El Paso Energy Corp. will sell its 35% stake in Oasis Pipe Line,a 1 Bcf/d line in Texas, according to a disclosure in a securitiesfiling made last week. El Paso said that the sale, which wasnegotiated in October, would result in a $20 million loss. The36-inch intrastate gas line runs 608 miles from the West Texas Wahamarket to the Katy hub outside of Houston. The pipeline provides alink between El Paso Natural Gas and Tennessee Gas Pipeline, and isthe principal route for Permian Basin supplies to access theHouston Ship Channel. Oasis completed a substantial upgrade in1998, installing 9,400 horsepower of compression, and newinterconnects to increase deliveries to eastern markets. DowHydrocarbons and Aquila Energy, a unit of Utilicorp United, alsoown stakes in the line. Along with its 35% ownership, Aquila alsohas firm transport rights on 280,000 Mcf/d. Before El Paso’s saleis complete, it still needs approvals from the Federal TradeCommission and the Texas Attorney General.

SCANA and Fayetteville Public Works Commission (PWC) reportedthey have entered into a joint agreement to build and shareownership of a natural gas-fired 500 MW power plant that willsupply electricity to Fayetteville, NC, residents and businessesbeginning during the summer of 2004. Scana also will build a106-mile gas pipeline lateral from its existing pipeline system inSouth Carolina to supply the plant. Under the agreement, The PWCwill own a 60% interest in the estimated $265 million facility,while SCANA will hold the remaining 30%. SCANA will build and ownthe projected $90 million natural gas pipeline expansion, andensures that the plant will receive 80,000 Dth/d of firm delivery.SCANA will also provide gas procurement, transportation,scheduling, power scheduling and control area services. “Thispublic/private partnership is a tremendous plus for Fayetteville’slong-term energy needs,” said Berry Gibbes, president of SouthCarolina Pipeline Corporation. “In addition, the new interstate gaspipeline project will provide a valuable second source of firmnatural gas transmission capacity into eastern North Carolina. Thiswill provide a strong incentive for future economic development inthe eastern part of the state.” SCANA plans on offering theadditional firm capacity on the 16-inch line to shippers in SouthCarolina and eastern North Carolina. For more information on firmcapacity on SCANA’s new interstate natural gas pipeline, contactDevy Traylor, manager of market and business development, at (803)217-7900.

Shell Energy will be selling gas to Georgia retail customersthrough Essential.com, according to a partnership the two companiesannounced. Essential.com already provides a one-stop shop for abroad range of energy and communications services. “Our partnershipwill increase Shell Energy’s reach to Web-savvy customers whileEssential.com provides a low cost, online customer acquisitionchannel for Shell Energy,” said Leo Desjardins, Essential.com’sdirector of business development/energy. By simply typing in a zipcode, business and residential customers can locate energy andtelecommunications offerings available in their area. In all 50states, customers have the opportunity to shop for long distanceservices, Internet access, wireless phone services and satellite TVservices. In some areas, customers also can buy power, propane,heating oil, gas and local telephone service from alternatesuppliers. Essential.com is based in Burlington, MA.

CMS Energy’s marketing subsidiary signed a long-term agreementto provide 10 Bcf of gas over 10 years to various facilities ownedby the County Commissioner’s Association of Ohio (CCAO). Theagreement includes a prepayment of an undisclosed sum to CMS-MSTfunded by bonds issued by Hamilton County, OH, and underwritten bySeasongood & Mayer LLC of Cincinnati. “This agreementillustrates a marketing arrangement that is tailored to ourcustomer’s needs,” said Tamela W. Pallas, president of CMS-MST.”The agreement gives the County Commissioner’s Association of Ohioa secure supply of natural gas for 10 years at market-basedpricing. The association, in turn, will provide the natural gas toover 30 Ohio county governments, reducing natural gas costs andsaving taxpayer money.”

Virginia Gas Co.’s shareholders approved a merger plan whichwould allow the company to fold under Bedminster, NJ-based NUICorp. as a wholly-owned subsidiary. Under the terms of the merger,NUI Corp. will acquire all of Virginia Gas’ shares of common stockfor $4.00 per share in NUI common stock. The exchange ratio will beestablished at a time more near the merger’s completion. Based onVirginia Gas’ outstanding shares, the transaction value of thecompany’s equity is placed at $22 million. “We are excited that ourshareholder vote has moved us a step closer to becoming a member ofthe NUI family of companies,” explained Michael L. Edwards,Virginia Gas’ CEO. “We are bringing together talents from our twocompanies that will create a strategically important energy assetin this region.” NUI will benefit from Virginia Gas’ significantunderground storage and pipeline facilities. The Abingdon, VA-basedcompany also focuses on natural gas exploration, production,gathering, marketing and distribution. “Virginia Gas will be key toour energy trading strategy in the mid-Atlantic markets by furtherstrengthening our natural gas trading and wholesale activities inthe region to meet the demand for natural gas and powergeneration,” said John Kean, Jr., NUI’s CEO. The union still awaitsapprovals from state regulatory agencies in Virginia, New Jerseyand North Carolina and could be completed as early as the end of2000.

The $525 million face lift started on Duke Energy NorthAmerica’s (DENA) Moss Landing power plant. “We are removing 19massive oil tanks and eight 225-foot stacks, reducing the existingplant’s air emissions and building a modern power plant to helpCalifornia meet its needs for more electricity,” said Mark Seedall,DENA director of electric modernization. The power plant site,which first produced electricity in 1950, currently generates 1,500MW. When the modernization is completed by summer 2002, the sitewill generate 2,560 MW and be the largest power plant in Californiaand one of the cleanest and most efficient power plants in thenation.

SkyGen Energy LLC, a subsidiary of Calpine Corp., will use powerfrom its Broad River Energy Center expansion project to supplyCP&L Energy’s growing customer base. Northbrook, IL-basedSkyGen developed the center before its acquisition by San Jose,CA-based Calpine earlier this month. The center, a naturalgas-fired project, is being constructed in two phases. The firstphase, which consists of three combustion turbines capable ofproducing 540 MW, began commercial operation last June. The secondphase, announced, involves installing two additional combustionturbines capable of producing an additional 350 MW. Construction ofthe second phase should be completed next summer. Production fromall five units will be sold to CP&L under long-term poweragreements. Tom D. Kilgore, president of CP&L Energy Ventures,the company’s non-regulated arm, said the addition of capacity fromunits 4 and 5 would bolster the company’s asset base in afast-growing region. “The additional capacity from Broad River,coupled with the extensive generation we’re building in theCarolinas and Georgia, will help us in continuing to meet ourretail customers’ needs, while opening up new opportunities for usin the competitive wholesale markets,” said Kilgore.

Chicago powerhouse Exelon announced new earnings targets for itsthree principal businesses, setting targets to grow at a rate ofabout 10% a year through 2003. The company projected earnings pershare of $4.50 for 2001; $4.95 in 2002; and $5.40 in 2003. Previousearnings per share had been $4.20 for 2001; $4.60 in 2002; and$5.10 in 2003. Reduced amortization, partially offset by higherspending for operations in its energy delivery business, is theprincipal driver for the earnings increase said Exelon officials.Exelon was formed in September 1999 in the merger of PECO EnergyCo. and Unicom Corp., and is one of the largest electric utilitiesand the largest nuclear operator in the United States.

The Gas Technology Institute (GTI), formed by the merger earlierthis year of GRI and the Institute of Gas Technology, released a104-page report that presents an overview of the key gas supplytrends from the 2000 GRI Baseline Projection. The 2000 Gas SupplyInsights report outlines the sources of gas supply and projectswhat each region will contribute to the anticipated 30 Tcf gasmarket of the future. The Gulf of Mexico and Western Canada areprojected to be the two largest incremental productioncontributors, followed by the Rockies. The report includes detailon the Gulf of Mexico by water depth interval for both the shelfand slope, and it includes an overview of gas supply trends inAlaska and Canada, and a summary of Mexico. John Cochener, GTIproject manager and principal analyst – resource evaluation, alsosaid GTI will release a comprehensive report soon on Mexico’s gasresources, including projections on development andimports/exports. He said a preliminary conclusion is that rapid gasdemand growth in Mexico likely will soak up Mexico’s increasing gassupply from the Burgos Basin and Cantarell area offshore. For moreinformation contact Cochener at GTI’s Baseline Center in Arlington,VA, (703) 526-7834. The report is $250 for GTI members and $325 fornonmembers, plus shipping and handling.

Denver-based Amalgamated Explorations Inc. and Barrett ResourcesCorp. have agreed to drill oil and natural gas wells in the BooneDome Gas Field area of Wyoming. Under the agreement, Barrett andits partners have the right to drill on Amalgamated leases to earnrights subject to royalty and/or working interest that will beretained by Amalgamated. Also, Amalgamated will have access to theseismic data within one mile of the leases for its own exploratoryand drilling operations. Amalgamated CEO Christian F. “Ted” Murersaid the alliance was a “positive move” that would benefitemployees and shareholders of both companies. Amalgamated recentlyacquired an additional 539 acres in the Boone field, bringing thecompany’s total land position to 1,800 acres there. The acreage iswithin a 100 square mile 3-D shoot under way with Barrett, theoperator, for exploration in the area.

Carbon Energy Corp. is selling its working interests in 40natural gas wells in the Kutz Field in San Juan County, NM toMarkWest Hydrocarbon Inc. for $7.5 million. The sale is expected toclose in early January 2001. Carbon’s net working interestproduction from the property is nearly 2.1 MMcf/d and 6 bbl/d. Itsaverage working interest is approximately 60%. Carbon plans to usethe sale’s proceeds to continue its development drilling program inthe Piceance Basin of Colorado and the Uintah Basin of Utah.

Skipping Stone Inc., based in Houston, has introduced e-Complete, an e-commerce development service for the energy industry that allows companies to establish a strategy, design an e-commerce system based upon the strategy and launch a Web site. CEO Peter Wiegand said e-Complete is available only from Skipping Stone, which is an independent energy consulting firm. See the Web site at www.skippingstone.com for more information.

MCN Energy reported a third-quarter loss of $24.9 million or$0.28 per share compared with a net loss of $23.2 million or $0.27per share, in 3Q99. Both periods were affected by unusual items, aswell as recently adopted accounting treatment of non-regulatedstorage activities. Before unusual items and costs related to thecompany’s proposed merger with DTE Energy, the loss totaled $17.4million or $0.19 per share, and compared with $19.4 million or$0.22/share in 3Q99. Gas distribution reported a third-quarteroperating and joint venture loss of $11.8 million, which includes a$9.7 million pre-tax charge related to the decision to sell itsheating, ventilation and air conditioning business, as well as $1.8million of merger-related costs. Pipelines and processing hadoperating and joint venture income of $5.4 million. Electricpower’s operating and joint venture income was $0.9 million, downfrom $6.6 million in the 1999 third quarter due to asset salesrequired to complete MCN’s pending merger with DTE. Energymarketing reported an operating and joint venture loss of $3.4million. Exploration and production had operating income of $4million. MCN’s largest subsidiary is Michigan Consolidated Gas, agas utility serving 1.2 million customers in Michigan.

Avista-STEAG LLC and NRG Energy have entered into a partnershipin the hopes of adding 633 MW of power generation to Texas’ powerpool in 2003. The partnership will build, manage and operate thenatural gas-fired Brazos Valley project to be located in Fort BendCounty, TX, about 30 miles southwest of Houston. The project, whichhas already received its major permits, will be owned byAvista-STEAG with a 51% holding, and NRG Energy with the remaining49%. Construction is scheduled to begin in the first part of 2001.”The Brazos Valley project represents an important step towardincreasing the efficiency of the ERCOT (Electric ReliabilityCouncil of Texas) generation fleet, 63% of which is between 21 and40 years of age,” said Eberhard Schmidt, president of Avista-STEAGLLC. “One estimate puts total ERCOT generation shortfall at over10,000 MW in the year 2005 at a 15% reserve margin. This projectwill help reverse that trend.”

Public power utilities are jumping into the B2B act too – morethan 225 community-owned electric utilities have committed up to$1.2 billion in purchasing power to UtilityFrontier.com, a nationalexchange launched earlier this year. The utilities will use the B2Bas a purchasing exchange to serve more than 6.7 million electricmeters – about one third of all public power customers.UtilityFrontier.com is a service of Hometown Connections, asubsidiary of the American Public Power Association (APPA) andKnowledgeA-Z, a software technology firm. It is expected to providethe marketplace with savings on all types of electric powerproducts, including transformers, poles, vehicles and conductors.It also will offer office supplies and equipment. Overall, thepublic power market share is about 14% of the $220 billion electricutility industry. One of the new members, the Los AngelesDepartment of Water & Power, plans to improve its supply chainmanagement with the new exchange. Raman Raj, assistant generalmanager of the utility, said the partnership “represents anendeavor to increase competition and drive down prices that willultimately benefit the entire public power community.” APPAExecutive Director Alan H. Richardson said the response to the B2Bhas exceeded expectations, and he said that the summer’s”dysfunctional electricity markets in California and other statesappear to have spurred public power systems to explore”opportunities. APPA, based in Washington, D.C., represents morethan 2,000 community- and state-owned electric utilities. Itlaunched Hometown Connections in 1998 to provide competitiveadvantages to public power systems.

©Copyright 2000 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.