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Industry Briefs

Industry Briefs

New Century Energies and Northern States Power said they have filed, or are expected to file later this week, merger applications with state regulators in Colorado, Wyoming, Minnesota, Texas, New Mexico, Kansas and North Dakota and with FERC. Other filings with additional state and federal regulators will follow. NCE and NSP shareholders approved the merger on June 28. The proposed combination, to be called Xcel Energy, will serve three million electricity customers and 1.5 million natural gas customers in 12 states.

ARCO and Syntroleum announced completion and the successful start up of their Natural Gas-to-Liquids (GTL) pilot plant. Located at ARCO's Cherry Point Refinery near Bellingham, WA, the 70-barrel per day pilot plant has achieved initial operating targets and is proceeding with the evaluation program. The pilot plant is testing new reactor designs and high performance Fischer-Tropsch catalyst for the Syntroleum Process, a proprietary process for converting natural gas into synthetic fuels and hydrocarbon-based specialty chemicals. Tulsa-based Syntroleum Corp. licenses its proprietary process for converting natural gas into synthetic crude oil and transportation fuels. The process is designed to apply in plant sizes ranging from 2,000 barrels per day to more than 100,000 barrels per day. Besides ARCO, current licensees include Enron, Kerr-McGee, Marathon, Texaco and YPF.

The Massachusetts Department of Telecommunications and Energy approved a rate plan associated with the merger of BECEnergy and ComEnergy Systems, and their subsidiaries, Cambridge Electric and Commonwealth Gas. The rate plan includes a four-year distribution rate freeze and a schedule for recovery of all merger-related costs, including an acquisition premium. The DTE found that the companies demonstrated sufficient savings to offset the merger costs. "This is another in a series of mergers that is reshaping the industry," said DTE Chair Janet Gail Besser. "Having sold their power plants, it makes sense for these utilities to combine their distribution resources. [It] will allow these utilities to operate more efficiently and, in turn, improve rates and service quality in the region." The merger will create a new holding company called Nstar, though Boston Edison, Commonwealth Electric, Cambridge Electric Light and Commonwealth Gas will continue to be the operational entities.

Kinder Morgan Energy Partners, L.P. has agreed to sell its 25% interest in a 210,000 barrel/d natural gas liquids (NGL) fractionation facility in Mont Belvieu, TX to Enterprise Products Partners LP for $45 million. "Our interest in the fractionation facility was passive, and since Kinder Morgan does not trade NGLs and seeks to avoid commodity risk, the facility was not a good fit for our asset portfolio," said CEO Richard Kinder. "We plan to redeploy the proceeds of this sale into our core fee-based pipeline and terminal businesses. The results of this transaction will be accretive in earnings and cash flow to Kinder Morgan and its unitholders."

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