Coral Power LLC will supply the natural gas and collect thepower output of a 900 MW generating station to be built andoperated by Tenaska Alabama II Partners L.P., a limited partnershipcomprised of affiliates of Tenaska Inc. The two companies announcedyesterday they had executed an energy conversion agreement for thefacility to be located near Billingsley, AL. Coral plans to marketthe power throughout the Southeast. It is the second of this typeof agreement between Coral and Tenaska. The first was signed inAugust, 1999 for an 845 MW Tenaska Gateway Generating Station inRusk County, TX. The initial financing process for the project willbegin early next year with construction slated to begin in thesummer of 2001 and be completed for summer 2003.

Denver-based Kestrel Energy Inc. yesterday reported a 390%increase in its total proved gas reserves to 24.5 Bcf and a 34%increase in its oil reserves to 387,000 bbl compared with the sametime period last year. For the reporting period ending June 30,Kestrel reported that its proved developed producing net gas was4.76 Bcf; proved developed non-producing, 3.87 Bcf; provedundeveloped, 15.89 Bcf; and probable net gas was 9.04 Bcf. Totalproved plus probable was 33.56 Bcf. Most of the increases in thereserves came from the Greens Canyon project in Wyoming, whereKestrel is averaging 500 to 700 Mcf/d.

With the FERC’s approval handed down in late July, and postmerger execs already named, the union between NiSource and ColumbiaEnergy Group should be completed by late October the companiessaid. Columbia shareholders were given the choice yesterday ofwhether they wanted to exchange their shares for New NiSourceshares or the combination of cash and New NiSource StockAppreciation Income Linked Securities (SAILS). SAILS have zerocoupon debt security and a forward equity contract. Columbiashareholders will receive a package in the mail detailing theirchoices. The companies said shareholders who wish to opt for theNew NiSource stock deal must submit their election forms and stockcertificates so that the exchange agent, ChaseMellon ShareholderServices, receives them no later than 5 p.m. EST on the secondbusiness day before the merger becomes effective. Elections aresubject to proration, and conditioned on Columbia shareholderselecting stock for at least 10% of the outstanding Columbia shares.

ALSTOM ESCA Corp. teamed with Andersen Consulting to bring theelectricity markets of Texas an advanced market and operationssystem for both wholesale and retail marketplaces. ALSTOM ESCA willassist ERCOT markets through the use of its product e-terra market,which manages scheduling, pricing, dispatch, market clearance,congestion management, web portal and other energy managementfunctions. Andersen Consulting will design, develop and implementthe infrastructure necessary for a reliable and robust competitiveelectricity market in Texas. “This new system significantly impactsthe restructured electricity market. It assists customers inmanaging their energy services,” said Russ McRae, account executiveat ALSTOM ESCA.

Houston’s Vastar Resources Inc. has completed its sale of a 40%limited partnership in Southern Company Energy Marketing LP toSouthern Energy Inc. for $250 million in cash. SEI already holdsthe remaining 60% interest in SCEM, which markets electricity andnatural gas. The sale is part of Vastar’s moves to prepare for anagreed merger with a subsidiary of BP, which will acquire nearly18.2% of Vastar’s common stock for $83 per share if approved byshareholders. BP already owns about 81.8% of Vastar’s shares.Vastar shareholders will vote on the proposed BP merger at aspecial meeting on Sept. 15.

Calgary’s Genesis Exploration Ltd. is increasing its explorationand development program 14%, to $125 million through the end ofthis year, up from its previously announced $110 million, toparallel the cash flow from oil and natural gas revenues. Theincrease is expected to add about 2,000 boe/d, up from its previousestimate of 17,500 boe/d. Donald Sabo, chairman, said that thecurrent economic climate has been “exceptionally favorable” forGenesis, and said that the company has a high quality prospectinventory and healthy balance sheet to help it expand. Additionalseismic, land acquisition and infrastructure activity is slated forthe liquids rich natural gas prospects in the West Central region,and drilling next year also will be accelerated. At its Grouardprospect, Genesis plans to increase its development drilling to 19wells on nine pads.

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