NGI Staff Reports

Alliance Pipeline Project enlisted its fourth partner from the United States-and became majority-owned by gas pipeline companies and marketers-when Duke Energy Corp. bought a 9.8% interest. But in announcing Duke’s arrival, Alliance president Dennis Cornelson and vice-president Jack Crawford said the project retains its character as an initiative inspired and developed by Canadian gas producers, as a competitive new route to American markets. Crawford added a half-joking thank you to the Canadian pipeline establishment, saying it has “catalysed” the recruitment of new partners by calling attention to it and taking it seriously with noisy opposition on both sides of the border.

Following a year in which allegations of affiliate-abuse violations topped the headlines, FERC disclosed it is developing plans to audit as many as 10 pipelines this year to determine whether they are complying with the standards of conduct that place limits on the extent of their dealings with marketing affiliates.

Southern California Gas has put one of its five storage fields up for sale, saying the continued excess transportation capacity into California has reduced its need for storage. In fact, the West Montebello Underground Storage Facility with 9 Bcf working capacity for the most part has been idle for the last year.

Columbia Gas of Ohio announced its customers will see a drop ofnearly 11% in their natural gas bills beginning in February, as itpasses along savings because of lower gas market prices. Columbiafiled with the Public Utilities Commission of Ohio (PUCO) to reduceits gas cost recovery (GCR) rate by about 76 cents/Mcf, effectiveJan. 30 through April 30. For the typical residential customerusing 10,000 cubic feet of gas a month, the monthly bill willdecrease by $7.57, from the current average of $69.67 to $62.10.

Natural Gas Pipeline Company of America’s (NGPL) proposal to set aside turned-back capacity from U.S. long-haul shippers for Canadian customers as an alternative to building a major portion of its already-certificated Amarillo Line expansion has drawn howls of protest from Southwest producers and shippers.

With purchases last week of the Ozark Pipeline from NGC for $55 million and a majority interest in the NOARK Pipeline system from Prudential Insurance and a SEMCO Energy subsidiary for $30 million, Enogex Inc. collected the components of a new interstate natural gas pipeline system that will traverse Oklahoma and Arkansas. Enogex, a subsidiary of Oklahoma City-based OGE Energy, operates a 3,400-mile intrastate pipeline system in Oklahoma, which will provide some of the upstream supply access for the new system.

El Paso Energy reported the $35 million Samalayuca Pipeline, thefirst privately owned gas pipeline in Mexico, started operationslate last month and is flowing about 70 MMcf/d of gas from the U.S.border near El Paso to the Samalayuca I gas-fired power plant inNorthern Mexico and to consumers in the state of Chihuahua. The45-mile pipeline project, which includes 22 miles of pipe in theU.S. and 23 miles of pipe in Mexico, has a capacity of 212 MMcf/d.It is owned by a 50/50 partnership of El Paso affiliates and PemexGas Y Petroquimica Basica.

Chesapeake Energy announced two new acquisitions for a total of $88 million and 107 Bcfe of proven reserves and future drilling opportunities, with the largest deal targeting potentially higher value Canadian resources.

The recent protests of El Paso Natural Gas shippers regarding Natural Gas Clearinghouse’s much tighter grip on westbound firm transportation capacity (1.3 Bcf/d) are just the cries of industry fat cats who would rather avoid increased competition on what they consider their home turf, El Paso told FERC last week (please see stories in NGI 1-12-98, p.1 and 11-10-97, p.1).