Brief

The Georgia Public Service Commission approved a consent agreement to resolve issues stemming from a June 23 gas pipeline accident near Perry Boulevard in northwestern Atlanta. A third-party excavator ruptured a 24-inch steel high-pressure gas pipeline owned by Atlanta Gas Light. The commission’s investigation found that gas continued to flow for more than four hours from the ruptured pipeline before the company was able to close the valves. The stipulation requires AGL to pay the state $30,000 and to absorb the cost of the gas lost during the incident, estimated at $17,252. In addition, the company must provide within 45 days a revised Emergency Manual that complies with all state and federal safety regulations. Within 60 days after the PSC staff approves the new manual, the company must ensure that all supervisors, service center managers and distribution center foreman are trained in emergency procedures.

Heritage Propane Partners LP said it has received consents and approvals required to complete its previously announced purchase of Dallas-based midstream operator Energy Transfer Co. (see Daily GPI, Nov. 10). The transactions are still subject to other conditions, including Heritage obtaining financing. “The lenders under our existing credit agreements have agreed to amendments that allow Heritage to proceed with its combination with Energy Transfer,” said Heritage CEO H. Michael Krimbill. “In addition, we had previously filed premerger notification under the Hart-Scott-Rodino Antitrust Improvements Act and have received notice that the Federal Trade Commission has granted early termination of the waiting period.” The series of transactions is expected to close within the next 60 days. Heritage is the fourth largest propane retailer in the United States, serving more than 650,000 customers from nearly 300 customer service locations in 29 states. Energy Transfer operates 4,500 miles of gas gathering and transportation pipelines with an aggregate throughput capacity of 2.5 Bcf/d and natural gas treating and processing assets in Texas, Oklahoma and Louisiana.

Energy software developer Allegro Development Inc. said Tuesday that Suncor Energy Marketing Inc. (SEMI), a subsidiary of Calgary-based Suncor Energy Inc., has successfully completed the implementation of Allegro v. 7.0. for its natural gas marketing operations. SEMI, which began its search for a comprehensive, multi-commodity energy marketing system with integrated risk management capabilities last year, said it selected Allegro after a competitive and rigorous selection process. “The company’s decision to bring our marketing operation back in house created an immediate need for an integrated, multi-commodity management system that could support our natural gas marketing operations,” said Mr. Dale Hansen, project director for SEMI. SEMI said the implementation of Allegro for its natural gas marketing operations took four months to complete and the company went live in October 2003. “The project went well coming in on time and budget for the required scope,” added Hansen. “Early indications are that the system has been accepted well by our users and is delivering what we required.”

The Minerals Management Service (MMS) announced that the oil and gas industry has set a new world record for water depth in drilling in the Gulf of Mexico at 10,011 feet of water. According to MMS officials, Transocean Inc. and ChevronTexaco set the record when the Transocean drillship Discoverer Deep Seas spudded the well on November 16, 2003. The exploration well for oil and gas is being drilled in Alaminos Canyon Block 951 on ChevronTexaco’s Toledo prospect. It is the first time in the offshore drilling industry’s history that a drilling rig has explored for oil and natural gas in more than 10,000 feet of water. The previous world water-depth drilling record was set in October 2001 in 9,727 feet of water in Alaminos Canyon Block 903 by another Transocean drillship, the Discoverer Spirit, working for Unocal.

It was mild, but a rally nonetheless. With a new spate of cold weather approaching the Midwest and Northeast, prices ranged from flat to up about 15 cents Tuesday. Not counting the Southwest basins, the West saw most of the flat to barely higher or lower numbers.

Sen. Bob Graham (D-FL), a vocal opponent of oil and natural gas drilling off the coast of Florida, announced Monday that he will not seek re-election when his current term expires in late 2004. Graham was elected to the Senate in 1986, and served as governor of the Sunshine State for eight years (1979-1987). He is the top-ranking Democrat on the Senate Veterans Affairs Committee, and also has served on several other committees during his three terms in the Senate — Energy and Natural Resources, Environmental and Public Works, Finance and Select Intelligence.

A bankruptcy court judge has said he will rule Nov. 5 on Mirant Corp.’s request to have actions against its current and former officers and directors and those of its former parent, Southern Co. stayed until the bankruptcy is resolved. The bankruptcy court judge in Fort Worth, TX issued a temporary stay of those actions Thursday. While court actions against a company engaged in an Chapter 11 bankruptcy reorganization are automatically stayed, those against company individuals could proceed unless the judge rules them out. Mirant asked that the stay be granted to allow company officials to work on the reorganization. Also, the outcome of individual trials could have a bearing on actions against the company at a later date. Earlier last week the court granted Mirant $500 million in debtor-in-possession (DIP) financing, to be provided through a loan from General Electric Capital Corp., to supplement its cash on hand to fund its merchant power and marketing and trading operations. (see Daily GPI, Oct. 22).

Dallas-based independent Angus Energy Corp. said it completed a $3 million private placement and has acquired one of the largest acreage positions in the expanding Barnett Shale natural gas play in central Texas. In connection with the financing, Angus has acquired the exclusive drilling rights and operating interests in the Stanton Powell Ranch and surrounding properties located in Bosque County, TX. The company now controls over 17,000 acres of mineral interests in the Barnett Shale, making it one of the largest leaseholders in the area. Angus also holds an option to acquire an additional 141,500 Barnett Shale acres. The Barnett Shale gas play is the largest natural gas field in Texas and a primary supplier to the North American gas market. The U.S. Geological Survey estimates the Barnett may hold 10 Tcf of recoverable natural gas with production in the region currently exceeding 6 Bcf per month. Natural gas was discovered on the Stanton Powell Ranch property in 1996. Angus will employ the latest proven horizontal drilling and fracture technologies to recover the gas within its Bosque County properties. Seismic has already been shot on the property and drilling operations will commence immediately. As part of the financing agreement Angus will submit certain filings to the SEC and apply for a listing on the American Stock Exchange within 120 days.

For the fourth time in a row, Maritimes & Northeast Pipeline LP (M&N) has reached agreement with its customers and other stakeholders on Canadian tolls through its Tolls & Tariff Working Group (TTWG). M&N said the settlement provides its customers with predictable tolls for transporting natural gas on the Canadian pipeline system through 2006 and eliminates the need for costly formal hearing processes during this period. The settlement was reviewed and approved by the National Energy Board on Sept. 17. “We are very pleased to have a multi-year agreement in place,” said Doug Bloom, president of Maritimes & Northeast Pipeline. “This agreement adds certainty for our customers active in this emerging basin.” The streamlined process consisted of settlement discussions with customers and other stakeholders and resulted on June 26 with the positive vote by TTWG members in favor of the agreement, which results in a 2004 Canadian toll set at C$0.7147/MMBtu. M&N and its customers also were successful in reaching negotiated toll settlements in 2001, 2002 and 2003. The project sponsors of M&N are Duke Energy (75%), ExxonMobil (12.5%) and Emera Inc. (12.5%).