Processing

Fully contracted but still not processing liquefied natural gas (LNG) shipments on a commercial basis, San Diego-based Sempra Energy’s Costa Azul LNG receiving terminal along the Pacific Coast of North Baja California, Mexico, was dedicated by Mexico’s President Felipe Calderon Thursday in ceremonies at the site hosted by Sempra CEO Donald Felsinger.

Tennessee said it was allowing all production behind the Grand Chenier and Sabine processing plants that had been ordered to shut in Monday due to Tropical Storm Edouard to resume flows Wednesday.

ExxonMobil Corp. has been ordered to curb the carbon dioxide (CO2) emissions from its Shute Creek natural gas processing facility near LaBarge, WY, and redirect the emissions into pipelines for enhanced oil recovery under a resolution passed by the Wyoming Oil and Gas Conservation Commission. The commission wants the oil major to submit progress reports detailing progress in marketing the CO2 vented from the facility, which is produced in association with sour gas production. ExxonMobil sold an average of 207 MMcf/d of CO2 last year for enhanced oil recovery, but it vented another 181 MMcf/d of CO2, according to the commission. Under the order, ExxonMobil may be forced to secure interruptible customer contracts for CO2 delivery. “They recognize what we have no argument with: That is, there are hedging opportunities in the CO2 market,” ExxonMobil spokeswoman Sara K. Tays told the Casper Star-Tribune in Wyoming. “The goal is to safely market everything you can.” With oil and gas prices soaring, Wyoming officials said they want to help producers secure flows of CO2, which may be injected into maturing fields to extract volumes that were unrecoverable through conventional production methods.

The Hess Corp.-operated Sea Robin Gas Processing Plant was shut in late Tuesday morning, according to a notice by Sea Robin Pipeline. The pipeline reduced Plant Volume Reduction nominations by two-thirds for Wednesday’s gas day and said they would be cut to zero Thursday for the duration of the plant outage, during which gas will continue to be dehydrated. Shippers were encouraged to call downstream delivery point operators to see if they will be accepting gas from Sea Robin Pipeline during this outage.

ConocoPhillips expects its 1Q2008 production to be “slightly below” 1.8 million boe/d following an unplanned shutdown at a nonoperated gas processing plant in the San Juan Basin, which was complicated by cold weather. Output in the final quarter of 2007 was 1.84 million boe/d. The Houston-based major issued an interim update ahead of the April 24 scheduled release of quarterly results. The producer noted that in the first three months of this year, the average price of natural gas climbed 19% from the same period a year ago while crude oil prices surged 69%. Henry Hub first-of-month prices in 1Q2008 averaged $8.03/Mcf, compared with $6.77 in 1Q2007. Gas prices in 4Q2007 averaged $6.97/Mcf. Realized domestic refining and marketing margins for 1Q2008 are expected to be “significantly lower” than margins in 4Q2007 because of the absence of a quarterly inventory benefit, higher crude costs relative to benchmarks and lower margins. Conoco said the prices for its “secondary products,” such as fuel oil, natural gas liquids and petroleum coke “did not increase in proportion to the cost of the feedstocks to produce them.” Debt balance for the major was estimated to be about $21.5 billion at the end of March. Stock repurchases in the first three months of this year were estimated at $2.5 billion.

ConocoPhillips expects its 1Q2008 production to be “slightly below” 1.8 million boe/d following an unplanned shutdown at a nonoperated gas processing plant in the San Juan Basin, which was complicated by cold weather. Output in the final quarter of 2007 was 1.84 million boe/d.

Sea Robin Pipeline announced that the Hess Corp.-operated Sea Robin Gas Processing Plant had returned to service Tuesday afternoon and that the pipeline was again accepting Plant Thermal Reduction nominations. Columbia Gulf said it would resume accepting up to 612,281 Dth/d in receipt nominations Thursday from Sea Robin-Erath; it had reduced the volume to 100,000 Dth/d Tuesday after the plant was shut in Sunday.

Houston-based Spectra Energy expects to bring into service approximately $1.5 billion in new pipeline, gas processing, storage and distribution projects this year, the company said last week.

Houston-based Spectra Energy expects to bring into service approximately $1.5 billion in new pipeline, gas processing, storage and distribution projects this year, the company said Thursday.