CPL, Heat Energy to boost Texas production by 3.8 million barrels per day
By The Associated PressPosted Mar 25, 2018 06:51:52The state’s top utility is considering buying natural gas from a private gas company and then using the money to buy more than 3 million barrels of oil from Texas.
Energy Transfer Partners said Tuesday it has been in talks with energy companies that have offered the option to buy a majority of the energy used by the state’s electric power grid.
The company has a contract to sell the gas to Texas and will receive royalties on the sales if the contracts are approved.
The utility is looking to buy enough gas to satisfy demand during peak hours.
Energy transfer Partners spokeswoman Jessica Broughton said the company expects to get its first order from a pipeline this month.
The Texas Railroad Commission, which regulates natural gas, would also have a role in approving any transaction.
She said the state has an opportunity to become energy independent, but Energy Transfer Partners is not yet committed to making that happen.
“I think it is a really great opportunity for Texas to become a truly energy independent state,” Broughttton said.
Energy transfers main goal is to have 1 million barrels a day of gas for the grid by 2025.
It plans to use that to sell to Texas as well as to other markets, including China and Brazil.
The utility is buying the gas from the Texas Electric Reliability Corp., or TERC, a subsidiary of ExxonMobil.
It has an option to purchase the gas directly from TERC for $7.8 billion.
The transaction would require approval by the Texas Public Utility Commission.
“This will be a big step for Texas,” said John D. Miller, chairman of the Texas Commission on Environmental Quality.
The deal would also give the utility a bigger stake in the energy market and reduce costs for other utilities.
Miller said the deal also could open the way for future deals between TERC and private companies.
It would be up to the utilities board of directors to approve the transaction.
The TERC board is expected to vote on the deal Tuesday.
Texas is a net exporter of gas, making it one of the top markets for buying natural-gas from abroad.