Industry Briefs

El Paso Merchant Energy and PSE&G announced the restructuring of a long-term power sales agreement between the utility and the Newark Bay generating project. The New Jersey Board of Public Utilities (BPU) has approved the agreement. The Newark Bay project is a 135 Mw gas-fired cogeneration facility managed by El Paso and located in Newark. PSE&G is required by law to buy the plants power and has been under a long-term agreement at prices that are now often above market. Under the new agreement, El Paso will supply a fixed amount of electricity to PSE&G at reduced rates. PSE&G expects that the new agreement will save its customers $75 million over the remaining 13-year term of the agreement. El Paso Merchant Energy will be able to minimize the costs associated with servicing the agreement, and obtain greater flexibility in supplying energy to PSE&G under the contract, by potentially delivering power from alternative sources.

Nicor's recent environmental problems with old gas regulators in Illinois (see Daily GPI, Sept. 26; and Sept. 6) have put MichCon on edge about its own mercury clean-up efforts. The Michigan utility has voluntarily launched a program to ensure its mercury handling procedures are safe, effective and ensure public health. MichCon said no public health problems have occurred in Michigan, but recent events in Illinois have brought the issue public attention. Nicor earlier this week announced plans to inspect 248,000 homes for possible mercury contamination from mishandled gas regulators following a court order and monitoring by the EPA. Mercury once was used in gas regulators to help measure the pressure of gas flowing into a meter. Between 1936 and 1950, some of the regulators MichCon installed in customer homes contained mercury. "We believe the likelihood is extremely remote that any of our customers have been exposed to levels of mercury from our equipment that could cause health problems," said Fred Shell, vice president of public affairs. However, MichCon did have to clean up 35 homes 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 Carbon Co. for $160 million, including working capital. The sale is expected to close by the end of this year, pending necessary consents and approvals. Located in Medicine Hat, AB, Cancarb produces thermal carbon black, a specialty grade of carbon black used in industrial applications. The associated power plant is in the final stages of construction and is expected to have generating capacity of 45 MW.

Quicksilver Resources said it bought substantially all of the natural gas assets that make up Dominion Reserves-Indiana Inc.'s Corydon Project in Harrison County, IN, and Meade County, KY. The assets include 22 producing gas wells and corresponding gathering systems, 50% interest in more than 20,000 undeveloped leasehold acres and 80% of the GTG Pipeline, an eight-mile, 12-inch diameter gas transmission pipeline running from southern Indiana to northern Kentucky. Dominion owns a 95% interest in the producing properties with the remainder belonging to Mercury Exploration, the operator and an entity controlled by Quicksilver's primary shareholders. Quicksilver will take over the operations from Mercury and expects to close on the purchase of Mercury's interest during the next few weeks. The Corydon Project presently produces 2 MMcf/d from the New Albany Shale formation.

Global Industries Offshore LLC, a subsidiary of Global Industries Ltd., has installed seven miles of 14-inch diameter pipe for Unocal Corp. to support natural gas production from the Muni development in Ship Shoal block 295 offshore Louisiana. Global, headquartered in Carlyss, LA, also provided tie-in services, and completed the testing and commissioning of the pipeline in August. Global used the pipelay/derrick barge Iroquois to lay the pipe in 240-foot depths between the Ship Shoal 295 "A" platform and a subsea tie-in location at Eugene Island block 302.

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