Replacement

El Paso said the necessary replacement parts for repairing mechanical damage to Flagstaff (AZ) Station’s Unit #1 (see Daily GPI, April 30) will not be available until mid-June, and thus it declared the outage a force majeure event. The incremental reduction of North Mainline capacity due to the Flagstaff outage is 100 MMcf/d, and other North Mainline maintenance previously scheduled during May is being reassessed in light of the Flagstaff situation. Previously posted capacity reductions will be revised as soon as possible. El Paso also said the Alamo Lake (AZ) Station’s #2 turbine was started Thursday but experienced a mechanical failure and must be disassembled to determine the extent of damage. Capacity of the Havasu Crossover was returned to 570 MMcf/d Friday until further notice.

Flagstaff (AZ) Station’s #1 compressor has suffered mechanical damage, making the station inoperable until further notice because the necessary replacement parts have not been located yet, El Paso said. Reductions of North Mainline capacity due to the Flagstaff outage coupled with other maintenance that is ongoing or planned through May 14 will fluctuate between 125 MMcf/d and 215 MMcf/d. See the bulletin board for details.

The Federal Energy Regulatory Commission has set the Commission staff to report on the viability of replacement price index formulas to be used in a negotiated rate transaction between Natural Gas Pipeline Co. of America (NGPL) and Occidental Energy Marketing (RP99-176-089).

The Federal Energy Regulatory Commission has set the Commission staff to report on the viability of replacement price index formulas to be used in a negotiated rate transaction between Natural Gas Pipeline Co. of America (NGPL) and Occidental Energy Marketing (RP99-176-089).

The management plans proposed by El Paso Corp.’s current directors and the replacement directors chosen by some of the company’s top shareholders are similar in how the company would be run going forward. However, differences abound in how management and directors would be compensated and how businesses and executives would be evaluated going forward.

El Paso’s White Rock Station will be down for controls replacement April 9-27, with the #1 turbine remaining down through April 29. Bondad Station will be down for annual Department of Transportation inspections April 16. The work will cut San Juan Basin capacity by 270 MMcf/d April 9-27 and by 105 MMcf/d April 28-29. Bondad capacity will be reduced by 585 MMcf/d on April 16.

With its acquisitions of Mitchell Energy & Development Corp. and Anderson Exploration on the books last year, Devon Energy Corp. scored record oil and natural gas production and revenues in 2002, and also could boast that it pumped up its oil, gas and natural gas liquids (NGLs) reserve replacements by 278% at a low cost of $7.18/boe. This year, said management, will be no different.

Besides its record oil and natural gas production and revenues in 2002, Devon Energy Corp. also could boast Thursday that it pumped up its oil, gas and natural gas liquids (NGL) reserve replacements last year by 278% at a cost of $7.18/boe.

Producers have stronger bottom lines than other sectors of the oil and gas industry, but high natural gas prices reflect falling U.S. production and the “hard time” exploration and production companies have to replace reserves of comparable or better quality at a competitive cost, said Moody’s Investors Service analysts. Moody’s analysts last week gave a “stable” rating to the entire sector, with the exception of oil refiners and wholesale marketing, which both carry a “negative” outlook.