Natural gas utility rate books and special contracts. Prescribing a system of accounts for natural gas companies under the natural gas act. With this article, well bring you to a level of comfort in reading your oil and gas royalty statement. Wtg has core businesses in natural gas distribution operations, natural gas transmission services, gas gathering processing, and natural gas liquids transmission services. I work in commercial operations for a natural gas marketer, and i am finding this book to be very helpful when i need quick, tothepoint explanations on how certain hedging. This book documents the latest technology in all areas of natural gas engineering.
If both products and residue are reported on the same lease, the residue volume is not used to calculate the. Natural gas severance taxes audit policy on marketing costs. Corrosion of materials in contact with natural gas and condensed water is also a common problem in the oil and gas industry. Leave the area immediately and then call 911 and 8004584251. Dec 12, 2019 the irs allows you to deduct any expenses that you incur in owning your royalty. Keystone is willing to provide the gas gathering, compression and. Oil and gas royalty statements understand statement.
The composition of the raw natural gas extracted from producing wells depends on the type, depth, and location of the. Texas pipelines are divided into the categories of natural gas and lpgas distribution lines 156,459 miles, hazardous liquid and natural gas transmission lines 72,370 miles, hazardous liquid and natural gas regulated gathering lines 6,654 miles, intrastate production and gathering lines leaving a lease 181,687 miles, and interstate. The internal revenue service allows you to subtract expenses. Handbook of natural gas transmission and processing 1st edition. Great handbook if you work in natural gas operations, scheduling, supply, or if you just want to learn more about how natural gas pipeline systems and supply work. Buy products related to natural gas pipeline products and see what. Gas that condenses at the wellhead or in the gathering system at ambient temperatures and is. Aug 01, 2018 a gas storage agreement is an exchange of money for the right to store natural gas in a storage facility typically a depleted salt dome reservoir or water aquifer over a period of time. Natural gas processing is a complex industrial process designed to clean raw natural gas by separating impurities and various nonmethane hydrocarbons and fluids to produce what is known as pipeline quality dry natural gas. As natural gas becomes an increasingly important source of energy, understanding of gas pricing concepts is crucial for energy producers, consumers, and regulators.
Its roughly similar to what youd earn from a business you own, rental property or bond portfolio. Crude oil and natural gas taxes frequently asked questions. The advent of natural gas deregulation combined with the growth of a highly liquid oil and gas futures market has moved the industry in this direction. I recommend it highly, as a reference and textbook. What you earn from oil and gas royalties is treated as investment income. The reduction in gathering fees is forecast to begin next january, when eqt expects the longdelayed mountain valley pipeline to enter service.
Naturalgas processing is a complex industrial process designed to clean raw natural gas by separating impurities and various nonmethane hydrocarbons and fluids to produce what is known as pipeline quality dry natural gas naturalgas processing begins at the well head. If you smell natural gas or suspect a potential gas leak, leave the area immediately and call enstars 24hour emergency line at. Natural gas company means a person engaged in the transportation of natural gas in interstate commerce, or the sale in interstate commerce of such gas for resale. The contributions in this book present an overview of cutting edge research on natural gas which is a vital component of worlds supply of energy. Book fundamentals of natural gas portions of this website were excerpted from the book fundamentals of natural gas. The dry gas the gas that has had its liquids removed is sold to a gas company.
Distributing propane via pipeline systems rate books are not approved by the mpsc. Gas gathering, compression and processing agreement. Natural gas is found in underground deposits, or reservoirs, and as associated gas in oil reservoirs. This book from famous penwell nontechnical series covers all aspects of oil and gas pipeline design, construction and operations. From the well, the natural gas goes into gathering lines, which are like branches on a tree, getting larger as they get closer to the central collection point. This book intends to educate in the areas of gas transmission and processing. These include upstream gathering lines, which move gas from production fields to processing plants. Natural gas means either natural gas unmixed, or any mixture of natural and artificial gas. Dedicated properties owner acknowledgment agreement is defined in section 9.
Each month royalty owners across the nation receive oil and gas royalty statements sometimes they are unfamiliar and a little confusing. Cost incurred related to the gas activities, such as transportation, marketing and processing crude oil, natural gas and refined petroleum products. If you smell natural gas or suspect a potential gas leak, leave the area immediately and call enstars. Oil and gas leasehold interests and oil and gas mineral fee interests, including. How mlps profit from natural gas gathering and processing. The second edition of the book substantially revised, was published in march 2017. Any property that does not have a class life and has not been designated by law as being in any other class. The amount of pressure in a pipeline is measured in pounds per square inch.
The large majority over 90% of traded natural gas is transported by pipeline. The processing of natural gas consists of the extraction of. Natural gas has a widely varying composition depending on the field, the formation and the reservoir from which it is produced. Handbook of natural gas transmission and processing. In 2003, disagreements over the classification of various segments of pipeline operated by a few of the largest gas gathering line operators in the united states prompted the research and special programs. Whenever a taxpayer reports as being liable for the tax for a lease, the oil field cleanup regulatory fee applies only to the reported volumes of raw gas rg1, lease use gas lu3, products pr6 and residue gas rs5. Oil and gas production handbook an introduction to oil. Natural gas supplies nearly 30% of the uss energy contribution expected to continue to grow. Utilities with rates set by local government rate books are not approved by the mpsc. Gas gathering facilities, from the receipt points to the inlet of the processing plant, including any needed compression, as expanded from time to time. The gas from a natural gas well is collected using gathering lines. The pucns pipeline safety program involves the inspection of liquid propane and natural gas piping systems statewide.
Gatherer owns and operates a natural gas gathering system and related facilities in louisiana and texas. The gas is then sent onto a processing or treatment plant where liquids, heavy gas condensates and acidic gasses are removed prior to distribution for use. Vessels, barges, tugs, and similar water transportation equipment. Wtg has core businesses in natural gas distribution operations, natural gas transmission services, gas gatheringprocessing, and natural gas liquids transmission services. A gas storage agreement is an exchange of money for the right to store natural gas in a storage facility typically a depleted salt dome reservoir or water aquifer over a period of time. The gas has to be separated into marketable fractions and treated to trade specifications and to protect equipment from contaminants. Gas contracts the gas gathering contracts may have many forms including fees for compression, treating, or gathering. Pucn gas pipeline engineers monitor the design, construction, operation, and maintenance of gas systems under the commissions jurisdiction and title 49 of the code of federal regulations cfr, parts 191 and 192, 193, and 199 the pucns gas pipeline engineers also inspect. Antero resources announces midstream fee reductions and.
Antero resources is an independent natural gas and oil company engaged in the acquisition, development and production of unconventional liquidsrich natural gas properties located in the appalachian basin in west virginia and ohio. Gas gathering, transportation, marketing and processing costs cost incurred related to the gas activities, such as transportation, marketing and processing crude oil, natural gas and refined petroleum products. Over time, oil and gas wells run dry, so the irs allows you to recover that loss of value by writing off a portion of your income every year. Delivery of natural gas from the wellhead and processing plant to city gate stations or industrial end users. Wtg owns and operates approximately 5,192 miles of natural gas distribution ma inlines and serves 28,108 customers within. Why natural gas gathering and processing are important for. This can become a constraint for the operation of gathering systems. Producers warrant to gatherer that i the delivery of producers gas and mv mitigation gas at one or more springridge receipt points hereunder will not subject any of the springridge gathering system or any portion thereof to regulation by ferc as x a natural gas company under the natural gas act or y a section 311 transporter under the. This chapter provides an overview of natural gas compression, which is used in all aspects of the natural gas industry, including gas lift, reinjection of gas for pressure maintenance, gas gathering, gas processing operations circulation of gas through the process or system, transmission and distribution systems, and reducing the gas volume.
The number of gallons of plant products per 1,000 cubic feet of gas. Meter size 200 800 meter size 2300 meter larger than 2300. If producers decline to buy the production wellhead. The commission also oversees natural gas pipeline companies in the state of indiana and ensures operators of gas distribution systems follow state and federal guidelines. For many years, phmsa regulated natural gas gathering lines only in populated areas. Oil and gas royalty statements understand statement deductions.
The federal power commission acting pursuant to authority granted by the natural gas act 58stat. It is an invaluable reference on natural gas engineering and the latest. For many investors, the most valuable deduction is the depletion deduction. The gathering of natural gas consists of aggregating natural gas produced from various wells through small diameter gathering lines to processing plants. Examines natural gas energy costs and pricing with the aim of delivering on the. Cubic foot means a volume of gas occupying a space of one cubic foot at a temperature of 60 o f and at the applicable base pressure. National fuel gas midstream company, llcs primary business is to build, own and operate natural gas processing and pipeline gathering facilities in the appalachian region. This book from famous penwell nontechnical series covers all aspects of oil and gas. Delivering gas to you clean natural gas american gas. Any natural gas gathering line placed in service after april 11, 2005. Material changes 1 updated oil and gas industry overview, irm 4. As one of the national fuel gas system companies, midstream shares in more than 100 years of.
Net salvage value means the salvage value of property retired less the cost of removal. This combination of stronger fees and higher volumes fueled growing earnings across. Terms like severance tax, btu factor, decimal interest, api number etc. It is a useful book for every engineer, scientist, and researcher who has ever faced the challenge of investigating natural gas gathering, processing, and transport. Wellhead pressure many gas gathering systems require a low pressure at the wellhead to facilitate production. Natural gas is a combustible mixture of hydrocarbon gases, primarily methane but also heavier gaseous hydrocarbons such as ethane, propane and butane.
All gas measured and utilized as fuel for the gathering system. Gas gathering, transportation, marketing and processing costs. The composition of the raw natural gas extracted from producing wells. Unlike other fossil fuels, natural gas is clean burning and emits lower levels of potentially. The dry gas the gas that has had its liquids removed.
Generally, natural gas gathering and processing providers enter into contracts with the producers of natural gas names such as chesapeake energy or range. If both products and residue are reported on the same lease, the residue volume is not used to calculate the fee residue reported without products is subject. Stripping out impurities and other hydrocarbons and fluids to produce pipeline grade natural gas that meets specified tariffs pipeline quality natural gas is 9598 percent methane. Fees and volumes fuel a strong quarter for oneok, inc.
Both the federal government and the states have jurisdiction over gathering pipelines, which is estimated to include 240,000 miles of onshore gathering pipelines. Gas flowing from higher to lower pressure is the fundamental principle of the natural gas delivery system. The lines are usually medium size 18 inch diameter steel pipes buried four feet underground and carry unodorized raw gas at a pressure of approximately 715 psi. Raw natural gas after transmission through the fieldgathering network is processed before. A major business for many mlps part 2 of 2 continued from part 1natural gas gathering. West texas gas book depreciation accrual rate study at. Natural gas monthly energy information administration. Chapter 6 deals with the main items of surface equipment used in oil and gas fields.
Royalty interest type for purposes of this article, only two types of interests will be addressed the royalty interest ri and the overriding royalty interest orri, also called an override. Regulation of natural gas gathering lines in the face of. The iurc regulates electric, natural gas, steam, water, and wastewater utilities, and to a lesser extent, telecommunications and video providers. The basis on which natural gas is sold and priced varies dramatically between global markets. The deposit or reservoir is tapped and the gas free flows. Though natural gas and oil share many characteristics both are hydrocarbons, both are. If you are not engaged in oil and gas pipelines on daily basis, but would like to broaden your knowledge in the field, do purchase the book and read it. The flow of oil and gas in pipelines and pipeline systems is.
Gas gathering, compression and processing agreement sec. Regulation of midstream gas gathering companies in texas. An international perspective, a book written by the creator of this website published by pennwell publishers of oil and gas journal. Water in natural gas can create problems during transportation and processing, of which the most severe is the formation of gas hydrates or ice that may block pipelines, process equipment, and instruments. A spokesman for the department of interiors office of natural resources revenue says that over the last three decades, the government has recouped more. Natural gas pipelines, which transport more than onefourth of the energy consumed in the u. After that gas is sent to a gas plant, where the liquids are removed and sold separately. The pipeline and hazardous materials safety administration regulates both natural gas gathering pipelines and hazardous liquid gathering pipelines. Energy information administration natural gas monthly 1 highlights this issue of the natural gas monthly ngm contains state and national. What makes oil and gas royalties unique is how you calculate your income. Generally, natural gas gathering and processing providers enter into contracts with the producers of natural gas names such as. Gas from several wells is gathered through a series of small pipelines gathering lines and then the gathering lines will discharge into a larger pipeline. Guidelines for compression and gathering the attached procedure is the commissions guideline for determining the cost incurred in the gathering, compressing and treating of natural gas and casinghead gas, with instructions covering the method of reporting the costs allowed to be deducted.
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