DTE Energy Services and Entergy Wholesale Operations announced that construction of a jointly-owned 320 MW natural gas-fired electric power generating plant began in May in Will County, IL. The plant, located about 30 miles south of Chicago in the Village of Crete, is expected to be in commercial operation in June 2002. The facility will be operated by Entergy Operating Systems Inc., in cooperation with DTE Energy Services. “The electric output from this facility will be available in time to supply additional electricity to the region during high-demand periods next summer,” said Barry G. Markowitz, president of DTE Energy Services. The companies said gas for the project will be provided through the recently completed Vector Interstate Pipeline. The Vector pipeline is partially owned by MCN Energy, which will become part of DTE Energy as a result of a merger between the companies, expected to close today. EntergyShaw LLC, an affiliate of the Shaw Group, will provide the engineering, procurement and construction services for the project.

Dallas-based Wiser Oil Co. reported that it has completed its previously announced acquisition of Invasion Energy Inc., a private Canadian oil and gas company located in Calgary, AB, for $35.7 million (C$55 million). The purchase was funded with cash and $15 million of bank debt (see Daily GPI, May 9). Wiser estimates this acquisition will increase the its proved gas reserves at by 28.8 Bcf, or 38%, to 105 Bcf. Wiser’s daily net gas production will also increase by 12 MMcf/d for the remainder of 2001, a 50% increase over current gas production of 24 MMcf/d. About 65% of Invasion’s net daily gas production is subject to a hedge in the form of a costless collar with a floor price of $4.05 and a ceiling of $5.60. The current hedge runs through October of 2001. Wiser said the Invasion properties are in the Wolverine, Bison and Rossbear fields in Northwest Alberta. The area is 275 miles northwest of Edmonton, AB. It is a multi-pay area with production from the Bluesky, Gething and Wabamun formations at depths averaging less than 1,300 feet. The gas is processed and compressed through 100% owned facilities.

NUI Corp. subsidiary Virginia Gas Co. said yesterday it will not be able to build a pipeline extension to serve Roanoke Gas Co. but has found a temporary alternative to meet a portion of Roanoke’s needs. The companies have modified an agreement because economics could not justify NUI Corp.’s plan to construct a pipeline from Saltville, VA to Roanoke, VA. Instead, NUI Corp., which acquired Virginia Gas in March, will build the pipeline only to Radford, VA, about 45 miles south of Roanoke. To remedy the problem created by shortening the proposed pipeline, Virginia Gas will connect into a pipeline operated by East Tennessee Natural Gas Co., a subsidiary of Duke Energy, which travels from Radford to Salem. This plan would provide Roanoke Gas an incremental 4,000 Dth/d of incremental capacity. The original Virginia Gas pipeline agreement would have brought Roanoke Gas 17,500 Dth/d, including extensions to Franklin County and Rocky Mount, two areas that have never had natural gas. “We appreciate the work NUI has done to help ensure that our immediate needs are met,” said John Williamson, CEO of Roanoke Gas. “However, this situation is disappointing to us and to the residents of Franklin County, who remain without access to natural gas.” NUI COO Mark Abramovic said, “Continued project assessment has shown us that due to economic and construction cost reasons, it is no longer viable to complete the project as planned. We are pleased that we were able to jointly develop an alternative solution to meet the immediate natural gas needs of Roanoke Gas.” Williamson estimates the small increase in capacity will enable Roanoke Gas to meet the growth needs of the Roanoke Valley for three to four years. The company said it will be evaluating alternatives to provide additional capacity and supply for the area in the future, including additional NUI proposals.

Blue Ridge Energy Inc. reported that in a joint venture with Hay Exploration Inc. of Ashland, KY, it plans to develop 18,000 acres of undeveloped oil and natural gas leases in the Licking River and Cannel City Prospects located in Morgan County, KY. Blue Ridge said the prospects are dedicated to the development of shallow natural gas wells at 1,500 feet in depth, as well as the opportunity for deeper development potential at 5,000 feet in the St Pete Trend. Blue Ridge Energy owns a 50% working interest in the Kentucky prospects, which have the potential for up to 200 drill site locations. “We expect to begin the initial drilling and testing during the third quarter of this year,” said Edward L. Stillie, CEO of Blue Ridge. “The acquisition and development of these properties is in keeping with our strategic plan to focus on developmental opportunities in one of our core regions, the Appalachian Basin.”

El Paso Merchant Energy is moving forward with its plans to build a 340 MW natural gas-fired simple cycle power plant in Augusta Township, MI. The facility, expected to be operational by May 2003, would supply wholesale electricity in peak periods to supplement the power of baseload facilities, said the El Paso Corp. subsidiary. El Paso’s Michigan affiliate Augusta Park Energy LLC filed an air permit application in early May with the Michigan Department of Environmental Quality. According to the permit, the plant would be located in the high-growth southwestern part of the state, between Battle Creek and Kalamazoo, in a 30-acre complex with another 110-acre buffer zone. Augusta Park Energy would manage the facility.

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