Precedent

Kinder Morgan Energy Partners LP’s Tennessee Gas Pipeline Co. LLC (TGP) has signed a binding, 20-year firm transportation precedent agreement with Mitsubishi Corp. of Japan to ship 600,000 Dth/d of natural gas earmarked for the proposed Cameron LNG liquefaction facility in Hackberry, LA, which is slated to begin liquefied natural gas (LNG) exports in the second half of 2017. Mitsubishi will serve as the foundation shipper for TGP’s Southwest Louisiana Supply Project, which is designed to provide transportation from various supply basins in Ohio, Pennsylvania, Texas and Louisiana to Cameron Interstate Pipeline, which connects directly to the Cameron LNG Terminal. Kinder Morgan does not own Cameron Interstate Pipeline or the Cameron LNG facility. Sempra Energy, Mitsubishi and Mitsui & Co. Ltd. recently signed 20-year tolling capacity and joint venture agreements for the terminal (see Daily GPI, May 17).

For California and other states that want to emulate its precedent-setting low-carbon fuel standards (LCFS), some industry leaders are warning that there may be unintended environmental and economic consequences waiting around the bend.

For California and other states that want to emulate its precedent-setting low-carbon fuel standards (LCFS), some industry leaders are warning there may be some unintended environmental and economic consequences waiting around the bend.

Constitution Pipeline Co. LLC, a development launched in February by frequent partners Williams Partners LP and Cabot Oil & Gas Corp., on Tuesday executed precedent agreements for the proposed 121-mile natural gas pipeline, designed to connect Marcellus Shale production in northeastern Pennsylvania to Northeast markets by spring 2015.

Cardinal Gas Storage Partners LLC unit Cadeville Gas Storage LLC has executed a 10-year precedent agreement with Shell Energy North America (US) LP to construct a depleted reservoir gas storage facility in Ouachita Parish, LA, near the Perryville/Delhi Hub in northeast Louisiana. “…[A]bundant supply has triggered renewed interest in natural gas from a variety of industries, including power generation, commercial and manufacturing sectors,” said Shell Energy North America President Frans Everts. “Cadeville’s strategic location will enhance Shell Energy’s ability to provide attractive supply options to customers located east of the Rockies.” The facility is expected to be in service in 2013 and designed to have 17 Bcf of working gas capacity.

California’s air regulators earlier in October set the final rules for a precedent-setting cap-and-trade program called for in the state’s 2006 climate change law (AB 32). The rules hold major long-term implications for energy operators, particularly natural gas-fired electric generation plants.

California’s air regulators last Thursday set the final rules for a precedent-setting cap-and-trade program called for in the state’s 2006 climate change law (AB 32). The rules hold major long-term implications for energy operators, particularly natural gas-fired electric generation plants.

Calpine Corp. and General Electric Corp.’s GE Energy Financial Services unit have obtained an $844.5 million credit facility to finance construction of the precedent-setting natural gas-fired 619 MW Russell City Energy Center in the East San Francisco Bay Area town of Hayward, CA. The joint venture power plant, now under construction, was the nation’s first to receive a federal air permit that includes a voluntary limit on greenhouse gas (GHG) emissions. GE and Calpine said the financial facility includes a construction loan that converts to a 10-year term loan when Russell City begins commercial operations in mid-2013. Approved for construction almost a decade ago, the Russell City project struggled with changes and a lack of a long-term sales contract for its output. With GE as a partner, Calpine obtained state approval for a long-term power sales contract with Pacific Gas and Electric Co. in 2009, and obtained a key GHG emission permit from the Bay Area Air Quality Management District last year.

A centerpiece of California’s precedent-setting climate change law (AB 32) was dealt a blow by a San Francisco Superior Court March 17 ruling that could require a full-blown environmental impact report (EIR) before the proposed cap-and-trade program for greenhouse gas (GHG) emissions can be implemented. It was set to be effective next year.