Alliance Pipeline said it received notice from both the NationalEnergy Board (NEB) and the Federal Energy Regulatory Commission(FERC) that its tariffs have been accepted as filed. Alliancecurrently expects that its in-service date will be Oct. 30. “OnOct. 9 we plan to begin operation of the electronic systems whichimplement the various business procedures outlined in the tariffs.At that time, Alliance will facilitate capacity release andassignment transactions for our shippers, with full nominationprocedures being implemented on our in-service date,” said JackCrawford, vice president of public, government and regulatoryaffairs. Alliance is designed to deliver 1.325 Bcf/d of gas fromthe gas producing regions of northeastern British Columbia andnorthwestern Alberta to the Chicago, IL, area where itinterconnects with the North American pipeline grid.

Five former energy trading executives from Avista Energy andVitol Gas & Electric have formed Derigen Consulting to offerthe energy trading industry “expert level consulting and softwaredevelopment Services.” Heading up the firm is Jeffrey MacInnis,formerly the CIO for Avista Energy. Other founding members includePeter Siciliano, previously Avista’s vice president/controller;Robert Jacobs, formerly he was the position manager for Avista andhead gas trader for Vitol; Michael Mudge, former senior oracle DBAand project manager with Avista; and Suzanne Carroll, who used tobe the director of contracts administration for Vitol Gas &Electric. “We formed Derigen in order to offer the energy tradingindustry management services that provide the same stable andtrusted policies that we developed to navigate Vitol Gas &Electric,” said Jacobs, vice president consulting services. Tolearn more about Derigen, visit its web site at www.derigen.com.

Austin, TX-based Southern Union Co. completed its mergers withProvidence Energy Corp. and Fall River Gas Co. It completed itsmerger with Valley Resources Inc. on Sept. 20. The three mergers,which first became public a year ago, increase the company’s NewEngland division to nearly 300,000 customers. Providence Energyshareholders will receive $42.50 cash for each share of commonstock they own, while Fall River Gas customers will receive theequivalent of $23.50 per common share in cash and/or Southern unioncommon stock. Southern Union now serves nearly 1.6 millioncustomers in Texas, Missouri, Pennsylvania, Rhode Island,Massachusetts, Florida and Mexico. Its natural gas operatingdivisions include Southern Union Gas, Missouri Gas energy, PGEnergy, Atlantic Utilities and the New England division.

OGE Energy Corp. subsidiary Enogex Inc., announced plans toexpand its Harrah Gas Processing Plant in eastern Oklahoma County,doubling the plant’s capacity to 38 MMcf/d. The expansion at Harrahis expected to be complete and in service by January 2001. The idleBurns Flat processing plant, acquired by Enogex in 1999 through itsacquisition of Transok LLC, will be moved from its present locationin western Oklahoma to the existing Harrah plant site. Theexpansion will be accomplished in large part by the relocation ofthe plant. Plans also call for some associated pipeline expansionon the Enogex system to accommodate the additional volumes ofnatural gas. “We continue to find ways to maximize the value of theTransok acquisition,” said Enogex President Roger A. Farrell.”Moving this idle Transok asset to a location on the Enogex systemwhere volumes have grown significantly over the last 18 months isanother example of that ongoing effort.”

El Paso Merchant Energy and PSE&G announced therestructuring of a long-term power sales agreement between theutility and the Newark Bay generating project. The New Jersey Boardof Public Utilities (BPU) has approved the agreement. The NewarkBay project is a 135 MW gas-fired cogeneration facility managed byEl Paso and located in Newark. PSE&G is required by law to buythe plants power and has been under a long-term agreement at pricesthat are now often above market. Under the new agreement, El Pasowill supply a fixed amount of electricity to PSE&G at reducedrates. PSE&G expects that the new agreement will save itscustomers $75 million over the remaining 13-year term of theagreement. El Paso Merchant Energy will be able to minimize thecosts associated with servicing the agreement, and obtain greaterflexibility in supplying energy to PSE&G under the contract, bypotentially delivering power from alternative sources.

Nicor’s recent environmental problems with old gas regulators inIllinois have put MichCon on edge about its own mercury clean-upefforts. The Michigan utility has voluntarily launched a program toensure its mercury handling procedures are safe, effective andensure public health. MichCon said no public health problems haveoccurred in Michigan, but recent events in Illinois have broughtthe issue public attention. Nicor earlier this week announced plansto inspect 248,000 homes for possible mercury contamination frommishandled gas regulators following a court order and monitoring bythe EPA. Mercury once was used in gas regulators to help measurethe pressure of gas flowing into a meter. Between 1936 and 1950,some of the regulators MichCon installed in customer homescontained mercury. “We believe the likelihood is extremely remotethat any of our customers have been exposed to levels of mercuryfrom our equipment that could cause health problems,” said FredShell, vice president of public affairs. However, MichCon did haveto clean up 35 homes in the 1990s in which an accidental release ofmercury occurred.

TransCanada PipeLines said it is selling Cancarb Limited(Cancarb) and an associated power plant to Sid Richardson CarbonCo. for $160 million, including working capital. The sale isexpected to close by the end of this year, pending necessaryconsents and approvals. Located in Medicine Hat, AB, Cancarbproduces thermal carbon black, a specialty grade of carbon blackused in industrial applications. The associated power plant is inthe final stages of construction and is expected to have generatingcapacity of 45 MW.

Quicksilver Resources said it bought substantially all of thenatural gas assets that make up Dominion Reserves-Indiana Inc.’sCorydon Project in Harrison County, IN, and Meade County, KY. Theassets include 22 producing gas wells and corresponding gatheringsystems, 50% interest in more than 20,000 undeveloped leaseholdacres and 80% of the GTG Pipeline, an eight-mile, 12-inch diametergas transmission pipeline running from southern Indiana to northernKentucky. Dominion owns a 95% interest in the producing propertieswith the remainder belonging to Mercury Exploration, the operatorand an entity controlled by Quicksilver’s primary shareholders.Quicksilver will take over the operations from Mercury and expectsto close on the purchase of Mercury’s interest during the next fewweeks. The Corydon Project presently produces 2 MMcf/d from the NewAlbany Shale formation.

Global Industries Offshore LLC, a subsidiary of GlobalIndustries Ltd., has installed seven miles of 14-inch diameter pipefor Unocal Corp. to support natural gas production from the Munidevelopment in Ship Shoal block 295 offshore Louisiana. Global,headquartered in Carlyss, LA, also provided tie-in services, andcompleted the testing and commissioning of the pipeline in August.Global used the pipelay/derrick barge Iroquois to lay the pipe in240-foot depths between the Ship Shoal 295 “A” platform and asubsea tie-in location at Eugene Island block 302.

BP said it has found the largest gas field to date offshoreTrinidad and Tobago, which has become a major source of liquefiednatural gas for the U.S. market. BP’s initial well on the Red Mangofield, located 35 miles east of Galeota Point, indicated 3 Tcf ofgas reserves and about 90 million bbl of condensate. It’s BP’ssecond major gas find in the area this year. The company said itwould shortly begin appraisal work to define the exact size of thefind. BP also reiterated its strong drive to grow its NorthAmerican gas position, as part of a three-year target – firstoutlined in July – to grow worldwide gas production by 8-10% peryear. It plans to spend $1.5 billion/year to find and develop NorthAmerican gas. Its overall exploration and production spending inthe U.S. and Canada over the next three to four years is expectedto total $3 billion a year.

Northern Border Partners, LP, announced it has completed itspreviously announced acquisition of gas gathering facilities in thePowder River and Wind River Basins in Wyoming for $200 million fromEnron North America Corp. The purchase includes ownership positionsin Bighorn Gas Gathering and Fort Union Gas Gathering in the PowderRiver Basin and Lost Creek Gathering in the Wind River Basin. Inconjunction with the acquisition, NBP and ENA have agreed toprovide complementary services in the Basins. NBP will own andoperate physical assets and will provide gathering andtransportation services. ENA will continue to provide gas purchaseand sales, finance, risk management and producer outsourcingservices. The partnership also declared an increase in cashdistribution yesterday to $0.70 from $0.65 per unit. The indicatedannual rate is now $2.80 per unit. The increase becomes effectivewith the third quarter distribution payable on Nov. 14. It is thepartnership’s fourth increase in the last three years. NorthernBorder Partners, LP owns a 70% general partner interest in NorthernBorder Pipeline Co., which owns a 1,214-mile interstate pipelinesystem that transports approximately 23 percent of all Canadiannatural gas imports into the United States.

Nicor Gas reported that a total of 248,000 homes will beinspected for possible mercury contamination from mishandled gasregulators. The company announced plans last month to voluntarilyinspect the homes and then came under state and federal regulatoryinvestigation. It came under court order to inspect the homesearlier this month. To date, nearly 27,000 homes have been visited.Nicor’s plan calls for an initial visit to all of the homes bymid-November. The company’s field inspectors are conducting severalthousand residential visits per day. As more people are trained andcertified, the number of inspections will increase. Nicor Gas hascontacted all 15,000 customers that potentially had old stylemercury regulators removed between 1995 and 2000. This is thecompany’s first phase of its work plan submitted to the Office ofthe Illinois Attorney General. Nicor Gas has sent letters to allcustomers in the second phase of its plan. This includes allresidences that have had mercury regulators removed between 1990and 1994. This is the primary focus of field visits beginning Sept.25.

BP is funding a 10-year, $20 million research grant to study howto catalytically convert methane, sharing the grant equally betweenthe California Institute of Technology and the University ofCalifornia, Berkeley. The grants from BP will study how to convertthe large reserves of natural gas found in methane into usefulproducts. The funding will support faculty, research staff,graduate students and fellows at the two universities, andinformation will also be shared. UC Berkeley will focus onheterogeneous catalytic approaches for producing liquid fuels andchemicals. The Caltech team will develop homogeneous catalyticapproaches. BP set up a similar program at England’s CambridgeUniversity. Sir John Browne, group chief executive of BP, said thatthe “next breakthrough” in natural gas to liquids research “willcome from catalysis combined with process engineering,” toward thenext generation of cleaner burning fuels.

FERC issued a favorable environmental assessment on Central NewYork Oil & Gas Co.’s (CNYOG) Stagecoach Natural Gas StorageFacility, which is to be located near Binghamton, NY. CNYOG, anaffiliate of eCORP LLC, filed its application for the project lastNovember. It is proposing to construct a storage facility with upto 13.6 Bcf of working capacity, 250 MMcf/d of injection capacityand 500 MMcf/d of deliverability. Tennessee Gas Pipeline filed withFERC in January to expand its 300-Line to connect with Stagecoach.The $86.5 million pipeline expansion is expected to be approved inDecember and in place when the storage field begins operation Aug.1, 2001. The 30-inch lateral would have a capacity of 500,000Dth/d, and expansion capabilities of up to 1 Bcf/d. “We believethese projects, taken together, represent one of the best availableoptions to significantly enhance and reinforce natural gas deliveryinfrastructure in the northeastern United States, an area of thecountry very much in need of relief in terms of such energyresources,” said eCORP CEO John F. Thrash.

Atlanta-based Southern Co. upped its service agreements withGeneral Electric Co. to more than $1 billion last week aftersigning a multi-year service agreement with its GE Power Systemsunit for $575 million for its new combined-cycle power plants. Thecontracts, which are staggered for commercial projects scheduledbetween 2001 and 2004, will cover the facilities being built bySouthern affiliates in the southeastern part of the United States.So far, two GE combined-cycle systems have been officiallyannounced: the Wansley Power Station in Roopville, GA and the GoatRock Power Station in Smith, AL. Several other plants also will bebuilt, according to Southern. The GE service agreements support thecompany’s 7FA gas turbine-generators, GE D11 steam turbines, Mark VSpeedtronic control systems and other auxiliary equipment. Ordersor commitments to supply the equipment were obtained by GE in thepast year. Between 1998 and 1999, GE and Southern put togetherseveral other service agreements valued at $450 million for fivenew power plants. The contracts, said officials, are based on theconcept of shared goals for the two companies, with both equallycommitted to the “continuous improvement of plant performance overthe life of the contracts.”

Atlanta-based power marketer Southern Energy Inc. raised theestimated price range of its initial public offering last week, andexpects net proceeds from the deal to reach $1.05 billion – 19%more than the previously expected $884 million in net proceeds. Itsprice rose nearly $3, to $18 to $20 per share from $15 to $17 pershare. The Southern Co. spinoff, with target markets in NorthAmerica, Europe and the Asia-Pacific region, has received approvalfor a New York Stock Exchange listing under the symbol “SOE.” Itwill still offer 58 million common shares in the $15 to $17 pershare range, as well as offer six million convertible trustpreferred securities that could net $290 million more, according toan amended prospectus filed with the U.S. Securities and ExchangeCommission. When the IPO is completed, the company would have 330million common shares of stock outstanding, with 272 million heldby Southern Co. With a median price of $19 a share, Southern Energywould have an initial market capitalization of $6.27 billion.Southern Co. plans to spin off the marketer within a year followingthe IPO by distributing the remaining shares of common stock toSouthern Co.’s common stock shareholders. A portion of the moneyraised will be used to repay nearly $839 million in short-termdebt, and the remainder will be used for general corporatepurposes. Goldman Sachs and Morgan Stanley Dean Witter are the leadmanagers. Banc of America Securities, Credit Suisse First Boston,J.P. Morgan, Lehman Brothers and Salomon Smith Barney areassisting. They have an option to buy 8.7 million additional sharesif the 58 million shares first offered are oversubscribed.

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