Natural gas in storage in the U.S. fell last week but is about 9.3 percent above the five-year average for this time of year, a government report said Thursday.
The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states fell by 12 billion cubic feet to 3.53 trillion cubic feet for the week ending Nov. 23.
The inventory level was well above the five-year average of about 3.23 trillion cubic feet in underground storage, and ahead of last year's storage level of 3.42 trillion cubic feet, according to the government data.
In morning trading, natural gas for January delivery rose 0.5 cent to about $7.49 per 1,000 cubic feet on the New York Mercantile Exchange.
Friday, November 30, 2007
Thursday, November 29, 2007
Four Corners Natural Gas Plant Fire is Re-Routed
Williams Partners L.P. today provided an update on the status of its Ignacio Gas Processing plant following the fire at the facility earlier today.
This morning around 3:30 a.m. Mountain Standard Time, a cooling tower at the plant caught fire, damaging it and a few adjacent buildings. The plant has been shut down and the fire has been extinguished. There were no injuries as a result of this incident.
The Ignacio plant is part of Williams Four Corners LLC, which is owned by Williams Partners. Williams (NYSE: WMB) operates the facility, which is located near Durango, Colo., and has a processing capacity of approximately450 million cubic feet per day (MMcfe).
The partnership and Williams have re-routed approximately 100 MMcfe of the plant's normal production capacity to other facilities in the San Juan Basinand continue to work on re-routing additional production capacity. Inaddition to the Ignacio plant, the Four Corners gathering system is connectedto the Kutz and Lybrook natural gas processing plants and the Milagro andEsperanza natural gas treating plants in northwestern New Mexico. The FourCorners system's normal volumes are in excess of 1.5 billion cubic feet perday (Bcfe) and approximately 350 MMcfd has been affected as a result of thisoutage.
This morning around 3:30 a.m. Mountain Standard Time, a cooling tower at the plant caught fire, damaging it and a few adjacent buildings. The plant has been shut down and the fire has been extinguished. There were no injuries as a result of this incident.
The Ignacio plant is part of Williams Four Corners LLC, which is owned by Williams Partners. Williams (NYSE: WMB) operates the facility, which is located near Durango, Colo., and has a processing capacity of approximately450 million cubic feet per day (MMcfe).
The partnership and Williams have re-routed approximately 100 MMcfe of the plant's normal production capacity to other facilities in the San Juan Basinand continue to work on re-routing additional production capacity. Inaddition to the Ignacio plant, the Four Corners gathering system is connectedto the Kutz and Lybrook natural gas processing plants and the Milagro andEsperanza natural gas treating plants in northwestern New Mexico. The FourCorners system's normal volumes are in excess of 1.5 billion cubic feet perday (Bcfe) and approximately 350 MMcfd has been affected as a result of thisoutage.
Wednesday, November 28, 2007
Alberta Royalty Increases Discourages Another
Canadian Natural Resources (TSX: CNQ) has cut its Canadian conventional crude oil and natural gas capital budget by one-third to $1.7 billion for 2008, citing the impact of higher Alberta royalties on energy production.
"Of the reduction in capital spending, 78 per cent or $645 million is due to a reduced drilling program in Alberta largely as a result of the impact of the royalty review changes," the Calgary-based company said Tuesday.
In October, Alberta Premier Ed Stelmach said the province would go ahead with some of a royalty panel's recommendations, choosing to take $1.4 billion in additional revenues instead of the proposed $2 billion.
Several major energy companies had warned that royalty increases would discourage their investment in Alberta's resources.
"The new royalty regime introduced by the province of Alberta, effective for 2009, will take the vast majority of any increases in natural gas prices for most of our natural gas wells," John Langille, vice-chairman of Canadian Natural Resources, said in a release.
"As such, the ability to increase natural gas drilling activity with increasing gas prices is severely impacted."
He said the natural gas side of the business is faced with eroded economics due to low prices, along with a new royalty regime that reduces the returns on certain types of drilling.
"Of the reduction in capital spending, 78 per cent or $645 million is due to a reduced drilling program in Alberta largely as a result of the impact of the royalty review changes," the Calgary-based company said Tuesday.
In October, Alberta Premier Ed Stelmach said the province would go ahead with some of a royalty panel's recommendations, choosing to take $1.4 billion in additional revenues instead of the proposed $2 billion.
Several major energy companies had warned that royalty increases would discourage their investment in Alberta's resources.
"The new royalty regime introduced by the province of Alberta, effective for 2009, will take the vast majority of any increases in natural gas prices for most of our natural gas wells," John Langille, vice-chairman of Canadian Natural Resources, said in a release.
"As such, the ability to increase natural gas drilling activity with increasing gas prices is severely impacted."
He said the natural gas side of the business is faced with eroded economics due to low prices, along with a new royalty regime that reduces the returns on certain types of drilling.
Tuesday, November 27, 2007
Shotgun Natural Gas
Shotgun Energy Corporation (OTCBB: SGNE) owns an undivided 85% working interest in the giant gas field lease in the prolific natural gas producing Uinta Basin, located in the U.S. Rockies, Utah. The lease comprises 13,189 acres with a potential 4 trillion cubic feet recoverable gas and is over-pressured by a 0.55 - 0.85 gradient.
According to available data in the area, the prospect property has been delineated using several hundred miles of seismic data. The results of the 2D Seismic program which was recently completed will be processed along with available data from a previous Texaco Seismic shoot which will add to the confidence in the interpretation of the data. "We feel the data supports a basin-wide deep gas accumulation covering the entire field," states Robert Klein, President of Shotgun Energy Corporation.
This giant gas lease borders other leases owned by EOG Resources Inc., EnCana Corp., and Bill Barrett Corporation, nearby. Major energy companies today recognize that tight gas reservoirs, where geological formations make production complex, and coal-bed methane, where gas is extracted from coal deposits, are two of the more important near term sources to boost North American production of natural gas as demand outstrips supply and drives up prices.
The U.S. Geological Survey estimated (in 1995) basin-center and deep-basin gas resources in the Rocky Mountain Laramide basins to be 250 TCF. The Drunkards Wash Field, just south of the prospect area, is estimated to be between 2-4 TCF of recoverable gas. The Jonah Field Overpressured Gas Plain, which is analogous to our prospect area, has similar over-pressuring, depth, reservoir rocks and is estimated to be 2.5+ TCF. Several similarities exist between the Elmworth field in Alberta, Canada (one of the most prolific gas fields in North America) and the Company's Uinta Basin Over-pressured Gas Prospect. In addition, Shotgun Energy Corporation has a 0.70% (0.70 of 1%) proportionate, reducible, Gross Overriding Royalty interest in the LAK Ranch Oil Project located in Newcastle, Wyoming. This royalty interest equates to $0.63 per barrel based on a price of $90.00 per barrel for Shotgun.
According to available data in the area, the prospect property has been delineated using several hundred miles of seismic data. The results of the 2D Seismic program which was recently completed will be processed along with available data from a previous Texaco Seismic shoot which will add to the confidence in the interpretation of the data. "We feel the data supports a basin-wide deep gas accumulation covering the entire field," states Robert Klein, President of Shotgun Energy Corporation.
This giant gas lease borders other leases owned by EOG Resources Inc., EnCana Corp., and Bill Barrett Corporation, nearby. Major energy companies today recognize that tight gas reservoirs, where geological formations make production complex, and coal-bed methane, where gas is extracted from coal deposits, are two of the more important near term sources to boost North American production of natural gas as demand outstrips supply and drives up prices.
The U.S. Geological Survey estimated (in 1995) basin-center and deep-basin gas resources in the Rocky Mountain Laramide basins to be 250 TCF. The Drunkards Wash Field, just south of the prospect area, is estimated to be between 2-4 TCF of recoverable gas. The Jonah Field Overpressured Gas Plain, which is analogous to our prospect area, has similar over-pressuring, depth, reservoir rocks and is estimated to be 2.5+ TCF. Several similarities exist between the Elmworth field in Alberta, Canada (one of the most prolific gas fields in North America) and the Company's Uinta Basin Over-pressured Gas Prospect. In addition, Shotgun Energy Corporation has a 0.70% (0.70 of 1%) proportionate, reducible, Gross Overriding Royalty interest in the LAK Ranch Oil Project located in Newcastle, Wyoming. This royalty interest equates to $0.63 per barrel based on a price of $90.00 per barrel for Shotgun.
Monday, November 26, 2007
Turkmenistan Natural Gas
Turkmenistan plans to increase its natural gas price for Russia by 30% from US $ 100 to US $ 130 per 1000 cubic meters, Kommersant newspaper quoted Gasprom chief executive Alexei Miller as saying following the talks with Turkmen President Gurbanguly Berdimuhamedov yesterday.
"Our Turkmen partners raised the issue of the need to increase purchase prices for its gas at least by 30% as early as 2008," the head of Gasprom said. He noted that the supplier's initiative is understandable and said it was "not surprising".
According to Kommerstan, the price hike will cost Ukraine who buys all Turkmen gas from Gasprom extra US $ 1,26 billion as minimum.
Alexei Miller explained that the European Commission and the US state administration insisted that the purchasing price for Turkmen gas should be increased and that according to Gasprom estimates the average wholesale price of gas for European consumers will grow to US $ 354 per 1000 cubic meters of gas by the end of 2008.
"Our Turkmen partners raised the issue of the need to increase purchase prices for its gas at least by 30% as early as 2008," the head of Gasprom said. He noted that the supplier's initiative is understandable and said it was "not surprising".
According to Kommerstan, the price hike will cost Ukraine who buys all Turkmen gas from Gasprom extra US $ 1,26 billion as minimum.
Alexei Miller explained that the European Commission and the US state administration insisted that the purchasing price for Turkmen gas should be increased and that according to Gasprom estimates the average wholesale price of gas for European consumers will grow to US $ 354 per 1000 cubic meters of gas by the end of 2008.
Sunday, November 25, 2007
Natural Gas Drilling Requires Neighborhood Approval
More than 300 Grand Prairie homeowners packed into a sweltering school cafeteria recently, seeking information about natural gas drilling in the western portions of Dallas County's Barnett Shale.
Before companies can start drilling under neighborhoods, they must get approval through leases from a majority of residents. But the firms may face one of their most unlikely obstacles yet: 63-year-old Doranna Corley.
Mrs. Corley is the leader of a grassroots movement to assemble Grand Prairie's underrepresented neighborhoods – some of which haven't organized in decades – to inform residents about gas well drilling. Spurred by a bad experience with a drilling company, she launched her door-to-door campaign, issuing fliers and planting yard signs. The first meeting drew more than 400 people.
Her plan is to organize a committee that will represent Grand Prairie residents who are not in a homeowners association.
"I'm actually working for the underdog right here," said Mrs. Corley, who recalled the unpleasant moment when she was escorted out of a recent lease-signing event after asking questions about her own lease offer. "We have no money behind us; we don't have professionals behind us. We're just out here trying to do the best we can for these people who don't have anybody helping them."
Before companies can start drilling under neighborhoods, they must get approval through leases from a majority of residents. But the firms may face one of their most unlikely obstacles yet: 63-year-old Doranna Corley.
Mrs. Corley is the leader of a grassroots movement to assemble Grand Prairie's underrepresented neighborhoods – some of which haven't organized in decades – to inform residents about gas well drilling. Spurred by a bad experience with a drilling company, she launched her door-to-door campaign, issuing fliers and planting yard signs. The first meeting drew more than 400 people.
Her plan is to organize a committee that will represent Grand Prairie residents who are not in a homeowners association.
"I'm actually working for the underdog right here," said Mrs. Corley, who recalled the unpleasant moment when she was escorted out of a recent lease-signing event after asking questions about her own lease offer. "We have no money behind us; we don't have professionals behind us. We're just out here trying to do the best we can for these people who don't have anybody helping them."
Saturday, November 24, 2007
LNG from Nigeria to Germany
E.ON AG's (NYSE:EONGY) Ruhrgas unit plans to import liquid natural gas (LNG) to Germany from Nigeria to lessen its dependence on Russian gas, Westdeutsche Allgemeine Zeitung reported, citing Dietrich Gerstein, who is in charge of LNG purchasing at E.ON.
Nigeria may be the most important market in western Africa for E.ON Ruhrgas, Gerstein told the newspaper.
Iran, which also has a high priority for E.ON, is currently not a viable natural gas market for E.ON due to unfavorable political circumstances, he said.
Other countries which may be interesting the company are Egypt, Libya, Algeria and Mauritania, all of which have large natural gas reserves and are geographically close to Europea, he said.
Some 35 pct of natural gas in German last year came from Russia, Westdeutsche Allgemeine said.
Nigeria may be the most important market in western Africa for E.ON Ruhrgas, Gerstein told the newspaper.
Iran, which also has a high priority for E.ON, is currently not a viable natural gas market for E.ON due to unfavorable political circumstances, he said.
Other countries which may be interesting the company are Egypt, Libya, Algeria and Mauritania, all of which have large natural gas reserves and are geographically close to Europea, he said.
Some 35 pct of natural gas in German last year came from Russia, Westdeutsche Allgemeine said.
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