Energy Transfer Equity LP (ETE) and Energy Transfer Partners LP (ETP) said ETE plans to drop down its interest in Southern Union Co. (SUG) into an ETP-controlled entity that will also include assets to be acquired in the merger of Sunoco Inc. (SUN) and ETP (see Daily GPI, May 11). Concurrent with the closing of the Sunoco merger, ETE will contribute its interest in SUG into an ETP-controlled entity in exchange for a 60% equity interest in the new entity, to be called ETP Holdco Corp. (Holdco). ETP will contribute its interest in Sunoco to Holdco and will retain a 40% equity interest in Holdco. Prior to the contribution of Sunoco to Holdco, Sunoco's interests in Sunoco Logistics Partners LP will be transferred to ETP. "Through this transaction, we resolve the timing of ETE's drop down of the SUG assets, without the need for external equity or debt financing, and will enhance distribution growth prospects at both ETE and ETP," said ETE Chairman Kelcy Warren. ETE said it has reviewed its plans with all three credit rating agencies and believes that the new structure enhances the overall credit profile of ETE, ETP and SUG, and furthers ETP's commitment to maintaining investment grade credit ratings.
Australian subsidiaries of Chevron Corp. have signed additional binding agreements with Tokyo Electric Power Co. (TEPCO) for liquefied natural gas (LNG) offtake and equity interests in the Chevron-operated Wheatstone Project. TEPCO will purchase an additional 0.4 million metric tons per year of LNG from Wheatstone for up to 20 years. And through a related company TEPCO will acquire from Chevron a 10% participating interest in the Wheatstone field licenses and an 8% interest in the Wheatstone gas processing facilities. These agreements increase TEPCO's total Wheatstone LNG offtake to 4.2 million metric tons per year, Chevron said. "More than 80% of Chevron's equity LNG from Wheatstone is covered under long-term off-take agreements with customers in Asia," said Roy Krzywosinski, managing director of Chevron Australia. Wheatstone, in Western Australia, is to be one of the country's largest resource projects, consisting of two LNG trains with a combined capacity of 8.9 million metric tons per year and a domestic gas plant (see Daily GPI, May 15).
Natural gas and power retail utility rates in Wisconsin and Colorado continued to decline in June. Xcel Energy asked Colorado regulators on Friday to lower its gas cost adjustment (GCA) by 15% in 3Q2012 compared to that same period last year, and Wisconsin Power and Light Co. received approval of its rate settlement from the state public service commission to lower its retail gas charges next year and freeze them in 2014, while freezing electricity rates for both years. Noting it is part of an economic recovery initiative for "getting the state back to work," Wisconsin regulators lauded the utility for coming up with the decrease-freeze settlement. In Colorado, Xcel also asked to decrease retail power rates by 3-5%, compared with the same period last year. The average monthly gas bill should drop under the GCA adjustment to just under $19, compared to an average bill of $22.27/month in the same quarter in 2011.
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