After five years in the making, Alliance Pipeline officiallyopens for business today, adding 1.325 Bcf/d of new firmtransportation capacity from British Columbia and Alberta to theChicago gas market hub. The pipeline company held a grand openingceremony yesterday. “Our new, state-of-the-art pipeline systemprovides Western Canadian natural gas producers the opportunity toexpand their markets in both the Midwest United States and EasternCanada by offering them incremental transportation capacity througha real, competitive choice,” said CEO Norm Gish. “It will provideend-users in these market areas with a new supply conduit for thecleanest-burning hydrocarbon fuel. It will stimulate theexploration and producing sector in Western Canada resulting inenhanced business and employment opportunities in many communities.And, it will significantly contribute revenues to many governmentsdirectly in the form of taxes and indirectly in the form ofroyalties through increases in gas production.” COO Allan Edgeworthnoted that while the scale of the 2,300 mile system is significant,”it is only capable of transporting 10% of Alberta’s and BritishColumbia’s total gas production destined for export to eitherEastern Canada or the United States. The Alliance pipeline sponsorsinclude Coastal (14.4%), Enbridge (21.4%), Fort Chicago EnergyPartners LP (26.0%), Williams (14.6%) and Westcoast (23.6%).

Marathon Group, a unit of USX Corp., said yesterday thestrategic re-organization of its upstream business is largelycomplete but an additional 250 positions likely will be eliminated,leaving the upstream business with 24% fewer employees than in1999. “We have plans in place for dramatic change and improvementand I believe that the organization is both ready for change andable to deliver on our commitments,” said Company PresidentClarence Cazalot. Cazalot introduced a new senior leadership teamin September after announcing the restructuring plan in October.Commenting on the company’s target of implementing $150 million ofannual repeatable efficiencies by the end of 2001, Cazalot said,”We are on track to deliver a $75 million reduction inabove-the-field costs and we have made substantial progress towardscutting exploration expenses by $50 million. As we also realizeannual savings of $25 million through global procurement, we arewell on our way to meet our ambitious overall target.”

Maritimes & Northeast Pipeline completed construction andcommissioning of the 63 mile Saint John Lateral this week and begandelivering 164,000 MMBtu/d of gas from a point near Kedron Lake todelivery points in the Saint John and Lake Utopia areas in NewBrunswick.

Kinder Morgan Energy Partners LP yesterday announced plans tobuy GATX Corp.’s U.S. petroleum pipeline and terminal businessesfor $1.15 billion in cash and assumed debt. Primary assets includedin the transaction are the CALNEV Pipe Line Co. and the CentralFlorida Pipeline Co., which transport petroleum products tohigh-growth markets in Nevada and Florida, along with 12 terminalsthat store petroleum products and chemicals. Upon closing thistransaction, KMP will become the second largest independentpetroleum storage operator in the U.S. and the second largestindependent chemical terminal operator in the U.S., based oncapacity. GATX’s international operations and its 50% ownership inthe GPS trading arm, which are also being marketed, are not beingsold to KMP. “The transaction is expected to be immediatelyaccretive to cash available for distribution to KMP unitholders bybetween 10 to 15 cents annually,” said Richard D. Kinder, CEO ofKMP. “Additionally, it is expected to be substantially accretive toKinder Morgan, Inc. shareholders by 15 to 20 cents per shareannually.” KMI, through its general partner interest, operates KMPand shares in the cash distributions generated by KMP.

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