, 27, of Morgantown, WV, who was working on site for Cameron International. An investigation later revealed that human error likely caused the leak after it was discovered that a gland nut and lock screw assembly were ejected from the wellhead. The leaking gas caught fire when it reached hot equipment on the pad (see Shale Daily,Aug. 7, 2014).

The Department of Interior’s Bureau of Land Management (BLM) is extending until June 19 the public comment period on its advance notice of proposed rulemaking (ANPR) for potential updates to rules governing oil and natural gas royalty rates, rental payments, lease sale minimum bids, civil penalty caps and financial assurances. A comment period was launched in April to consider allowing BLM to adjust royalty rates for drilling on public lands (see Daily GPI,April 17). Notice of the two-week extension is scheduled to be published Wednesday (June 3) in the Federal Register. Potential changes to BLM’s regulations would respond to concerns expressed by the Government Accountability Office, Interior’s Office of Inspector General and others that the existing rules lack flexibility and could be causing the United States to forgo significant revenue to the detriment of taxpayers. The ANPR also addresses the value of oil and gas resources by inviting comment on how the BLM might update its rules regarding the minimum acceptable bid that must be paid for leases in auctions and and the annual rental payments that are due after a lease is obtained.

Pacific Gas and Electric Co.(PG&E) PresidentChristopher Johns, 54, said he plans to retire at the end of this year, and PG&E CEOTony Earleysaid the company’s board is expected to approve Johns’ replacement before the retirement is effective. Johns joined PG&E in 1996 as vice president and controller, following a career as a certified public accountant atKPMG Peat Marwick LLPwhere he was a partner. He was named PG&E CFO in 2005 and became the utility president in 2009.

Sempra LNG, a unit ofSempra Energy, andWoodside Petroleum Ltd.have a nonbinding agreement to explore developing Sempra LNG’s proposed liquefied natural gas (LNG) project in Port Arthur, TX. The project would be at a site previously permitted for an LNG regasification terminal and designed to include two liquefaction trains with a total export capability of about 10 million tonnes per annum, or 1.4 Bcf/d, as well as LNG storage tanks and marine facilities for ship berthing and loading. In March Sempra LNG affiliate Port Arthur LNG LLC began theFederal Energy Regulatory Commissionpre-filing review for the facility and filed its permit application with theU.S. Department of Energyfor authorization to export LNG to all current and future free trade agreement countries (seeDaily GPI,March 23).

Thanks to a strong El Nino event that is expected to sweep the United States this summer and ward off significant heat waves in key population centers, the demand for air conditioning is expected to be on the low side, which in turn will keep pressure off of natural gas supplies, according to Weather Services International (WSI) and ESAI Power LLC.

Tall Oak Midstream LLC is constructing a crude oil gathering, storage and transportation system to serve producers in Oklahoma’s STACK play. Tall Oak is currently gathering and processing natural gas on its STACK System for multiple customers. Anchored by a long-term agreement with Felix Energy LLC, the crude oil system will connect to multiple downstream pipelines that provide access to the market center at Cushing, OK. Tall Oak said it expects to bring the system into service by the fourth quarter. “This expansion provides one-stop shopping and marketing flexibility to Felix Energy and many other customers we are working with in the STACK play,” said Tall Oak CEO Ryan Lewellyn. Tall Oak’s initial crude oil system will consist of a storage and truck unloading facility east of Okarche, OK, in the center of the STACK play, and a 20-mile pipeline that will provide connection to multiple downstream markets. Ultimately, Tall Oak expects to construct a 210-mile gathering system that will provide wellhead service. To serve customers while the gathering system is under construction, Tall Oak has contracted for a fleet of dedicated trucks that will deliver crude oil from the wellhead to the terminal. The terminal will have an unloading capacity of 16,000 b/d and storage capacity of 20,000 bbl with plans to expand to 70,000 bbl. The STACK play sits northwest of Oklahoma City and targets the Woodford and Mississippian-age shales.

The Railroad Commission of Texas will host the Oil and Gas Regulatory Conference and Technical Workshop July 14-15 in Austin at the AT&T Executive Education and Conference Center. The conference will educate and train oil and gas industry representatives on the laws, agency rules and procedures for hydrocarbon production in Texas. This year’s general sessions feature presentations by Chairman Christi Craddick and Commissioner Ryan Sitton. In addition, Commissioner David Porter will host the Texas Natural Gas Panel. The conference and technical workshop also offers 48 breakout sessions covering a variety of topics including new online filing of Form GW-1, “Groundwater Protection Determination Request Form;” processing the Form T-4, “Application for Permit to Operate a Pipeline in Texas and mapping requirements; new online filing of Statewide Rule 13 Surface Casing Exceptions; and Legal Enforcement Hearings. The fee for the conference is $400 per person if registered by June 12 and $475 per person if registered by July 1, which is when registration closes. Registration is limited to 500 participants. For information, visit the commissionwebsite.

Kinder Morgan Inc. has requested FERC approval to switch the natural gas price indexes it uses to calculate various charges, such as cashouts on Natural Gas Pipeline Company of America (NGPL) (RP15-997) mainly to the indexes published by Natural Gas Intelligence (NGI).

The Obama administration unveiled its long-awaited finalized Clean Water Rule (CWR) on Wednesday, extending regulatory protection to smaller upstream rivers and creeks, but doing so against the wishes of the oil and gas industry, manufacturers and their Republican allies in Congress.