Aquila Gas Pipeline might be taken off the auction block inlight of depressed gas liquids prices and the fear a sale pricewon’t do justice to the company’s value. Indeed, the company’ssecond quarter results were something less than stellar. Net incomewas $1.4 million, down from $7 million in the second quarter of1997. This despite the fact gas throughput and marketed volumesaveraged a record 1.4 Bcf/d, compared to 1.2 Bcf/d in the secondquarter of last year. However, total system throughput was 446MMcf/d, compared to 534 MMcf/d in the second quarter of 1997. Anincrease in gas volumes marketed off system to 954 MMcf/d from 642MMcf/d in the second quarter of 1997 reflects the continuedincreased emphasis on marketing activities. Liquids productiondecreased to 25,000 barrels/d from 38,000 barrels/d 2Q 1997. Lowliquids prices were the reason for the decline.

The San Antonio, TX-based company said in March its sale waspossible (see weekly NGI, March 16, 1998). “We are still in theprocess of reviewing strategic alternatives and hope to concludethis process in August,” said CEO Joe Becraft. “The recent downturnin the NGL market has made it a difficult process. If we are notultimately successful in finding other strategic alternatives, wewill redouble our focus on continuing to operate the company.”Thepipeline is 82% owned by Aquila Energy, a UtiliCorp Unitedsubsidiary.

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