November Newsreel: Gazprom launches business in North America; Quanta acquires Price Gregory and more

November 2009 Vol. 236 No. 11

Gazprom Marketing & Trading Launches North American Natural Gas Business
Quanta Finalizes Price Gregory Acquisition; Forms New Natural Gas And Pipeline Division
Bayou Companies Acquiring Garneau Assets In Canada

Henry Linden, World-Renowned Energy Expert, Dies At 87
DOE, Interstate Oil & Gas Compact Commission In Agreement
PRCI Board Elects MacGregor As New Chair
Deal Completed For Underground Coal Gasification Project
Big Labor Joins Push Alaska Gas Pipeline
GTI Awarded Grants For California Energy R&D
Delphi Midstream Acquires Gas Assets
Natural Gas Utilities Winter Outlook: Lower Bills Likely
Invensys To Develop ConocoPhillips’ Proprietary E-Gas Technology
Plans For Texas Offshore Oil Port Back On Track

Gazprom Marketing & Trading Launches North American Natural Gas Business
Gazprom Marketing & Trading USA, Inc. has begun trading and marketing of natural gas in North America, marking the first entry by a Gazprom Group company in the United States.

“The development of new markets and products is key to Gazprom Group’s global energy strategy. We have now achieved our goal of bringing the world’s largest gas company into the world’s largest gas market,” said Vitaly Vasiliev, CEO of Gazprom Marketing and Trading Limited in the United Kingdom. “Our U.S. affiliate is now off and running and we look forward to significant growth and profitability from our expanding geographical base.”

Gazprom Marketing & Trading USA has acquired physical gas supplies from counterparties at designated pipeline hubs across North America by executing a number of innovative, long-term gas swap transactions that have allowed it to quickly gain a substantial physical gas supply position in North America. 

“These gas swaps have given us a strong supply foundation to build our marketing and trading operations,” said John Hattenberger, President of Gazprom Marketing & Trading USA. “We have already signed deals giving us more than 350 MMcf/d of physical supplies at several different locations all across the U.S., for the next three to seven years. Our goal now is to grow from that position rapidly and expand into all major North American markets.”

Gazprom Marketing & Trading USA will also market LNG exported to North America by its Gazprom Group affiliates. In May the company signed long-term agreements enabling it to buy LNG from the Sakhalin-2 LNG plant, off Russia’s Pacific coast, regasify the LNG in a facility in Baja California, Mexico, transport it by pipeline to southern California, and sell natural gas into southwestern U.S. markets.

Quanta Finalizes Price Gregory Acquisition; Forms New Natural Gas And Pipeline Division
Quanta Services, Inc. closed on its acquisition of Price Gregory Services Incorporated, a leading transmission pipeline infrastructure service provider. Quanta issued 10.9 million shares of Quanta common stock and paid $96 million in cash to stockholders of Price Gregory Services.

Quanta has formed a new division called the Natural Gas and Pipeline Division and appointed Earl C. “Duke” Austin, Jr. president and Paul M. Daily executive vice president. Price Gregory Services will become part of this new division and J. Thomas White will serve as president with responsibility for its transmission pipeline operations and facility services.

Austin most recently served as president of North Houston Pole Line (NHPL), a Quanta Services company and one of the largest infrastructure contractors in the Southwest.

In addition to his new position, Daily will continue as president of InfraSource Underground Services, LLC, a Quanta Services company.

White previously served as president of Price Gregory International.

Bayou Companies Acquiring Garneau Assets In Canada
The Bayou Companies Inc., a subsidiary of Insituform Technologies, Inc. will acquire Garneau’s pipe-coating and insulation facility and associated assets located in Camrose, Alberta Canada. Bayou Perma-Pipe Canada, Ltd., a joint venture between Bayou and Perma-Pipe, Inc., will acquire the Garneau facility and assets and serve as the operating company for Bayou’s Canadian operation.

“This acquisition represents another strategic step for Insituform’s energy and mining division. A pipe-coating and insulation facility in Western Canada will allow Bayou to better serve its customers and will increase Bayou’s addressable market by $200 million,” said Jerry Shea, Bayou’s Managing Director, Business Development.

Henry Linden, World-Renowned Energy Expert, Dies At 87
Henry Linden, a longtime figure in the natural gas industry, died Sept. 13 in Chicago. He was 87. Linden was a faculty member at the Illinois Institute of Technology since 1954.

For 30 years, Linden served the Institute of Gas Technology (IGT) in various management capacities, including 17 years as director and four years as president and trustee. He was instrumental in establishing the Gas Research Institute (GRI) and served as its first president and member of the board of directors from 1977-87. He also served as a director of five major corporations: Sonat, Inc. and its subsidiary Southern Natural Gas Co. (1974-94), Reynolds Metals Co. (1977-92), UGI Corp. (1980-92), and The AES Corp. (1987-98).

After retiring from GRI, he worked to establish a comprehensive research and education program in sustainable global energy development at IIT. He served on several federal advisory bodies dealing with energy policy, technology, and regulation, beginning with the Kennedy administration, and held a presidential appointment during the Ford aAdministration. An author or co-author of more than 240 publications and 27 patents, he wrote and lectured extensively on U.S. and world energy issues throughout his lifetime.

“Henry Linden was a giant in advancing the efficient utilization of fuels,” said IIT President John Anderson. “He not only contributed greatly to advance energy technology, but also to the way we think about the effect of carbon-based fuels on the environment.”

DOE, Interstate Oil & Gas Compact Commission In Agreement
An agreement aimed at improving cooperation and collaboration in the areas of oil and natural gas supply, delivery, and climate change mitigation, was signed by the U.S. Department of Energy (DOE) and the Interstate Oil and Gas Compact Commission (IOGCC). The Memorandum of Understanding provides a framework for states and DOE to work more closely on “responsible domestic production of oil and natural gas; carbon capture, transport and geologic storage; and other topics of mutual interest.”

PRCI Board Elects MacGregor As New Chair
The Board of Directors of Pipeline Research Council International, Inc., (PRCI), has elected Paul MacGregor, Vice President, Operations and Project Services, with TransCanada Pipelines, Ltd., as Chair. He replaces Art Meyer, Senior Vice President, Oil Sands Projects for Enbridge Pipelines, Inc., who will continue on the Executive Committee as Past Chair. The board elected Eric J. Amundsen, Vice President, Technical Services with Panhandle Eastern Pipe Line Co., as Vice Chair.

MacGregor has been a PRCI board member for four years and has held numerous key positions with TransCanada since 1981 where he leads supply chain management and procurement activities, performance standards, and other business support services.

In addition to MacGregor, Amundsen, and Meyer who have designated seats on PRCI’s nine-member Executive Committee, the board seated two new members on the committee by electing for three-year terms, Jesus Soto, Jr., Vice President, Operations Services with El Paso Pipeline Group, and Kevin Bodenhamer, Vice President, Technical Services with EPCO, Inc.

Deal Completed For Underground Coal Gasification Project
GasTech, Inc. of Casper, WY has concluded the sale to Linc Energy, Brisbane, Australia, of coal leases containing 7 billion tons of deep Powder River Basin (PRB) coal. These PRB coals are the same beds being exploited in the world’s largest coal mines. Deep coals are the greatest fossil fuel resource in the world, with an energy content conservatively many times that of oil and gas, according to a news release from GasTech. At depths below 500 feet, PRB coals are uneconomic for conventional mining. However, the energy from these coals can be recovered using Underground Coal Gasification (UCG). Linc’s 7 billion tons of coal has the energy equivalent of more than 20 billion barrels of oil.

Big Labor Joins Push Alaska Gas Pipeline
The Alaska Natural Gas Pipeline project received a major boost last month at the AFLCIO convention in Pittsburgh, PA. Tagged as the “important project to our nation’s economic future,” the project was endorsed in three resolutions unanimously passed by AFL-CIO convention delegates.
 
Vince Beltrami, president of the Alaska AFL-CIO, addressed the convention on the importance of this gas pipeline project to labor. “It would create tens of thousands of direct jobs and estimates exceeding 100,000 indirect jobs. From the engineering and manufacturing of pipe and other parts to the transportation, loading, shipping, and construction of the project and operations thereafter. So, as we adopt this resolution, I seek only to make this body aware of and hope to build support for the largest project in the country that moves us to a cleaner greener economy and puts thousands of our members to work.”

GTI Awarded Grants For California Energy R&D
Nearly $4 million was awarded by the California Energy Commission to Gas Technology Institute for projects designed to increase energy efficiency and reduce emissions in residential homes.

“Over the years, GTI, along with our sponsors and partners, has continued to advance multiple types of high-efficiency, environmentally friendly furnaces, boilers and HVAC systems; water heaters; and cooking equipment into the marketplace,” said Bill Liss, GTI’s Managing Director, End Use Solutions Center. “We also have a strong history of providing venting and code issue solutions for single- and multi-family homes.”

Karen Douglas, Energy Commission Chairman, said “These two projects address several major California energy goals, including the reduction of carbon and an increase of energy efficient technologies decreasing the state’s dependence on fossil fuels.”

Through one award, GTI will manage a 30-month program which includes 15 partner organizations. GTI and its partners will ultimately provide design and installation guidance for high-efficiency radiant cooling and heating systems, and related improvements. The second research contract addresses energy and efficiency issues for water-heating systems.

“Natural gas water heating is used in over 80% of the 12.3 million California households, and consumes over 2.1 billion therms annually,” said Doug Kosar, GTI’s Institute Engineer and program manager for the three-year project. “This program has the overall goal of significantly reducing residential water-heating energy consumption.”

Delphi Midstream Acquires Gas Assets
Delphi Midstream Partners, LLC has agreed to acquire a natural gas gathering and compression system, the Mansfield System, located in Tarrant County, TX from Carrizo Oil & Gas, Inc. The Mansfield System has a current operating capacity of 70 MMcf/d and can be expanded to 90 MMcf/d with additional compression. The acquisition was expected to close in late October. In addition, DMP will obtain the right to invest up to an additional $100 million to develop midstream infrastructure in northeast Pennsylvania in support of Carrizo’s Marcellus Shale development plan.

Natural Gas Utilities Winter Outlook: Lower Bills Likely
The American Gas Association saya natural gas customers can expect lower bills on average this winter compared to last year thanks to plentiful domestic supplies and lower wellhead prices.

“With natural gas storage at all time highs and prices well below past years, homeowners are in for some well-deserved relief from high energy costs when heating their homes this winter,” said David Parker, AGA president/CEO.


Invensys To Develop ConocoPhillips’ Proprietary E-Gas Technology

Invensys Operations Management has reached a multi-year agreement with ConocoPhillips to provide dynamic simulation for the development of ConocoPhillips’ proprietary E-Gas technology.

Under the terms of the contract, Invensys will supply its DYNSIM® modeling and simulation software to help improve the design, start-up and operation of new coal gasification plants. In addition, Invensys will be a preferred supplier of dynamic simulation software to licensees of ConocoPhillips’ E-Gas technology.

Plans For Texas Offshore Oil Port Back On Track
A settlement worked out by Oiltanking Holdings Amercias with ex-partners Enterprise Products Partners and Teppco Partner has cleared the way for a $1.8 billion oil port off the Texas coast to move forward.

In August 2008, affiliates of Enterprise TEPPCO and Oiltanking Holding Americas, Inc. formed a joint venture to design, construct, own and operate a new Texas Offshore Port System (TOPS). As proposed, the project would be located 36 miles off the coast of Freeport, TX and designed to unload crude from two supertankers at a time, totaling up to 1.8 MMbpd.

The project calls for storage facilities with 5.1 MMbbls of crude storage capacity and an associated 160-mile pipeline system with capacity to deliver up to 1.8 MMbpd of crude oil. System capacity could be expanded with construction of additional offshore facilities. Development of the offshore port system and onshore infrastructure is supported by long-term contracts with Motiva Enterprises LLC and an affiliate of ExxonMobil which together have committed a total volume of 725,000 BPD.

Despite losing two of its three founding partners, the Texas Offshore Port System will continue with permit applications in the works and a search for new investors, according to a Houston Chronicle article.

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