Phillips

A new company has leased about 1,500 acres in the Kanawha Valley of West Virginia and hopes to find investors to raise $2 billion to develop an ethane cracker and other downstream facilities.

Rex Energy Corp. said results from its first test well into the Upper Devonian/Burkett Shale just north of Pittsburgh are encouraging enough to justify additional wells into the formation directly above the Marcellus Shale in the coming year.

Westlake Chemical Corp. said Tuesday it would grow its ethane-based ethylene capacity by expanding a plant in Louisiana and possibly converting a second plant in Kentucky to ethane feedstock, part of the company’s plans to capitalize on new sources of cheap ethane and other light feedstocks.

El Paso postponed Line 3051 maintenance between Monument Plant and Phillips Lee Plant, previously scheduled to begin Tuesday. The line is now set to be shut in April 29-May 3, during which there will be no flow to or from the IPHLEE and ICABHOBS points. El Paso also said replacement of the Bondad Station’s B turbine will continue through Thursday, keeping station capacity limited to 630 MMcf/d; it will increase to 725 MMcf/d on Friday.

Apache Corp., headquartered in Houston, said Friday it hascompleted its acquisition of Phillips Petroleum Corp.’s Canadianassets for nearly US$490 million. The properties, which areapproximately 59% natural gas, have proved reserves ofapproximately 71.6 MMboe and are located in the Zama area ofNorthwest Alberta. The assets include producing and undevelopedacreage, extensive infrastructure and 3-D and 2-D seismic data.There are approximately 212,000 net developed acres and 275,000 netundeveloped acres, and current production is about 70 MMcf and6,000 bbl of liquid hydrocarbons a day. Average working interest inthe properties is 88%, and Apache will operate 90% of theproduction. It also expects the acquisition to immediately add toearnings per share and cash flow per share. Apache also hascontracted to sell slightly more than half of the Zama properties’gas production, about 60.6 MMcf/d to protect from downside risk andpreserve the upside potential. The price will be set at theCanadian Gas Price Reporter monthly spot index price within acollar with a weighted average floor price of US$4.60/Mcf, and aweighted ceiling of US$6.60 Mcf during 2001 at current exchangerates.

BP, Phillips Alaska and ExxonMobil announced yesterday they haveagreed to a “joint work program” to study the feasibility ofbuilding a pipeline to deliver Alaska North Slope gas to markets inthe Lower 48 states and Canada. But they’re the first to cautionthat their action is no guarantee that the on-again, off-againAlaska pipeline project will move forward this time.

Phillips subsidiary GPM Gas Corp. and a number of other NorthernNatural shippers are befuddled by a complex negotiated ratetransaction between Northern Natural and its affiliate Enron NorthAmerica Corp. that covers 295,000 MMBtu/d of firm transportationspace, or about one-third of Northern’s pipeline capacity. Thecontract was filed at FERC on Oct. 29 (Docket No. RP96-272).

Phillips subsidiary GPM Gas Corp. and a number of other NorthernNatural shippers are befuddled by a complex negotiated ratetransaction between Northern Natural and its affiliate Enron NorthAmerica Corp. that covers 295,000 MMBtu/d of firm transportationspace, or about one-third of Northern’s pipeline capacity. Thecontract was filed at FERC on Oct. 29 (Docket No. RP96-272). GPMhas filed a protest and request for technical conference with FERCon the matter, saying the transaction is large, complex and maydiscriminate against other shippers.

BT Alex. Brown analyst Adam Sieminski said he expects U.S. gasprices to average $2.10/MMBtu this year, which is up 15 cents fromhis previous forecast of $1.95/MMBtu, because of rising demand,declining wellhead deliverability and the falling storage surpluscompared to last year. Sieminski said the tightness in marketfundamentals will peak this winter and carry strong prices throughnext year. He raised his forecast for prices in 2000 to $2.40 froma previous estimate of $2.20.