Processing

PG&E Corp. is exploring the possibility of selling itsTexas-based natural gas pipeline, processing and liquids assets,according to an 8-K form filed at the Securities and ExchangeCommission yesterday.

Mid Louisiana Gas Transmission Co. (MLGT), a wholly ownedsubsidiary of Midcoast Energy Resources Inc., made a gas processingagreement with Exxon Company USA and plans to construct a newpipeline to supply up to 80 MMcf/d of gas to the Exxon Baton RougeGas Plant. MLGT will construct an eight-mile 14-inch pipeline forabout $3.5 million. The pipeline will connect the inlet of theBaton Rouge plant with the Florida Gas Transmission Co. Chacahoulalateral. Exxon has agreed to make available 80 MMcf/d of gas plantcapacity to process gas supplied by MLGT and Exxon through MLGT’snew pipeline. The new system will also interconnect with anexisting MLGT pipeline at the outlet of the plant. MLGT plans tobegin initial deliveries before year-end.

A subsidiary of Coastal Field Services has purchased the GilmoreNo. 3 gas processing plant, near Edina, TX, in Hidalgo County fromPG&E Gas Transmission-Texas (PG&E-GTT). The plant wasconstructed in 1997 and has a capacity to extract 6,000 b/d of gasliquids from inlet volumes of up to 125 MMcf/d of gas. Theagreement, signed Nov. 1, also provides for Coastal to controlcapacity both upstream of the plant and exiting the plant.PG&E-GTT will continue to own and operate the Gilmore No. 1 andNo. 2 plants, which have capacity to extract 6,800 barrels per dayof gas liquids from combined inlet volumes of up to 140 MMcf/d.PG&E-GTT also will continue as operator for the Gilmore No. 3plant. “This acquisition reflects Coastal’s strategy of integratingnatural gas infrastructure in areas where Coastal has significantexploration and production interests,” said Coastal CEO David A.Arledge. “Due to ongoing drilling successes and recentacquisitions, South Texas is one of Coastal’s fastest-growingnatural gas production areas.”

Calpine Corp., Texas’ largest independent power producer,announced plans last week to build, own and operate an 800 MWnatural gas-fired cogeneration power plant at Bayer Corp.’schemical facility in Baytown, TX. Permitting for the $335 millionfacility is under way, the company said. The plant is expected tobegin commercial operation in late 2001.

Destin Pipeline reported experiencing problems at both the MainPass 260 platform and the BP Amoco Pascagoula Processing Plant with”some objectionable substance” flowing into the system. It cut theVKGS Main Pass 260 point to 50% of scheduled volumes Monday. Thepoint was shut in Tuesday and no nominations are being acceptedthere until further notice, Destin said.

The Amoco processing plant serving Destin Pipeline is havingproblems with its liquids handling facility, reducing the handlingcapacity by 50% as of Monday, according to the Destin bulletinboard. Amoco estimates the reduction will last about a month. Thereis enough remaining capacity to process current daily liquidsvolumes, according to Destin, but if those volumes increase beyondAmoco’s capabilities the pipeline “could be forced to take furtheraction should the quality of the gas not meet market requirements.”

Texaco, operator of Sea Robin Processing Plant, has notified SeaRobin Pipeline that the plant will be out of service formaintenance for about six weeks starting April 1. The pipeline willnot generate LTA nominations during that period.

Constraints will be minor today at the Opal (WY) processingplant as Williams Field Services begins testing and maintenance.But at least half of the plant’s current 540 MMcf/d activity willbe off the market Tuesday as the plant is shut down for 12 hours.Reductions June 17-24 will be about 75 MMcf/d.

Nautilus Pipeline said it is on track to begin receiving gasagain at Ship Shoal 207 at the start of the May 1 gas day.Processing of a large condensate slug at Exxon’s Garden City Plantonshore Louisiana (see Daily GPI, April 17) is expected to becompleted by Thursday.