NGI Staff Reports

The Williams Companies Thursday said its shareholders and thoseof MAPCO approved measures necessary to complete Williams’non-taxable, stock-for-stock acquisition of MAPCO. Federal TradeCommission clearance is expected in time for a first-quarterclosing. Thursday, Williams shareholders approved a charteramendment to provide sufficient common shares and authorizedWilliams’ board of directors to issue stock to MAPCO shareholders.

Add another pipeline project to the list of those that wouldmove gas eastward from the burgeoning Chicago market center.Crossroads Pipeline, in conjunction with CNG Transmission and EastOhio Gas, scheduled an open season for firm transportationbeginning Monday, March 2 and concluding April 20.

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.

Sonat Energy Services purchased a 50-percent limited partnershipinterest in GPU International’s Mid-Georgia Cogen L.P. power plant.”Our experience in both natural gas and power marketing has shownus that investing in state-of-the-art natural gas-fired electricpower generation is a key ingredient to providing our customerswith the services they need in today’s competitive market,” saidSonat Energy Service s President Richard Bates. The 300 MWcogeneration power plant is a dispatchable natural gas-fired,combined cycle facility located in Kathleen, GA. It is scheduled toenter commercial operation in the second quarter of 1998. Inaddition to providing thermal energy to a Frito-Lay snack foodprocessing plant and electrical capacity to Georgia Power, thefacility also will be available to sell wholesale energy to avariety of customers. Mid-Georgia Cogen is the first independentpower project developed in Georgia.

A delayed and abridged trading windup in the March futures contract(see details in futures and news stories) Wednesday put a large crimpin the progress of bidweek activity, sources told Daily GPI. While tosome it was just an annoying wait, others complained of having totrade in the dark. A producer said the cash market had been renderedvery quiet by the phone outages that caused Nymex to shut down theexchange temporarily. “For a while we didn’t even know whether ourorders were filled,” he said. “It’s hard to take a cash position ifyou are unsure where your hedge lies.”

Expiration days are known for their unusualness, but perhaps noother day in the history of the New York Mercantile Exchange willmatch the one turned in yesterday. The last few days of trading hadbeen relatively tame, but a telephone glitch that knocked outcommunications on the floor of the Exchange (see “Phone Lines Dead; Nymex TradingDisrupted”) at approximately 1:50 EST forced many traders intotrading at prices and volumes “that they otherwise would not havedone,” a source told GPI. As a result of the madness, the Marchcontract finally left the board at $2.286, up an even 7.0 cents forthe day.

Surprise, even shock, are common reactions to what occurs on the New York Mercantile Exchange on expiration day of a spot month gas futures contract, but yesterday many natural gas traders must have come close to suicidal trauma. Not because of price volatility, however. At about 1:50 p.m. EST, someone at the Teleport Communications Group, the telephone carrier that serves the trading floors of the New York Mercantile Exchange, pulled the plug. All commodity trading, including of course gas futures, screeched to a halt, creating a hair-raising state of panic.

Williams’ field services unit has agreed to process 300 MMcf/dof gas for Exxon Company USA at its gas liquids extraction plant tobe built near Coden, AL. The deal is the largest processingcontract to date for the field services unit. The NGL extractionplant is expected to be in service by the first quarter of nextyear and will have 600 MMcf/d of inlet capacity. The Exxon gasrepresents dedicated production from multiple leases in the MobileBay area. Remaining plant capacity will be filled through theexpansion of the Transco Mobile Bay Lateral as well as other gasproduction currently flowing on the existing Transco pipeline. Aspokeswoman said the company expects to sign five or six morecontracts to handle gas at the new plant, which is expandable up toat least 900 MMcf/d.

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.