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Dallas-based TXU has begun soliciting bids to sell about 250miles of a remote intrastate pipeline and distribution system inTexas in an effort to prune down some of its less critical assets.The system, inherited by TXU when then-Texas Utilities merged withLone Star Gas parent Enserch in 1997, runs through the West TexasPanhandle area, through an unincorporated region covering eightcounties. TXU’s Carol Peters said the company already has gotteninquiries about the short pipeline. “The sale is part of a trimmingdown process,” Peters said. “The company found that the pipelinewas not strategic to its critical assets in TXU’s long-term plan toremain competitive in the energy industry.” Peters said she did notknow if any other pipelines in the state would be sold, but saidreviews were an “ongoing process,” with TXU constantly reviewingall of its assets to ensure they contribute to earnings. “We alwayswant to make sure that all of our assets fit with where we’re goingas a company.” Most of the pipeline system consists of 12- and10-inch mainlines and smaller distribution lines through Coke,Coleman, Concho, Edwards, Runnels, Schleicher, Sutton and Tom Greencounties in the San Angelo area. TXU operates two natural gaspipeline systems across the state, consisting of TXU Lone StarPipeline, TXU Fuel Co. and TXU Processing Co. TXU Lone Star is theTexas intrastate pipeline that connects three major Texas marketcenters at Waha, Carthage and Katy. The pipeline system expected togo up for sale does not overlap with any of TXU’s electric serviceterritory in Texas.
The New York Mercantile Exchange on Tuesday announced Sept. 15as the launch date for its electricity futures contract based ondelivery in the Mid-Columbia River region. The contract will begintrading 4 p.m. EST Sept. 14.This contract will be tradedelectronically along with the other electricity contracts on theNymex ACCESSr system, with the session beginning at 7 p.m. onSundays and 4 p.m. on Mondays through Thursdays, and ending at 2:30p.m. Mondays through Fridays. Other than delivery location, thecontract will reflect the terms of Nymex’s California/Oregon borderand Palo Verde electricity futures contracts. It will have a unitsize of 432 MWh of firm electricity, and a delivery rate of 1 MWper hour, with the size of the actual delivery varying according tothe number of on-peak days during the delivery month. Other termsand conditions paralleling those in all of Nymex’s existingelectricity futures contracts include: trading in the deliverymonth would cease on the fourth business day prior to the first dayof the delivery month; and prices will be quoted in dollars andcents per MWh (minimum price fluctuation will be $0.01 per MWh;there is no maximum price fluctuation).
The Southern Ute Indian Tribe which recently purchased theColorado Dry System in La Plata County, CO from El Paso FieldServices, has now sold it to Red Cedar Gathering Company, a jointventure of the Tribe and Kinder Morgan Energy Partners (KMP).Located in the San Juan Basin, the 140-mile gathering systemcurrently collects more than 25 MMcf/d from 125 active wellsattached to the system. “This acquisition will produce positiveresults for KMP beginning in the third quarter through our 49%ownership interest in Red Cedar,” said Richard D. Kinder, chairmanof KMP. “We are pleased with the performance of Red Cedar andbelieve this acquisition will result in additional expansionopportunities, as the Colorado Dry System is located in an areathat is expected to realize increased drilling.” Red Cedar gathersabout 650 MMcf/d on the Southern Ute Indian Reservation in La PlataCounty and is the largest gathering company in Colorado.
Columbia Electric Corp., a subsidiary of Columbia Energy Group,kicked off construction of its Liberty Electric Power Project inEddystone, PA on Tuesday. The 568 MW combined-cycle power facilitywill be among the first independent power projects constructed inthe newly deregulated electric generation industry in thePennsylvania-New Jersey-Maryland (PJM) power pool. “We are pleasedto be moving ahead with this project and plan to have it ready forcommercial operation by the first quarter of 2002,” said Michael J.Gluckman, president and CEO of Columbia Electric. The plant isbeing constructed on the former site of the Baldwin SteamLocomotive Foundry, returning a brownfield industrial site toproductive use. The Liberty plant is expected to cost about $300million to develop and would consume about 80 MMcf/d of gas.Columbia’s partners in the project include Duke/Fluor Daniel,PG&E and Conectiv.
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