Duke/Fluor Daniel won a contract with Ingleside Cogeneration to design and build a $210 million, 440 MW natural gas-fired cogeneration power plant near Ingleside, TX. Work started in December of last year and is expected to be completed in December 1999. The new plant will be adjacent to chemical complexes owned by OxyChem and DuPont. When complete, the plant will sell up to 235 MW of electric power and 1.1 million pounds per hour of process steam to OxyChem. The balance of electricity (205 MW) will be sold into the Texas market. Ingleside Cogeneration is a project-specific partnership between OxyChem, a unit of Occidental Petroleum, and Conoco Global Power Inc. Duke/Fluor Daniel is a partnership formed in 1989 by Fluor Daniel and a unit of Duke Energy.

Coral Energy has created Coral Financial Products and Services to manage its growing financial and energy services businesses. Customers include major industrials as well as local distribution companies and electric utilities in large metropolitan areas. Services include asset and risk management, financing, energy trading and technology. “Large energy-intensive customers are looking for programs that can reduce energy costs throughout their operations,” said Jay Precourt, Coral CEO. “The formation of Coral Financial Products and Services recognizes the key strategic position that this business activity has achieved in Coral.” Coral President Lee Barba was named CEO of Coral Financial Products and Services. “We have integrated financial expertise and risk management with the physical supply and logistical skills developed through Coral’s relationship with its parent companies, Shell and Tejas.” Coral was formed in 1995 by Tejas Gas and Shell Oil. Shell Canada obtained an equity ownership position in 1997.

Consolidated Natural Gas (CNG) reported record financial results, crediting strong oil and gas production as well as continued stable performance from gas transmission and distribution. Net income in 1997 was $304.4 million, compared to $298.3 million in 1996. Record production of oil and gas, along with continued strict cost controls, were the major reasons for the higher 1997 results. These more than offset the impact of warmer weather and lower wellhead oil and gas prices, the company said. “Financially, 1997 was the best year in CNG’s 55-year history, topping the record set just the year before,” said George A. Davidson Jr., CEO. “The exploration and production operations performed superbly, contributing 26% of CNG’s pretax operating income in 1997. Our target for 1999 for this segment is $200 million in pretax operating income.” CNG gas production was 199 Bcfe in 1997, an increase of 15% from 1996. Gas production was 155 Bcf, and oil production was 7.3 million barrels. Both were the highest the company has seen since its inception in 1942. Production has increased 64% in the last two years, and CNG has targeted another double-digit increase this year. The average wellhead price for CNG gas production was $2.43/Mcf, down three cents from the year before. Gas distribution throughput was down 1% to 462.1 Bcf. Energy marketing had a pretax operating loss of $17.1 million, compared to a pretax loss of $9.1 million in 1996. This was due mainly to establishment of reserves for pipeline settlements and receivables, as well as lower gross margins and higher overhead. Energy marketing throughput was 856.4 Bcf, an increase of 429.3 Bcf from 1996.

Northern Natural Gas has asked FERC for the go-ahead to sell its remaining Hugoton pipeline and associated facilities to K N Gas Gathering. The Kansas facilities include eight compressor stations and 126 miles of pipelines with diameters ranging from four to 24 inches They are directly connected to K N’s existing gathering operations. K N said it plans to seek gathering status for the Hugoton facilities if the sale goes through. Northern Natural also sought permission to sell its non-jurisdictional Skellyton facilities, located in Texas, to Westar Transmission and American Gathering L.P. Westar will ask the Commission to declare some of the facilities to be intrastate in nature and exempt under the Natural Gas Policy Act, while American Gathering will ask that certain facilities be declared exempt gathering. The facilities, which have an estimated capacity of 45,000 Mcf/d, are located in Carson, Hansford, Hutchinson, Gray and Ochiltree counties in Texas. And Transwestern Pipeline filed an application to sell pipeline and associated facilities to K N Interstate Gas Transmission. They include 61 miles of 12-inch and 16-inch pipe near Hemphill, TX.

Mitchell Energy and Development set its fiscal 1999 capital budget at $241 million, excluding asset acquisitions, a 4% increase from the prior year. The current year’s budget includes $188 million for exploration and production, $49 million for gas services and $4 million for corporate needs. Mitchell had substantially increased its capital spending level for energy projects in fiscal 1998 – up 37% over the previous year’s spending – reflecting a renewed effort to grow its core energy businesses. “This year’s budget reinforces that commitment,” said George P. Mitchell, CEO. “A total of 183 exploratory and development wells are budgeted, compared to 176 drilled last year. Capital outlays for gas services are budgeted to increase by more than $7 million, or 18%, to $49 million in fiscal 1999. A portion of the increase will fund an expansion of Mitchell’s Seven Oaks gas processing plant in Polk County in East Texas. Additional funds also will be spent for new well connections to the Texas Chalk gas gathering system in Southeast Texas, the CandL Processors systems in Central Oklahoma and West Central Texas and the company’s Bridgeport gathering system in North Texas, where well connection costs had been funded in the past by the previous gas purchaser.

Two business units of Halliburton are starting efficiency upgrades at Occidental’s Elk Hills oil and gas operation, which OXY recently purchased from the U.S. government for $3.65 billion. Halliburton Energy Services will provide downhole production support services, and Brown and Root Energy Services will operate and maintain the gas plants, compressors and cogeneration facilities and provide field maintenance services. “We believe our business alliance with Halliburton is an important step in achieving our goal of making Elk Hills an industry model in terms of efficiency, safety and environmental sensitivity,”said Occidental Oil and Gas CEO David Hentschel.

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