Assets

After being on the divestiture road for almost a year andshedding $3 billion worth of non-core assets, TransCanada PipeLinesLtd., reported that its first nine months of 2000 and third quartershowed progress over the equivalent time periods of 1999. Netearnings before asset sales and long-term natural gas contractlosses were $433 million ($0.91 per share) for the first ninemonths of 2000, compared to $402 million ($0.86 per share) duringthe same period last year. The company attributed the 8% increaseto higher income from the power and gas marketing businesses aswell as reduced financial and preferred equity charges. Beforeadding special items, the company posted third quarter net earningsof $151 million ($0.32 per share), compared to $141 million ($0.30per share) for the third quarter of 1999.Deliveries of natural gason the Canadian Mainline and the BC system were approximately thesame for the first nine months of 2000 and 1999. The CanadianMainline delivered about 7.3 Bcf/d for both periods, while the BCsystem delivered approximately 1.1 Bcf/d. The Alberta system didexperience a decline. For the first nine months of 2000 itdelivered an average of 12.2 Bcf/d, compared with the same periodduring 1999 when it delivered 12.4 Bcf/d. Marketing also stumbled abit, as the company marketed about 6.1 Bcf/d for the first ninemonths of 2000, compared to 6.6 Bcf/d for the first nine months of1999. TransCanada took a beating on some long-term natural gascontracts it had entered into to support various pipelineinvestments and other business initiatives. Due to growing naturalgas demand in Alberta, and excess pipeline capacity leaving theprovince, the price differential between the Western CanadaSedimentary Basin and eastern market areas continued to shrink.TransCanada was forced to enter into third party arrangements tocrystallize the negative value of its long term natural gascontracts and the company reported taking a $124 million after-taxcharge associated with the losses.

Williams’ energy services business unit closed its previously announced acquisition of the natural gas liquids (NGL) portion of TransCanada’s midstream operations. The $540 million deal was first announced on Aug. 3 (see NGI, Aug. 7).

Consumers Energy filed a request with the Federal EnergyRegulatory Commission (FERC) to transfer its electric transmissionsystem assets to a new wholly owned subsidiary, Michigan ElectricTransmission Company (Michigan Transco). The proposed transfer isthe first step in a plan to sell or transfer control of itstransmission business to a party which meets the requirements ofFERC Order 2000. Michigan Public Act 141, the electric industryrestructuring legislation signed by Governor Engler in June,requires that investor-owned Michigan utilities sell or transfercontrol of their transmission systems to an independentorganization by the end of next year. After the transfer iscompleted, Consumers will function solely as a generation anddistribution company taking service from Michigan Transco underFERC-approved transmission tariffs. “Our next step is to fullyevaluate all alternatives to achieve full independence of thetransmission business,”said David W. Joos, president andCEO-electric.Consumers Energy, the principal subsidiary of CMSEnergy, is Michigan’s largest utility providing natural gas andelectricity to more than six million people.

Williams’ energy services business unit reported the closure of itspreviously announced acquisition of the natural gas liquids (NGL)portion of TransCanada’s midstream operations yesterday. The $540million deal was first announced on Aug. 3 (see Daily GPI, Aug. 4).

Aquila Energy, a subsidiary of UtiliCorp United, said yesterdayit has reached a definitive agreement to buy GPU Inc.’s subsidiaryGPU International Inc., including its interests in six U.S.-basedgenerating plants and a development generating project, for $225million.

To prepare for El Paso Energy’s looming takeover of Coastal Corp., Westcoast Energy Inc. and Coastal last week split up Engage Energy, their three-year-old marketing venture, with each retaining a half interest in the Houston-based gas marketer.

To prepare for El Paso Energy’s looming takeover of CoastalCorp., Westcoast Energy Inc. and Coastal are splitting up EngageEnergy, their three-year-old marketing venture, with each retaininga half interest in the Houston-based gas marketer. The split shouldbe completed by the end of the week.

Cabot LNG, the largest U.S. liquefied natural gas importer and distributor in the Northeast, agreed last Thursday to sell 100% of its assets to Tractebel of Brussels, Belgium for $680 million. The deal will give Tractebel the LNG terminal in Everett, MA, along with 10% interest in a liquefaction facility in Trinidad and Tobago and the LNG tanker, Matthew. The transaction is set to close by the beginning of September.

A deal reached last year that transferred all of Chevron’s oiland gas assets in Utah’s Uinta Basin to the newly formed ShenandoahEnergy (SEI) in exchange for an equity ownership interest is payingoff big time for the energy giant, said Chevron North AmericaPresident George L. Kirkland.