NuStar Energy LP and Valero Energy Corp. have struck an agreement for NuStar to modify existing sections of its South Texas pipeline system and build new sections to transport Eagle Ford and other crude oils. NuStar will reverse an eight-inch diameter refined products pipeline that currently runs from Corpus Christi to Three Rivers and will convert it to crude service. The pipeline will provide capacity to transport Eagle Ford crude and condensate to Valero’s Corpus Christi refinery; the line is expected to be in full service by the end of September. NuStar will also construct 55 miles of new 12-inch diameter pipeline that will connect to existing pipeline segments to move crude from Corpus Christi to Valero’s Three Rivers refinery. This system is expected to be in service by the second quarter of 2012. “With the growing production from the Eagle Ford region, NuStar is in the unique position to provide Valero and our other customers with quick transportation solutions given the fact that we have hundreds of miles of existing pipeline running from that region into Corpus Christi, where it can be refined or transported to other locations,” said NuStar CEO Curt Anastasio.
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Industry Brief
NextEra Energy Resources LLC (NER), a subsidiary of NextEra Energy Inc., said one of its subsidiaries has agreed to sell its interest in four natural gas power plants to an LS Power affiliate for $1.05 billion. The facilities are the 507 MW Blythe Energy Center in Blythe, CA; the 668 MW Calhoun Energy Center in Eastaboga, AL; the 98 MW Cherokee Energy Center in Gaffney, SC; and the 879 MW Doswell Energy Center in Ashland, VA. An NER affiliate will initially continue to operate the facilities through service contracts. Closing is expected during 4Q2011, pending approval from regulators and third parties.
Industry Briefs
Swift Energy Co. agreed to sell its interests in six fields in South Louisiana, two in Texas and one in Alabama to an undisclosed private oil and gas company for $53.5 million. Swift said it would use the proceeds to fund a portion its 2011 capital expenditures. Production attributable to the fields being sold averaged 10.6 MMcfe/d during 1Q2011 with aggregate proved reserves of 92.2 Bcfe (19% proved developed producing and 65% natural gas) at year-end 2010. The sale is expected to close within the next two months.
Industry Briefs
Xcel Energy said its Colorado utility will complete in October the upgrade of a six-inch diameter natural gas transmission pipeline to a 16-inch diameter line running in the west-central part of the state. The upgrade aims to address growing population and facilitate switching an existing coal-fired power plant to gas in another area of the Xcel utility system. The utility added a third construction crew to overcome delays and keep the project on schedule.
Offshore Costs Send McMoRan into the Red
McMoRan Exploration Co., which has made its name through discoveries of big, gassy fields in the shallow waters of the Gulf of Mexico (GOM), said Tuesday soaring costs from an unproductive well and impairment expenses ate into its revenues in the second quarter, sending the company to a loss for the sixth straight quarter.
Industry Brief
Crosstex Energy LP and Apache Corp. said they will invest $85 million in a newbuild natural gas processing facility in the Permian Basin in West Texas. The initial phase of the project will provide interim and long-term processing solutions, compression and residue gas takeaway for Apache’s Deadwood development in Glasscock County. Crosstex and Apache will fund the project equally and each hold a 50% working interest. Separately, Crosstex will buy and upgrade a nearby rail terminal to provide transportation of natural gas liquids to its Eunice fractionation facility in southern Louisiana.
Industry Brief
Houston-based National Oilwell Varco Inc. and Pasadena, CA-based Ameron International Corp. said National Oilwell will acquire Ameron for $772 million cash. Ameron’s shareholders will receive $85/share. The deal is expected to close in the fourth quarter. Ameron is a producer of fiberglass-composite pipe used to transport oil, chemicals and corrosive fluids. National Oilwell designs and manufactures oil/gas drilling and production equipment. It was not disclosed what is planned for Ameron’s California headquarters or its 2,900 employees worldwide.
Pennsylvania DEP Investigating Methane in Water Wells
The Pennsylvania Department of Environmental Protection (DEP) is investigating the source of methane found in some water wells and a nearby stream in Lycoming County, DEP said Friday.
ALJ Designated for Expedited Tuscarora Complaint Hearing
FERC Administrative Law Judge (ALJ) Michael J. Cianci Jr. has been tapped to hear the Section 5 complaint case in which Tuscarora Gas Transmission is accused of significantly overrecovering its cost of service, thus making its current transportation rates “unjust and unreasonable.”
People
Thomas S. Liberatore has joined Eclipse Resources as a partner, executive vice president and COO, the State College, PA-based oil and gas company said. Liberatore, who resigned as vice president of Cabot Oil & Gas Corp.’s East region following a restructuring there two years ago (see Daily GPI, June 1, 2009), is a member of the American Association of Petroleum Geologists and the Appalachian Geological Society, has served on the board of directors of the West Virginia Oil and Natural Gas Association and is a past president of the Independent Oil & Gas Association of West Virginia. Additionally, Brian Panetta, who was previously a geologist with Waco Oil & Gas and a senior geologist for Chesapeake Energy Corp., has joined Eclipse as vice president of geology. Eclipse focuses on the acquisition, exploration and development of unconventional oil and natural gas properties in the Appalachian Basin, including the Marcellus Shale, Utica Shale and Upper Devonian shales.
