With natural-gas prices high and supplies tight, a group of California utilities has purchased part of a prolific Wyoming gas field from Denver investor Philip Anschutz.
The Southern California companies paid $300 million to Anschutz Pinedale Corp. for 38 oil and gas wells on 1,800 acres of the Pinedale Anticline, a fast-developing natural gas field in southwest Wyoming.
The purchase – rare, but not unheard of – suggests a potential trend of utilities buying gas production to lock in supplies and prices, energy analysts said.
“The strategic nature of controlling their own gas reserves is appealing to utilities,” said Tom Petrie of Denver-based energy investment banker Petrie Parkman & Co., which handled the transaction for the Southern California Public Power Authority.
Anschutz Pinedale will continue to explore for and produce natural gas from its remaining undeveloped 8,000 acres in the Pinedale Anticline, Anschutz spokesman Jim Monaghan said.
The Pinedale field has estimated reserves of 10 trillion to 15 trillion cubic feet of natural gas, making it one of the biggest U.S. gas discoveries in the past two decades.
The wells sold by Anschutz are expected to yield an estimated 146 billion cubic feet over 30 years.
Gas from the wells will be shipped by pipeline for use in the new 310-megawatt Magnolia power plant in Burbank, Calif. The plant will supply enough electricity for about 250,000 homes.
Partners in the gas purchase include the Los Angeles Department of Water and Power and utilities in Anaheim, Glendale, Burbank, Pasadena and Colton.
“We’re trying to secure long-term stabilized supplies for our natural-gas needs,” said spokesman Mike Ebbing of Anaheim Public Utilities.
Utah utility Questar Corp. also owns a portion of its gas supplies.
In an unrelated development, an Anschutz-controlled partnership agreed to pay $455 million to Valero LP for crude oil and oil product assets, including terminals and a pipeline.
San Antonio-based Valero will sell to Pacific Energy Partners LP two fuel terminals in California, three refined-products terminals on the East Coast and a 550-mile product pipeline in the U.S. Rocky Mountains, Pacific Energy said in a statement.
Staff writer Steve Raabe can be reached at 303-820-1948 or sraabe@denverpost.com.
