Brief

Top energy regulators from Canada, Mexico and the United Stateswill head the list of speakers at the Sixth Annual Meeting of theGas Industry Standards Board (GISB), to be held Sept. 25-26 in SanAntonio. Commissioner Linda Breathitt of the Federal EnergyRegulatory Commission, Commissioner Raul Monteforte of Mexico’sComision Reguladora de Energia, and Deborah Emes, member ofCanada’s National Energy Board will deliver key addresses at themeeting, whose theme is “Convergence: Making it Work.” Stan Horton,chairman of the GISB board of directors and CEO of Enron GasPipeline Group; and Jim Buccigross, chairman of GISB’s ExecutiveCommittee, will report on the state of the standards-settingorganization. Other speakers include representatives of the FederalTrade Commission, and public utility commissions in Texas,Kentucky, Illinois, and Ohio.

Adding another building block to its long hoped for pipelinethrough Wisconsin and Illinois, Guardian Pipeline signed anagreement with IPSCO Inc. to manufacture and deliver steel pipe forthe proposed 149 mile-long pipeline. IPSCO will begin producing thepipe next fall to complement Guardian’s construction, which isexpected to get under way by early 2002. Though regulatory approvalis still to come, the agreement brings Guardian’s project closer toreality. In July, FERC concluded Guardian would have “limitedadverse impact,” and would be acceptable as long as appropriatemitigation measures were adopted. FERC is expected to make a finaldecision on the project by early next year. Guardian will transportgas from interconnections with Alliance, Northern Border,Midwestern Gas Transmission and the Natural Gas Pipeline of Americaat the Chicago Hub near Joliet, IL to northern Illinois andsouthern Wisconsin markets.

Blue Dolphin Energy has signed an agreement to build a gaspipeline in the Gulf of Mexico to transport 120 MMcf/d ofproduction for Vastar Resources. The new 3.4-mile, 12-inch diameterline will be designed to accommodate production from High IslandA-5 to Blue Dolphin’s Black Marlin Pipeline in High Island BlockA-6. Transportation service is expected to commence in 60 days.Blue Dolphin will own a 50% interest in the new pipeline at anestimated net cost of $1.1 million. It owns a 50% interest andoperates the Black Marlin Pipeline system, which currentlytransports 120 MMcf/d. Black Marlin has capacity to transport 200MMcf/d. Blue Dolphin Energy Company is engaged in the acquisitionand exploration of oil and gas properties, and the gathering andtransportation of natural gas and condensate.

Frederickson Power acquired a partially built gas-fired 249 MWelectricity generating facility located in Fredrickson, WA from theBonneville Power Administration for $25.1 million. FredericksonPower is a partnership between Westcoast power and EPCOR PowerDevelopment Corporation. “Completion of the Frederickson Powerproject will provide an alternative to existing hydro-electricpower facilities that can not meet increased demand,” saidWestcoast Power President Jeff Meyers. “It will produce energysafely and efficiently with a preferred fuel source which supportsefforts to improve local air quality and addresses climate changeconcerns.” The plant is expected to cost $160 million and has acomercial operation date set for the middle of 2002.

Kinder Morgan Power Co., a wholly owned subsidiary of KinderMorgan Inc. announced plans to build a 550-MW electric power plantin Jackson, MI. All the necessary regulatory permits and approvalshave been obtained, and construction on the $250 million naturalgas-fired plant will begin this month. Operations begin in June2002. CEO Richard D. Kinder said the Jackson station will be thesecond in a series of electric power plants that Kinder will buildusing its proprietary Orion configuration. The Orion projects usegas and steam turbine generator sets and auxiliary equipmentprovided by General Electric’s S&S Energy Products. Kinder saidthat electricity demand has increased nearly 35% in the state inthe past 10 years, but no additional power plants have been built.Michigan imports some of its electricity from other states. TheJackson plant will operate during intermediate- and peak-demandperiods to provide wholesale electricity to electric utilities andpower marketing companies.

Denver’s Tom Brown Inc. paid $16.2 million for an estimated 22Bcf of gas equivalent in reserves, with current net dailyproduction of 8 MMcf of equivalent gas in the Rocky Mountainregion’s Pavillion field. The transaction by the independent energycompany increases its working interest in the Pavillion to 90%, upfrom a previous 50% interest.

ONEOK broke ground Friday just north of Oklahoma City on a newnatural gas-run advanced electricity generating plant.The 300 MWplant, which will be owned and operated by ONEOK Power Marketing,will use the latest gas turbine technology to provide electricityfor utilities as well as other purchasers. This marks ONEOK’sfirst venture into the growing natural gas-powered electricitygeneration market. Intended as a “peaking plant,” the facilitywill provide electricity during the summer periods of peak demand.The Oklahoma Municipal Power Authority has already signed acontract to purchase 25% of the plant’s total capacity. ONEOKPresident and Chief Operating Officer David Kyle had this to sayabout ONEOK’s new project, “The natural gas-fueled plant that willbe built here is symbolic of not only a new direction for us, butfor the state as well.” The plant’s site is strategicallypositioned near Oklahoma Gas & Electric’s electric transmissionlines and one of ONEOK’s own natural gas storage facilities. Thegas-burning turbines will be provided by General Electric at anestimated cost of $70 million and will be in operation by thesummer of 2001.

After a brief foray in negative territory, natural gas futuresbubbled higher yesterday, preserving bulls’ 6-day and countingstring of price advances. With yesterday’s 4.2-cent rise, the Junecontract has climbed almost 40 cents from $3.01 lows notched on May5. June closed at $3.396.

El Paso Energy’s Petal Gas Storage said Friday it plans toproceed with the construction of a third salt cavern at itsexisting facilities in Mississippi based on the success of an openseason, which ended May 5. It noted it received service requests inexcess of the capacity proposed in the open season, and is now inthe process of evaluating the bids. The proposed expansion, ifapproved by FERC, would add 5 Bcf of working gas storage capacityto Petal’s existing storage facilities in Hattiesburg, MS, givingthe storage company a total of 15 Bcf of actual working gascapacity and 1.5 Bcf/d of withdrawal capacity.