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Industry Briefs

Industry Briefs

Senate Energy Committee Chairman Frank Murkowski (R-AK) said there will be a third mark-up session on electric competition legislation on June 7. About 30 amendments have been submitted for mark-up so far. "We will have staff work to pare down the number of amendments, and I will meet personally with Sen. [Jeff] Bingaman and staff to come to grips with the concerns." Bingaman (D-NM) is ranking minority member of the committee. Murkowski cited the extent of federal jurisdiction vs. state jurisdiction as the main difference among committee members. "Secondary issues are things like benefit funds, renewable mandates and nuclear decommissioning....." He urged committee members to come to terms with the idea of a comprehensive electric bill, adding "I'm not going to be the one who kills a comprehensive bill."

PPL Corp. announced that its development subsidiary will be spending between $400 and $450 million to install five compact, natural gas-fired generation facilities in eastern Pennsylvania totaling about 900 MW of generating capacity. The five facilities in Lancaster and Montgomery Counties are expected to go on-line by the summer of 2002. "These projects represent an environmentally sensitive and cost-effective approach to meeting the growing need for electricity in the region, especially during hot, humid weather," said William F. Hecht, PPL's chairman. "The requests to restrict the use of electricity last summer and already this spring underscore the need for additional peaking generation of this kind," he said. The compact facilities, which occupy less than an acre each, "will improve the reliability of the electrical system for surrounding communities while minimizing environmental impacts and requiring no new transmission lines," Hecht continued. Individual, pre-assembled generation units with capacities of about 45 MW each will be used. The design represents the most efficient, state-of-the-art technology for peaking generators. They operate cleanly using natural gas and a minimum amount of water to improve efficiency and to minimize air emissions.

An almost-ready-for-prime time energy trading B2B website got a boost Wednesday by entering into a long-term licensing agreement to secure software to power the system. Energy broker International Energy Partners LLC will use Cynet Interactive's ADC2000 engine to power its NRGLINE.com energy trading site, set to launch in June. Initially, NRGLINE.com will provide four interactive "trading pits" that will cover every major trading area in the continental United States including Houston, Texas City, Beaumont, New Orleans, Chicago, the Midwest, New York, Los Angeles and San Francisco. Products will including refined petroleum, refinery feed and blendstocks, natural gas liquids and commodity petrochemicals. Soon, the company plans to expand into the natural gas and crude oil markets through either a merger or strategic alliance.

Calpine Corp. announced plans to buy 36 F-class gas-fired turbines from Orlando, FL-based Siemens Westinghouse Power Corp. The agreement includes long-term service programs and performance enhancements on existing equipment. Beginning in 2003, Siemens Westinghouse will deliver 18 turbines per year to Calpine through 2004. When operated in a combined-cycle configuration, the 36 new turbines equate to approximately 9,800 MW of electricity generation potential for Calpine's development portfolio. Calpine is active in 20 states and Alberta. It currently has 17,200 MW of capacity in operation, under construction or in announced development.

Oglethorpe Power and ACES Power Marketing LLC (APM) entered into a service agreement under which APM will provide Oglethorpe with energy trading and related risk management services. The services include the establishment and maintenance of a trading control environment, negotiation and management of credit and contracts, and management of transaction execution "as agent" for Oglethorpe Power. APM will use the existing Oglethorpe energy trading staff and will add additional staff. The group will utilize existing Oglethorpe facilities in Atlanta, as well as the APM staff and software systems at its headquarters in Indianapolis. "We have been looking for an alliance which will allow Oglethorpe Power to obtain a more cost-effective control environment for our energy trading activity," said Mike Price, Oglethorpe COO. "This arrangement allows us to access the same quality services that APM already provides its existing customers and allows APM to expand its geographic presence into the Southeast."

Westcoast Energy said it was notified earlier this month that TRC Capital Corp. (TRC) made an unsolicited "mini-tender offer" for up to four million of Westcoast's outstanding common shares at a per share price of C$23.50. A 'mini-tender offer' is an offer to purchase a limited number of shares of a company's securities at below current market prices. Westcoast informed its shareholders the offer was not encouraged in any way and that the Canadian utility is not associated with it or with TRC. Westcoast said it does not approve of this practice of mini-tenders which targets less-informed investors, and in no way recommends or endorses the tender offer. According to TRC's May 15 offer, Westcoast shareholders who have already tendered their shares may withdraw them before 5 p.m. (EDT) on June 9. Westcoast's stock closed Friday at C$24.15 on the Toronto stock exchange. The company has about 115 million shares outstanding.

San Jose's Calpine Corp. has gobbled up the development rights to build, own and operate a 540 MW natural gas-fired electricity generating facility in the energy-hungry Midwest. During periods of high demand, the new Fremont Energy Center in Ohio, which is scheduled to go online in mid-2003, could generate more than 700 MW. Permitting is expected to be completed by late this summer and construction on the $340 million facility should begin this fall, said Calpine's Katherine Potter. Calpine acquired the development rights from Boston-based Buckeye Energy Projects LLC, a company managed by William J. Martin. "The Fremont Energy Center is a flagship project with respect to our entry into the East Central Area Reliability Council (ECAR) power market," said Bob Alff, Calpine senior vice president. "The project is ideally located in an area of the Midwest that is experiencing growing demand for electricity." He said Calpine, an independent power company, was reviewing several proposals to "toll the full output of the facility." Located near Toledo, Fremont Energy Center will use two advanced technology combustion turbines in combined-cycle with a single steam turbine, and will operate with natural gas and an advanced emissions control system. Calpine plans to manage all aspects of project development, including engineering and design, construction, fuel supply and power marketing. Two transmission systems owned and operated by First Energy and American Electric Power will interconnect with the project.

No bumps in the road so far for HoustonStreet.com, as traders are motoring to its newest platform to buy and sell oil products. The web-based exchange has expanded its virtual garage, and now offers crude oil and refined product trading. The expansion adds to HoustonStreet's energy markets, a cyber marketplace that has been offering trades on wholesale power and natural gas sales nationwide since last summer. In its first two days of operation, May 18 and 19, traders had already bought and sold nearly $20 million of crude and refined products across multiple hubs, products and grades. And this week's trading was riding well, too. HoustonStreet's Kim Salem said the 150 registered traders had been busy this week. "It's going really well," she said. "We've been pleased with business so far, and expect it to continue." Crude oil and refined products are just the newest area of trading in HoustonStreet's overall energy trading portfolio. The Portsmouth, NH-based company already included wholesale power and natural gas. Another new area, SpeedWay, will give users a streamlined method to trade standard electricity products through large power trading hubs. Relatively new, HoustonStreet only extended its trading coverage across the country last September (see NGI, Aug. 30, 1999).

Petroleum Place Inc. is going public. The Englewood, CO-based online marketer for the oil and gas industry last week filed notice with the Securities and Exchange Commission in an initial stock offering that would raise as much as $100 million. The company also announced it has completed its second round of financing that has raised $60 million from investors in the financial, and oil and gas industry. Net proceeds from the equity financing will be used to repay debt under its credit facilities, develop its web site and expand marketing and sales activities. No details were offered on how many shares the company plans to offer in its initial stock offering, and it also would not reveal a price range in a preliminary prospectus. These details are expected to be made in future SEC filings. It plans to seek a listing on Nasdaq under the symbol "PPLC." Launched in 1995, Petroleum Place offers several types of online services, including an oil and gas property auction exchange based in Houston, electronic data rooms and a members-only listing site for properties available on its web site. The site contains a directory of nearly 3,000 industry service providers, a database of nearly 8,000 pieces of used equipment, more than 1,000 resumes of industry professionals, and listings for more than $1 billion of proven reserves and producing properties available for sale or trade. The company auctioned about $163 million in fiscal 1999, and says it has sold or has commitments to sell nearly $273.5 million worth of property in fiscal 2000. Its next online auction is set for June 14 through its Houston office, and other sales are scheduled nearly every other month through the end of the year. (see NGI, April 24).

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