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 (see Daily GPI, Sept. 26; andSept. 6) have put MichCon on edge aboutits own mercury clean-up efforts. The Michigan utility has voluntarilylaunched a program to ensure its mercury handling procedures are safe,effective and ensure public health. MichCon said no public healthproblems have occurred in Michigan, but recent events in Illinois havebrought the issue public attention. Nicor earlier this week announcedplans to 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 measure thepressure of gas flowing into a meter. Between 1936 and 1950, some ofthe regulators MichCon installed in customer homes containedmercury. “We believe the likelihood is extremely remote that any ofour customers have been exposed to levels of mercury from ourequipment that could cause health problems,” said Fred Shell, vicepresident of public affairs. However, MichCon did have to clean up 35homes in the 1990s in which an accidental release of mercury 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.

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