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Occidental unit to buy ex-naval station in Texas

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Posted on May 9, 2012 at 9:28 am by Associated Press

CORPUS CHRISTI, Texas — A unit of oil producer Occidental Petroleum Corp. has reached an $82 million deal to buy the South Texas site of former Naval Station Ingleside.

Port of Corpus Christi commissioners on Tuesday approved a contract with Oxy Ingleside Property Holdings for 815 acres.

The Corpus Christi Caller-Times reports Oxy has about 90 days to close the sale.

Spokesman Mark Evans says Oxy filed a permit application last week with Texas environmental regulators to build a fractionator at a nearby Oxy Chemicals unit. The new property would be used to help support the chemical plant’s natural gas operations and exports.

Houston-based Canyon Supply and Logistics earlier this year failed to make a $19 million down payment for 187 acres of the former naval facility, which closed in 2010.

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US shale gas unprofitable

Several US shale gas firms are cutting production because cheap prices have affected cost-effectiveness, reports say.

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Chesapeake Energy, Statoil’s east-coast Marcellus Formation partner, is axing 900 million dollars-worth of investments in comparison to last year’s 3.1 billion.

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Chesapeake Energy, Statoil’s east-coast Marcellus Formation partner, is axing 900 million dollars-worth of investments in comparison to last year’s 3.1 billion. This equates to an eight percent production cut.

Statoil press spokesperson Bård Glad Pedersen says to Dagens Næringsliv the measure is, “consistent with an industry trend over the past year to move activity from areas with dry natural gas to those with wet gas and oil. This is partly due to lower gas prices.”

Further reductions

Chesapeake, the US’ next-largest gas producer, was the first company to decrease output. It has not ruled out further reductions if prices do not move in a positive direction.

Gas prices rose 15 percent over four days following investment and production cut reports by Occidental Petroleum, ConocoPhillips and Consol Energy. The increase follows a long period of falls of 28 percent.

Nevertheless, IHS consultant Mary Barcella tells The Financial times she believes prices will be around USD 3 per million British Thermal Units (BTUs) for the rest of 2012. This is the lowest for 10 years.

US gas industry expansion since 2008 has lead to prices falling 80 percent.

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