Tennessee Gas Pipeline Co. has begun a non-binding open season through August 11 to assess market interest in additional firm capacity, which would be created by its proposed Freedom Trail expansion project. The project is scheduled to begin service in 2006. The proposed project is designed to increase mainline capacity on Tennessee’s Line 200 located in New York and Massachusetts by 50,000 to 150,000 Dth/d, with up to an additional 40,000 horsepower of compression and up to 40 miles of new pipeline looped along existing right of way. Freedom Trail would enable customers in the Northeast to access various supply points along Tennessee’s system including market and supply area storage, the Gulf of Mexico (Zones 0 and 1), and the Niagara Interconnect with TransCanada Pipeline. The incremental capacity would provide service to New England as well as New York City and/or Long Island via deliveries to existing and proposed downstream pipelines directly serving these markets. To obtain open season request forms and guidelines, contact Jim Scabareti at (617) 217-2115 or at jim.scabareti@elpaso.com.

Natural Gas Pipeline Company of America (NGPL) has reached an agreement with We Energies to extend all of the company’s existing firm transportation contracts. The Kinder Morgan subsidiary initially will provide up to 111,000 MMBtu/d of annual firm natural gas transportation service and 19,133 MMBtu/d of firm seasonal transportation service. The new agreements continue through March 31, 2008, and replace contracts that were scheduled to expire by March 2004. In addition to the transportation agreements, We Energies also has contracted with NGPL for an additional 2.25 Bcf of firm storage service. The new storage agreements, which took effect last April, represent an 86% increase over existing firm storage capacity, and will continue primarily through March 2008.

Illinois Power Co. (IP) has notified Trans-Elect Inc. that it had exercised its right to terminate the sale of its transmission system assets. The $239 million transaction by the Dynegy Inc. subsidiary had been set to close July 7 IP filed a Form 8-K with the Securities and Exchange Commission on Wednesday indicating that it had notified Trans-Elect of the sale agreement’s termination. Trans-Elect, an independent transmission company headquartered in Reston, VA, did not commented on the agreement’s cancellation. The deal has been considered unlikely after Dynegy CEO Bruce Williamson indicated during a quarterly earnings conference call in April that the transaction was doubtful (see NGI, May 5). Dynegy had put the transmission assets up for sale last year when it was having liquidity problems. Since then, however, the company has extended its credit facilities and is restructuring. The IP assets still could be sold to Trans-Elect or another buyer. A Dynegy spokesman said the company would “continue to evaluate our options with respect to the transmission system.” The IP facilities that were to be sold included approximately 1,700 miles of 345,000 volt and 138,000 volt transmission lines, 20 transmission substations and the transmission assets within an additional 40 substations.

Houston-based independent Swift Energy Co. has increased its 2003 capital budget by 15%, or $20 million, to accommodate additional development drilling, facility upgrades and initial 3-D seismic work in fields located in Louisiana and New Zealand. The new $150 million budget will give Swift more capital for its Lake Washington Field located in Plaquemines Parish, LA, as well as allow additional drilling and exploitation activity in New Zealand. The increase, said the company, is supported by recent operational successes and higher than anticipated cash flow in 2003, both domestically and in New Zealand. Swift reported that production from its interests in the Lake Washington Field averaged more than 8,500 gross (7,000 net) boe/d in June. The budget increase will be used in part to increase the facility capacity at Lake Washington to approximately 20,000 gross boe/d. Facility upgrades also are on schedule and are expected to be completed during the fourth quarter. The increased capital budget also enables Swift to drill between 60 and 70 wells in Lake Washington during 2003, or approximately 10 more wells than previously reported. Swift also is considering shooting 3-D seismic over a portion of the field.

San Diego-based Sempra Energy and PG&E Corp.’s National Energy Group (NEG) once again extended an open season on capacity on the 500 MMcf/d, 220-mile North Baja natural gas transmission pipeline. The open season previously was scheduled to end last month but has been extended to the end of July. The open season was extended to gauge shipper interest in moving liquefied natural gas (LNG) supplies (re-gasified) from proposed receiving terminals on the Pacific Coast of Baja California Norte. Sempra has one of the LNG proposals before Mexican regulatory authorities, and apparently the regulators want to make sure a level playing field continues in the competition for building LNG receiving facilities, an NEG spokesperson said. NEG operates the 80 miles of the pipeline in the United States from the Arizona-California border southerly into North Baja where the operation is picked up in Mexico by Sempra and its Mexican partner. Sempra is still awaiting approvals for its LNG facility from the Mexican federal energy regulatory agency that is similar to the U.S.Federal Energy Regulatory Commission.

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