NGI The Weekly Gas Market Report

Aquila Gas Pipeline on The Auction Block

Given the lofty prices paid for midstream assets recently, San Antonio, TX-based Aquila Gas Pipeline (AQP) started testing the waters last week for a possible sale or merger. The Texas and Oklahoma gas processing and pipeline company hired Merrill Lynch &amp Co. to assist in the effort. Read More

PG&;E Signs $2 Billion Retail Gas, Power Deal

PGamp;E Corp. and Ultramar Diamond Shamrock Corp. (UDS) signed a letter of intent last week to enter into what is probably the largest energy purchasing alliance to date in the industry, representing about $2 billion in electricity, natural gas and steam purchases over a seven-year period. UDS is one of the largest independent refiners in the U.S., with seven refineries in the U.S. and Canada processing 650,000 barrels per day, 6,400 branded retail gasoline/convenience stores, and a large home heating oil business in the Northeast. Read More

Hebert: LNG Decision Is Regulatory Overkill

Although other FERC members were noticeably mum on the issue, Commissioner Curt Hebert Jr. said he was alarmed by FERC's action in a Granite State Gas Transmission case last week because it signaled a "radical departure" in its current certificate policy for evaluating whether new projects have adequate market support. Read More

Industry Briefs

Houston-based El Paso Energy will develop a 544-MW gas-fired merchant power plant in Milford, CT. in a joint venture with Power Development Company (PDC). The $225-million project is being designed to reach commercial operation at the same time Connecticut is expected to begin full retail electricity supply competition, currently estimated in the year 2000. Gas supplies are expected to come to the plant via the Iroquois gas pipeline. The partners are expected soon to announce development of a second, similar plant in CT. Most of El Paso Energy's recent power plant development has been in international markets. The partnership with PDC brings El Paso Energy back to U.S. gas-fired power plant development. A unit of El Paso Energy acquired Tenneco Energy and Tennessee Gas Pipeline Co. in 1996. Read More

Clearinghouse Prices Increase $0.23

Domestic natural gas spot market prices released by Natural Gas Clearinghouse increased $.23 in March to an average of $2.16/MMBtu, attributable to more normal weather expectations and storage injections Read More

El Paso Prepares for Stock Split, Buys Aussie Pipe

In other El Paso news not related to the Leviathan deal, El Paso stockholders approved increasing the company's authorized common shares in anticipation of a 2-for-1 stock split in the form of a 100% stock dividend. The shareholders agreed to increase the number of authorized common shares from 100 million to 275 million. The stock split will be effective on April 1, 1998 for shareholders of record on March 13, 1998. Read More

ConEd Puts Generation Plants Up for Sale

Consolidated Edison announced last week it plans to sell two-thirds of its New York City dual fuel-fired electric generation plants (5,500 MW) in an auction starting this summer as part of its ongoing electric restructuring plan, which was signed last September. About 5,050 MW of its total generating capacity is natural gas- and fuel oil-fired. The rest burns kerosene. Read More

One-Call Takes Two Steps Toward Becoming Law

One-call pipeline safety legislation moved much closer to becoming law last week as the Senate voted to add it to omnibus transportation legislation and in the House representatives Richard Hugh Baker (R-LA) and Frank Pallone (D-NJ) introduced a bill that is nearly identical to the one-call legislation already passed by the Senate. Read More

Union Pacific Completes Norcen Acquisition

Union Pacific Resources Group (UPR) last week closed on the $2.6 billion acquisition of Norcen Energy Resources, greatly increasing its production foothold in Western Canada, Latin America and the Gulf of Mexico, including some deep-water prospects. Read More

NGL Outlet Planned for New Processing Plants

Six companies are getting behind a gas liquids pipeline from Alabama and Mississippi to Louisiana fractionators. They've agreed to form Tri-States NGL Pipeline to build the pipeline from Alabama and Mississippi to Louisiana fractionators. The line will link three processing plants under construction to new and expanded fractionators on the Mississippi River. Read More