LNG terminal co-owned by GE begins operating on Gulf Coast

PASCAGOULA, Miss. - GE Energy Financial Services, a unit of GE. On Oct. 27 announced that its co-owned Gulf LNG regasification and liquefied natural gas storage facility on the Gulf of Mexico has successfully begun operations.

GE made the announcement at a ribbon-cutting ceremony at the facility in Pascagoula, Miss., joined by Gov. Haley Barbour and executives of El Paso Corp.

"After three and a half years of construction, this $1.1 billion facility was completed on-time and on-budget and forms an important part of our nation's energy infrastructure," said Dan Castagnola, a managing director of GE Energy Financial Services in Houston.

"Our co-ownership of this facility reflects GE Energy Financial Services' strategy of supporting long-term, critical infrastructure projects that help meet energy demand and draw on GE's strengths and expertise in energy."

The terminal, operated by a subsidiary of El Paso Corp., is located adjacent to the Bayou Casotte Ship Channel in the Port of Pascagoula on the Gulf Coast. It receives, stores and regasifies imported liquefied natural gas (LNG).

The terminal consists of two 160,000 cubic meter storage tanks with a combined capacity of 6.6 billion cubic feet (Bcf); 10 vaporizers, providing a base send-out capacity of 1.3 Bcf/d; and five miles of 36-inch pipeline connecting to downstream pipelines owned by Gulfstream, Destin, Transco, and Florida Gas Transmission. The pipelines provide access to the Pascagoula Gas Processing Plant operated by BP America Production Co.

The Gulf LNG facility is contracted under 20-year firm service agreements for all of its capacity with a group of LNG producers, including several major oil and gas companies, to support the facility and provide a source of LNG.

Tortoise Pipeline & Energy Fund announces $250 million initial public offering

LEAWOOD, Kan. - Tortoise Capital Advisors, LLC on Oct. 27 announced the launch of Tortoise Pipeline & Energy Fund, Inc.

The fund raised $250 million in gross proceeds, and should the underwriters exercise their overallotment option in full, the fund will have raised approximately $285 million. 

The fund's shares began trading on the NYSE on Oct. 27 under the symbol TTP.

The fund intends to focus particularly on North American pipeline companies that transport natural gas, natural gas liquids, crude oil and refined products, and to a lesser extent, on other energy infrastructure companies.

As a flow-through regulated investment company, the fund may purchase securities of traditional pipeline corporations along with master limited partnerships. The fund's investment objective is to provide its stockholders a high level of total return, with an emphasis on current distributions.

Montage Investments and its affiliates played an important role in providing sales and marketing support to Tortoise during the offering.

Williams Partners signs agreements with Hess, Chevron for Gulfstar FPS™

TULSA, Okla. - Williams Partners L.P. (NYSE: WPZ) announced on Oct. 25 that it has signed multiple agreements with Hess Corp. (NYSE: HES) and Chevron (NYSE: CVX) to provide production handling, export pipeline, oil and gas gathering and gas processing services in the Tubular Bells field development located in the eastern deepwater Gulf of Mexico.

Hess and Chevron, owners of the Tubular Bells leases, will utilize Williams Partners' proprietary floating production system, Gulfstar FPS™. Williams Partners expects Gulfstar FPS to be capable of serving as a central host facility for other deepwater prospects in the area.

A Letter of Award for the project was announced in a May 24, 2011, news release.

Williams Partners will design, construct and install its Gulfstar FPS with a capacity of 60,000 barrels of oil per day, up to 200 million cubic feet of natural gas per day (MMcf/d) and the capability to provide seawater injection services. The facility is a spar-based floating production system that utilizes traditional three-level topsides mated to a classic spar hull. This standard design approach will allow customers to reduce their cycle time from discovery to first oil.

From sanctioning the project to completion, Gulfstar FPS is expected to be delivered in 30 months.

"This agreement demonstrates the value that deepwater producers place on reducing cycle time and costs. It also reflects the commercial benefit of our reputation for reliability and our commitment to safety - both in our deployment of innovative solutions and in our operations. We are delivering a solution that has positive, meaningful bottom-line impact for producers," said Rory Miller, president of Williams Partners' midstream business.

This Gulfstar FPS will be the first spar-based floating production system with major components to be built entirely in the U.S. Gulf Coast area.

"This project will create approximately 1,000 U.S. jobs for 30 months," said Miller. "These jobs are spread from coast to coast across more than 20 states."

Cheniere and BG in $8 billion deal to export U.S. LNG

NEW YORK - BG Group will export liquefied natural gas from the United States under a landmark $8 billion deal with Cheniere Energy that will allow domestic producers to ship bountiful shale gas supplies to the world for the first time.

The deal, announced Oct. 26, paves the way for terminal developer Cheniere to secure financing for the its Sabine Pass project in Louisiana which could be the first LNG export plant built in the United States in nearly 50 years as U.S. gas production hits record highs.

"If we start construction by next year then we could be exporting by 2015," Cheniere chief executive Charif Souki told Reuters. "The BG Group contract will help with financing."

The deal is expected to reap $410 million a year, Souki said, a boon for a company which put most of its money into building a huge import terminal at Sabine Pass that has for three years received only sporadic supply.

Record U.S. natural gas production has swamped the market in recent years, leading to a series of rival export proposals all hoping to sell LNG to higher paying markets in Asia and Europe.

Under the deal, which could help reverse the fortunes of the troubled Houston-based company, Cheniere will sell 3.5 million tons per year of liquefied natural gas to BG for 20 years from its proposed export plant in Sabine Pass, La.

Terminal developers like Cheniere are scrambling to turn their idle import facilities into export plants to ship U.S. natural gas abroad after a revolution in shale gas production left the United States with 100 years of supply.

BG Group, one of the world's biggest LNG players, has access to import markets across the globe. Anywhere from Japan to Korea to Chile could soon be importing U.S. gas.

Cheniere will sell the LNG to BG for 115 percent of U.S. benchmark Henry Hub prices, plus a $2.25 premium.

KM-Valero joint venture pipeline headquarters to locate in Covington, La.

Kinder Morgan Energy Partners-Valero pipeline headquarters will be locating in the city of Covington, announced Covington Mayor Mike Cooper at the Covington city council meeting on Oct. 18.

The company will have about 20 professional positions, some hiring locally, some from their corporate offices elsewhere and will occupy about 7,000 square feet in 2000 Covington Centre.

Cooper said the company plans to become involved in local business organizations including the Covington Business Association, patronizing local restaurants and businesses in the course of the business day and plan on being here for two to three years.

The company is constructing a 136-mile, 16-inch pipeline to transport gasoline, jet fuel and diesel from refineries in Norco to an existing petroleum transportation hub in Collins, Miss. owned by Plantation Pipe Line Co., 51 percent of which is owned by Kinder Morgan. Kinder Morgan will operate the pipeline.

Kinder Morgan is partnering with Valero Energy Corp. that will own Parkway Pipeline LLC. The pipeline will have an initial capacity of 110,000 barrels per day with the ability to expand to more than 200,000 b/d, according to a news release.

Pending receipt of environmental and regulatory approvals, the approximately $220 million pipeline project is expected to be in service by mid-year 2013.

About $140 million of the construction cost will be spent in Louisiana and $80 million in Mississippi. Local property tax impact is estimated to be $3.3 million in Louisiana and $2.5 million in Mississippi, according to the news release.

According to the new release, "The economic impact of construction for a project of this size will be significant as workers will reside locally and rely upon local businesses, housing and support services during the construction period. Local businesses will benefit directly from servicing these workers and the project directly."

UGI Energy to spend $150 million building Marcellus Shale gas pipeline

SPRING TOWNSHIP, Pa. - UGI Energy Services Inc. has announced that it will spend about $150 million to build an underground pipeline to extend its reach from the Marcellus shale region of Pennsylvania.

The midstream and energy marketing unit of UGI Corp. will extend for 28 to 30 miles from its Auburn Gathering System.

The pipeline will connect the southern part of Susquehanna County and northern Wyoming County to an undetermined location and include a connection to the Transcontinental (Transco) gas pipeline.

"We'll be taking the gas to market," Terranova said. "It's a brand-new pipeline."

He said that UGI Energy will buy land along the route and will own the rights to construct and operate the pipeline on that land.

He added that the company will have to get permits wherever they are required on the state, county and local levels.

Terranova said he expects that several hundred jobs will be created between the contractors working on the pipeline and those employed by UGI. About 230 employees work at the Spring Township headquarters.

GOP hopeful Herman Cain spoke for Koch brothers propaganda front

Koch Industries, now headed by Charles Koch and his brother David, was founded in Wichita, Kansas, in the 1920s. It currently has 70,000 employees.  

Koch Industries was founded in the 1920s by patriarch Fred Koch, a U.S. engineer who developed a new method of converting oil into gasoline. He helped to build a refining network in the Soviet Union in the 1930s, then returned to the United States with a visceral hatred for Joseph Stalin and communism. 

A fiercely libertarian ideology live on at Koch Industries' spartan headquarters in Wichita, Kan.

With around $100 billion in sales, Koch Industries is a heavyweight among U.S. oil trading firms, and one of the most secretive U.S. corporations. 

Koch Industries owns a 4,000-mile U.S. pipeline network and three of the country's most profitable refineries. The company operates in 60 countries.

The Koch brothers, Chairman and CEO Charles and co-owner David Koch, are high-profile supporters of libertarian and anti-regulation U.S. politics. Among their campaigns is one to end the U.S. Environmental Protection Agency's mandate for regulating greenhouse gas emissions. The Kochs fiercely deny global warming. A profile in the New Yorker magazine last year identified the brothers as behind-the-scenes operators who bankroll the U.S. Tea Party movement.

One of the groups funded by the Koch brothers is Americans for Prosperity. For the past five years, GOP presidential hopeful Herman Cain has been the front man for the AFP propaganda operation. Most of Cain’s campaign staff comes from Americans for Prosperity. The U.S. Supreme Court in Noerr Motor Freight v. Eastern Railroad Presidents ruled that third-party propaganda fronts are legal but unethical. 

Before AFP and his radio talk show careers, Cain was a Washington lobbyist for a restaurant trade association.