NGI Staff Reports

Westinghouse reported last week that it had just built thelargest solid-oxide fuel cell (SOFC) generating system for a Dutchenergy distribution utility. The system, which runs on natural gas,is delivering 106 KW to the electric grid plus 80 KW of thermalpower to the area’s district heating system, according to thecompany. The unit is the first to integrate a natural gas reformerwithin the SOFC stack.

ONEOK Resources has signed a definitive agreement with OXY USAto purchase some of its natural gas and oil reserves including morethan 400 wells in Oklahoma and Kansas outside the Hugoton field forapproximately $135 million before adjustments. Net production isapproximately 30 MMcf/d and 400 b/d. The properties havelower-risk development potential for increased reserves. WhileONEOK’s previous reserve acquisitions have been concentrated inOklahoma, this purchase includes significant reserves in Kansaswhere ONEOK recently acquired Kansas Gas Service, an LDC servingtwo-thirds of the state. David Kyle, president and chief operatingofficer of ONEOK, Inc., said the acquisition will almost doubleONEOK’s oil and gas reserve base. The acquisition includes a gassweetening plant located in the Aledo Field in Oklahoma.

Florida Gas Transmission said Thursday it was experiencing”extremely high” linepack and that Operational Flow Orders would beissued to customers taking less than scheduled volumes. Otheroperational tools such as an Alert Day notice were also beingconsidered, the pipeline said.

Williams Field Services has snagged a big fish for its large newMobile Bay processing plant, signing up to process 300 MMcf/d ofgas for Exxon Company USA. The deal is the largest processingcontract to date for Williams. The NGL extraction plant to be builtnear Coden, AL is expected to be in service by the first quarter ofnext year and will have 600 MMcf/d of inlet capacity.

Deep-water gas from the Gulf of Mexico has begun moving ashore,but without the pressure of a cold winter or the incentive of highprices the gas stream so far has been little more than a trickle.Two projects, Discovery Gas Transmission and Nautilus Pipeline,have begun some deliveries and a third, the extension of DauphinIsland Gathering System (DIGS), is expected to start up this month.

Electricity buyers with multiple facilities are eager toconsolidate power buying activities from myriad suppliers to just ahandful when competition comes, according to a recent survey.

The American Gas Association’s “shrewd” new President and CEODavid N. Parker has discovered a period of calm, but continuedstreamlining is the best thing right now to keep AGA in goodstanding with its members. In an interview with NGI last week,Parker said he has made a commitment to the AGA board to furtherreduce expenses and hold down membership dues.

The unfolding controversy over the contracts giving Natural GasClearinghouse (NGC) a large bite of the westbound transportationcapacity on El Paso Natural Gas – capacity that was destined to beturned back to the pipeline at the end of last year – is expectedto take center stage at FERC this week. Marketers and producers saythey plan to make a case that the contracts are anticompetitive andcontain illegal negotiated terms and conditions, and are at faultfor the run-up in transportation rates on El Paso’s system to theCalifornia border.

California State University (CSU) and the University ofCalifornia (UC) signed up with Enron Energy Services (EES) forpower to serve all 22 CSI campuses and all nine UC campuses andother facilities. The deal is the largest direct-access electricenergy contract in the country, Enron said. The two institutionsare projected to save more than $15 million over the next fouryears. “It will be hard to top this,” an Enron spokesman said ofthe deal. “They are the largest public institutions even in thestate of California.” Before this deal, Enron’s largest Californiapower deal was the recently announced pact with Pacific Telesis,worth $280 million over four years to service 8,000 Californiafacilities.