HOUSTON - Kinder Morgan Energy Partners, L.P. (NYSE: KMP) and Copano Energy, L.L.C. (Nasdaq: CPNO) on May 14 announced that they have entered into formal agreements for Eagle Ford Gathering LLC, a 50/50 joint venture to provide gathering, transportation and processing services to natural gas producers in the Eagle Ford Shale resource play in South Texas. The companies previously announced a letter of intent for the joint venture on Nov. 13, 2009.
"This project builds on the long-standing partnership between Copano and Kinder Morgan to capitalize on the strong and growing demand in South Texas," said Bruce Northcutt, Copano Energy's president and chief executive officer. "This new joint venture will provide producers in the western Eagle Ford Shale a new, fully integrated midstream alternative for their gathering, transportation, processing and fractionation needs, including access to multiple residue gas markets."
"Kinder Morgan is happy to be expanding its commercial alliance with Copano and looks forward to providing producers a timely solution for their growing Eagle Ford gas volumes through the new joint venture," said Duane Kokinda, president of Kinder Morgan's Texas Intrastate Gas Pipelines.
Due to the high level of interest expressed by producers, Kinder Morgan and Copano have each increased their committed capacity from 150,000 to 375,000 MMBtu per day to Eagle Ford Gathering for transportation on Kinder Morgan's Laredo-to-Katy pipeline and processing at Copano's Houston Central processing plant. Additionally, the joint venture expects the first phase of construction to significantly extend beyond the original 22 miles previously announced.
In connection with the execution of the joint venture agreements, Copano and Kinder Morgan also amended and extended their existing straddle processing agreement and transportation agreement through the end of 2024. Representatives of Eagle Ford Gathering have been in negotiations with multiple producers regarding potential contracts for gathering, transportation and processing services. Copano will serve as operator and managing member of Eagle Ford Gathering.
Wednesday, May 19, 2010
Tuesday, May 18, 2010
Legal experts say criminal charges likely in Gulf oil spill
WASHINGTON - Federal investigators are likely to file criminal charges against at least one of the companies involved in the Gulf of Mexico spill, raising the prospects of significantly higher penalties than a current $75 million cap on civil liability, legal experts say.
An inquiry by the Homeland Security and Interior Departments into how the spill occurred is still in its early stages and authorities have not confirmed whether a criminal investigation has been launched.
But environmental law experts say it's just a matter of time until the Justice Department steps in - if it hasn't already - to initiate a criminal inquiry and take punitive action.
"There is no question there'll be an enforcement action," said David M. Uhlmann, who headed the Justice Department's environmental crimes section for seven years during the Clinton and Bush administrations. "And, it's very likely that there will be at least some criminal charges brought."
While Sen. Lisa Murkowski (R-Alaska) successfully led the opposition from oil producing states, at least for now blocking an administration-backed proposal to lift the current $75 million cap on liability under the Oil Pollution Act of 1990 to $10 billion, there's no cap on criminal penalties. In fact, prosecutors in such cases can seek twice the cost of environmental and economic damages resulting from the spill.
An inquiry by the Homeland Security and Interior Departments into how the spill occurred is still in its early stages and authorities have not confirmed whether a criminal investigation has been launched.
But environmental law experts say it's just a matter of time until the Justice Department steps in - if it hasn't already - to initiate a criminal inquiry and take punitive action.
"There is no question there'll be an enforcement action," said David M. Uhlmann, who headed the Justice Department's environmental crimes section for seven years during the Clinton and Bush administrations. "And, it's very likely that there will be at least some criminal charges brought."
While Sen. Lisa Murkowski (R-Alaska) successfully led the opposition from oil producing states, at least for now blocking an administration-backed proposal to lift the current $75 million cap on liability under the Oil Pollution Act of 1990 to $10 billion, there's no cap on criminal penalties. In fact, prosecutors in such cases can seek twice the cost of environmental and economic damages resulting from the spill.
Monday, May 17, 2010
Enterprise, Duncan Energy expanding Eagle Ford facilities
HOUSTON - Enterprise Products Partners L.P. (NYSE: EPD) and Duncan Energy Partners L.P. (NYSE: DEP) on May 12 announced an expansion initiative at their jointly-owned Shoup and Armstrong facilities in South Texas, which provide natural gas processing and natural gas liquids (NGLs) fractionation services.
The upgrades are part of a comprehensive plan to expand the partnerships' midstream infrastructure in South Texas to handle increasing natural gas production from the growing Eagle Ford Shale play.
"This project further demonstrates the value of our existing assets in South Texas, which serve as the foundation for our strategy of focusing on the efficient and creative use of capital to generate attractive returns from increasing activity and higher demand for midstream services in the Eagle Ford Shale," said Michael A. Creel, Enterprise president and chief executive officer. "These expansions will not only give us the flexibility to accommodate more volumes, but should also position us to capture additional value from the various physical qualities of the natural gas, particularly the high NGL content, that are characteristic of Eagle Ford Shale production."
At the Shoup facility, located in Nueces County, Texas, the focus is on modifying existing fractionation equipment, which would increase its capacity to 77,000 b/d. The work is expected to be completed in the second quarter of 2010.
Incremental volumes of NGLs to fill the additional capacity are expected to be supplied by six existing Enterprise natural gas plants currently feeding the Shoup facility. Production from these plants is expected to increase significantly over the next six months as the quantity and quality of the gas supplies increase.
The upgrades are part of a comprehensive plan to expand the partnerships' midstream infrastructure in South Texas to handle increasing natural gas production from the growing Eagle Ford Shale play.
"This project further demonstrates the value of our existing assets in South Texas, which serve as the foundation for our strategy of focusing on the efficient and creative use of capital to generate attractive returns from increasing activity and higher demand for midstream services in the Eagle Ford Shale," said Michael A. Creel, Enterprise president and chief executive officer. "These expansions will not only give us the flexibility to accommodate more volumes, but should also position us to capture additional value from the various physical qualities of the natural gas, particularly the high NGL content, that are characteristic of Eagle Ford Shale production."
At the Shoup facility, located in Nueces County, Texas, the focus is on modifying existing fractionation equipment, which would increase its capacity to 77,000 b/d. The work is expected to be completed in the second quarter of 2010.
Incremental volumes of NGLs to fill the additional capacity are expected to be supplied by six existing Enterprise natural gas plants currently feeding the Shoup facility. Production from these plants is expected to increase significantly over the next six months as the quantity and quality of the gas supplies increase.
Friday, May 14, 2010
Interior to split Minerals Management Service into two agencies
WASHINGTON - The U.S. Interior Department announced on May 11 its intent to split the Minerals Management Service into two divisions, one
focusing on gathering royalties from oil and gas companies and another focused on safety inspections.
Interior Secretary Ken Salazar made the announcement at 1 p.m. EDT.
The reorganization comes amid the vast Gulf Coast oil spill that has called into question the efficacy of the government's regulation.
The tiny agency currently plays dual roles, focusing on collecting money as well as on ensuring the safety of oil rigs. Some former employees have
said that amounts to a conflict-of-interest, as employees must focus on keeping oil revenue flowing while also focusing on safety.
A Wall Street Journal examination of the MMS's track record last week found several instances of the agency identifying potential safety problems
and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.
The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other
major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was four times more likely to be killed than a worker in European waters, and 23 percent more likely to sustain an injury, according to International Association of Drilling Contractors data, which
is adjusted for man-hours worked.
The U.K., home to one of the largest offshore-drilling industries in the world, has already adopted a regulatory structure similar to the one that the Obama administration is moving toward. In 1998, after a fire aboard a North Sea platform killed 167 people, the U.K. separated its offshore safety-oversight agency from the revenue-gathering side.
focusing on gathering royalties from oil and gas companies and another focused on safety inspections.
Interior Secretary Ken Salazar made the announcement at 1 p.m. EDT.
The reorganization comes amid the vast Gulf Coast oil spill that has called into question the efficacy of the government's regulation.
The tiny agency currently plays dual roles, focusing on collecting money as well as on ensuring the safety of oil rigs. Some former employees have
said that amounts to a conflict-of-interest, as employees must focus on keeping oil revenue flowing while also focusing on safety.
A Wall Street Journal examination of the MMS's track record last week found several instances of the agency identifying potential safety problems
and then either not requiring follow-up or relying on the industry to craft a solution. In some cases, the industry didn't do its part.
The Journal also found that the safety record of U.S. offshore drilling compares unfavorably, in terms of deaths and serious accidents, to other
major oil-producing countries. Over the past five years, an offshore oil worker in the U.S. was four times more likely to be killed than a worker in European waters, and 23 percent more likely to sustain an injury, according to International Association of Drilling Contractors data, which
is adjusted for man-hours worked.
The U.K., home to one of the largest offshore-drilling industries in the world, has already adopted a regulatory structure similar to the one that the Obama administration is moving toward. In 1998, after a fire aboard a North Sea platform killed 167 people, the U.K. separated its offshore safety-oversight agency from the revenue-gathering side.
Thursday, May 13, 2010
Minnesota stiffens gas pipeline rules following sewer line blast
MINNEAPOLIS, Minn. - State safety officials on May 10 issued new requirements, effective immediately, for documenting the safe installation of gas lines.
The requirements from the Department of Public Safety Office of Pipeline Safety were sent to all 57 gas distribution operators in Minnesota three months after a contractor hit an Xcel Energy pipeline and caused a blast that destroyed a house in St. Paul, Minn.
Pipeline safety director Jerry Rosendahl said on May 10 that Minnesota is the first state to issue such requirements.
Operators who ignore the rules are subject to citations and fines, Rosendahl said.
The requirements are intended to prevent "cross-boring," where underground gas pipelines intersect and puncture privately owned sewer pipes.
On Feb. 1, a roto-rooter contractor punctured a natural gas pipeline that had been inadvertently installed through a sewer service lateral.
The gas escaped into a home and ignited, causing an explosion and fire that destroyed the home.
The requirements from the Department of Public Safety Office of Pipeline Safety were sent to all 57 gas distribution operators in Minnesota three months after a contractor hit an Xcel Energy pipeline and caused a blast that destroyed a house in St. Paul, Minn.
Pipeline safety director Jerry Rosendahl said on May 10 that Minnesota is the first state to issue such requirements.
Operators who ignore the rules are subject to citations and fines, Rosendahl said.
The requirements are intended to prevent "cross-boring," where underground gas pipelines intersect and puncture privately owned sewer pipes.
On Feb. 1, a roto-rooter contractor punctured a natural gas pipeline that had been inadvertently installed through a sewer service lateral.
The gas escaped into a home and ignited, causing an explosion and fire that destroyed the home.
Tuesday, May 11, 2010
Energy Transfer Equity acquiring Regency Energy Partners GP
Regency Energy Partners LP (Nasdaq: RGNC) announced on May 11 that Energy Transfer Equity, L.P. (NYSE: ETE) will acquire the general partner interest in Regency Energy Partners LP from an affiliate of GE Energy Financial Services, a unit of GE. In addition, Regency will acquire a 49.9 percent ownership interest in the Midcontinent Express Pipeline from Energy Transfer Equity, L.P.
ETE will acquire a 100 percent interest in Regency's general partner from an affiliate of GE Energy Financial Services for ETE preferred units with a value of approximately $300 million. Affiliates of GE Energy Financial Services will retain their 24.7 million limited partner units and will be Regency's second largest unitholder, holding 21 percent of Regency's common units after giving effect to the transaction.
In addition, GE Energy Financial Services will have the right to name two board members to the Regency board of directors and one board member to the ETE board of directors.
ETE will own the general partner of both Energy Transfer Partners, L.P. (NYSE: ETP) and Regency. Regency and Energy Transfer Partners (ETP) will operate as separate entities, both with publicly traded limited partner units.
"Energy Transfer Equity is an experienced midstream leader with a strong track record of supporting its limited partnership, assisting ETP in obtaining investment grade status and growing its distributable cash flow," said Byron Kelley, chairman, president and chief executive officer of Regency. "Once the transaction closes, we look forward to calling upon ETE's expertise and extensive knowledge while continuing to focus on implementing the strategic growth objectives we have set for Regency."
Regency also announced on May 11 that it has entered into a definitive agreement to purchase a 49.9 percent interest in the Midcontinent Express Pipeline from ETE. Regency will fund the transaction through the issuance of approximately 26.27 million Regency limited partner units to ETE. ETE will hold 22 percent of Regency's common units after giving effect to the transaction.
ETE will acquire a 100 percent interest in Regency's general partner from an affiliate of GE Energy Financial Services for ETE preferred units with a value of approximately $300 million. Affiliates of GE Energy Financial Services will retain their 24.7 million limited partner units and will be Regency's second largest unitholder, holding 21 percent of Regency's common units after giving effect to the transaction.
In addition, GE Energy Financial Services will have the right to name two board members to the Regency board of directors and one board member to the ETE board of directors.
ETE will own the general partner of both Energy Transfer Partners, L.P. (NYSE: ETP) and Regency. Regency and Energy Transfer Partners (ETP) will operate as separate entities, both with publicly traded limited partner units.
"Energy Transfer Equity is an experienced midstream leader with a strong track record of supporting its limited partnership, assisting ETP in obtaining investment grade status and growing its distributable cash flow," said Byron Kelley, chairman, president and chief executive officer of Regency. "Once the transaction closes, we look forward to calling upon ETE's expertise and extensive knowledge while continuing to focus on implementing the strategic growth objectives we have set for Regency."
Regency also announced on May 11 that it has entered into a definitive agreement to purchase a 49.9 percent interest in the Midcontinent Express Pipeline from ETE. Regency will fund the transaction through the issuance of approximately 26.27 million Regency limited partner units to ETE. ETE will hold 22 percent of Regency's common units after giving effect to the transaction.
Monday, May 10, 2010
NorthernStar suspends Bradwood Landing LNG terminal in Oregon
PORTLAND, Ore. - NorthernStar Natural Gas Inc. said on May 4 that it is suspending efforts to develop a liquefied natural gas import terminal at
Bradwood Landing on the Columbia River, 25 miles east of Astoria.
The announcement ends a six-year effort that consumed as much as $100
million of investors' capital and countless hours of regulatory work while sparking a firestorm of public opposition from property owners and environmentalists.
The Houston-based energy development company sent out a one-page news release on May 4 quoting NorthernStar President Paul Soanes saying extended delays in state and federal permitting and the difficult investment environment "have forced us to suspend development."
The company characterized its move as a "suspension" of the project, not a termination.
Mike Carrier, natural resources policy director for Gov. Ted Kulongoski, said the company told him on May 4 that another developer could conceivably resurrect the project. But Carrier said the company told him its financial backer, a private equity fund that has put $100 million into the company's LNG proposals in Oregon and California, was pulling the plug.
NorthernStar began development work nearly six years ago at an abandoned mill site on the lower Columbia River. At the time, gas prices were high and importing the commodity to the United States from abroad seemed like a lucrative opportunity.
Bradwood's suspension also has implications for a controversial 200-mile pipeline that Northwest Natural Gas Co. and TransCanada Corp. were planning to build to connect the LNG terminal with an interstate pipeline in central Oregon near Maupin.
Bradwood Landing on the Columbia River, 25 miles east of Astoria.
The announcement ends a six-year effort that consumed as much as $100
million of investors' capital and countless hours of regulatory work while sparking a firestorm of public opposition from property owners and environmentalists.
The Houston-based energy development company sent out a one-page news release on May 4 quoting NorthernStar President Paul Soanes saying extended delays in state and federal permitting and the difficult investment environment "have forced us to suspend development."
The company characterized its move as a "suspension" of the project, not a termination.
Mike Carrier, natural resources policy director for Gov. Ted Kulongoski, said the company told him on May 4 that another developer could conceivably resurrect the project. But Carrier said the company told him its financial backer, a private equity fund that has put $100 million into the company's LNG proposals in Oregon and California, was pulling the plug.
NorthernStar began development work nearly six years ago at an abandoned mill site on the lower Columbia River. At the time, gas prices were high and importing the commodity to the United States from abroad seemed like a lucrative opportunity.
Bradwood's suspension also has implications for a controversial 200-mile pipeline that Northwest Natural Gas Co. and TransCanada Corp. were planning to build to connect the LNG terminal with an interstate pipeline in central Oregon near Maupin.
Subscribe to:
Posts (Atom)