Upstream

FERC last Thursday issued two orders that will allow Questar Pipeline Co. and Chipeta Processing LLC to modify their facilities to provide producers in the Uinta Basin with greater transportation and cryogenic processing capability for liquids-rich natural gas.

McMoRan Exploration Co., whose upstream spending has been eaten up by exploration activity in the shallow waters of the Gulf of Mexico (GOM), expects commercial production from the highly touted Davy Jones natural gas prospect to be in motion later this month.

McMoRan Exploration Co., whose upstream spending has been eaten up by exploration activity in the shallow waters of the Gulf of Mexico (GOM), now expects commercial production from the highly touted Davy Jones natural gas prospect to be in motion late this month.

With the Gulf of Mexico (GOM) giving it a lift, Chevron Corp.’s U.S. estimated upstream production climbed 14,000 boe in the second quarter over the first three months of this year, the oil major reported late Wednesday.

The upstream industry could see its drilling inventory grow if horizontal drilling opportunities being explored by several companies pan out, according to analysts at Raymond James & Associates Inc.

Saying it had limited operational flexibility to manage imbalances in upstream Zones 0, L, 1, 2, 3 and 4 over the long holiday weekend, Tennessee issued an Imbalance Warning for shippers in those zones effective Friday until further notice. Affected delivery point operators are required to keep actual daily takes out of the system equal to or greater than scheduled quantities regardless of their cumulative imbalance position. Receipt point operators must keep actual daily receipts into the system equal to or less than scheduled quantities regardless of their cumulative imbalance position.

Natural gas produced from Marcellus Shale wells owned by Shell Upstream America and Ultra Petroleum Corp. has begun flowing through a UGI Central Penn Gas Inc. supply pipeline that feeds some 15,000 customers in Tioga, Bradford and Potter counties in Pennsylvania, according to the UGI Utilities Inc. subsidiary.

Tennessee lifted Wednesday a longstanding Imbalance Warning in upstream Zones 0-4 but said it continues to request that all parties match physical flow with scheduled quantities.

Southwest Gas issued a Hold Burn to Scheduled Quantities notice, effective Monday, due to a low-linepack Alert Day that was declared by upstream pipeline Transwestern that afternoon (see Daily GPI, Dec. 6a). Southwest said it did not plan on flowing any gas from Transwestern for Monday’s gas day and therefore did not declare an OFO, but would issue an OFO “should this situation change.”