Briefs

Midcoast Energy Resources said Midcoast del Bajio has beenawarded a permit by the Mexican Energy Regulatory Commission tobuild a 59-mile, 16-inch diameter gas pipeline in the Bajio regionin the state of Guanajuato in central Mexico. The line will runfrom an interconnection with a Pemex near Valtierrilla to Leon andwill provide gas transportation services to parts of central Mexicothat currently do not have access to gas. Midcoast del Bajio willhold an open season from July 16 to July 26 for firm transportationcapacity on the proposed pipeline. And a series of informationalmeetings will be held jointly with Pemex to answer questions frompotential transportation customers and other interested parties.The meetings will be held on June 24 in Irapuato, Guanajuato at theHotel Parador del Rio and on June 25 in Leon, Guanajuato at theFiesta Americana Hotel.

Shareholders of St. Joseph Light & Power Co. of Missouriapproved a merger with UtiliCorp United Inc. of Kansas City. Of theshares voted, 93.6% were in favor of the merger, while only 2.1%voted against. The approval vote represents 68.5% of all St. Josephshares outstanding. St. Joseph Light & Power share owners willreceive $23 of UtiliCorp common stock for each share of theircommon stock at the deal’s completion. St. Joseph’s stock closed at$20.6875 and UtiliCorp’s stock closed at $24.8125 Tuesday. The$190.6 million deal to create Missouri’s fourth largest gasdistributor and third largest electricity distributor was announcedin early March (See Daily GPI March 8, 1999). The companies nowseek regulatory approval, including the completion of a marketpower study required by both the Missouri Public Service Commissionand FERC, which should be finished in about 60 days. Steinbeckersaid. Light & Power serves 66,000 electric and gas customers inall or part of 10 northwest Missouri counties. UtiliCorp has morethan three million customers in eight states and in Canada,Australia, New Zealand and the United Kingdom.

Columbia Transmission Communications (CTC), a wholly-ownedsubsidiary of Columbia Energy Group, unveiled plans to beginbuilding the initial leg of its telecommunications network Monday.The initial leg of the overall route will extend 260 miles from NewYork City to Washington D.C. using Columbia Gas Transmission’sright-of-way. It will be capable of providing voice, data and videosignal access to 16 million people. The company is developing plansto extend this network to 2,500 route miles with direct access to35 million people throughout the eastern United States, includinglines to Cleveland, Cincinnati and New Orleans. CTC said usingColumbia’s right-of-way will allow for a competitive, low-costfiber network. Columbia still needs to get landowner approval forthe lines, a company spokesman said, because the right-of-way wasapproved for pipeline use, not telecommunication wire.

Shareholders for both El Paso Energy and Sonat Inc. announcedoverwhelming approval of the two companies’ proposed mergerThursday. For Sonat, representatives for 86% of the company’soutstanding shares voted in a special shareholders’ meeting, andthe merger was approved by 98%. El Paso Energy’s stockholders alsoapproved the merger at a meeting held Thursday. Out of 93 millionEl Paso shares that voted, 95% voted in favor of the merger. Underthe terms of the $6 billion agreement, which was announced in March(see Daily GPI, March 16), Sonat stockholders will receive oneshare of El Paso Energy common stock for each share of Sonat commonstock exchanged in the merger. El Paso will issue 110 millioncommon shares to complete the transaction after the deal closes.Sonat said it expects the regulatory reviews of the proposed mergerto be completed during the third or fourth quarter of this year.

U.S. Senate Energy and Natural Resources Committee ChairmanFrank Murkowski (R-AK) is planning to take a closer look at thepotential impact on his home state and on the West Coast of theproposed merger of BP Amoco and Atlantic Richfield Co. Thecommittee has scheduled a hearing on June 24 at 9 a.m. to reviewthe merger. BP Amoco-Arco would hold 75% of the Alaska North Slopeoil fields and a similar share of the Trans-Alaska Pipeline System.It also would have control over 90% of the crude oil delivered tothe West Coast. Its property holdings in Alaska would far exceedthe maximum allowed by state law, although the companies said theyplan to divest some of their leases. The merger would create thelargest oil producer in the U.S. and the world’s second-largestpublicly traded oil firm, with a market capitalization of about$200 billion.

Dominion Resources and Consolidated Natural Gas filed with theFederal Energy Regulatory Commission for approval of theirpreviously announced merger plan. With yesterday’s submission, thecompanies have completed all regulatory filings necessary formerger approval. The companies said in the joint filing that themerger plan satisfies requirements of Section 203 of the FederalPower Act. FERC must approve the transfer of the power marketingsubsidiaries of CNG to Dominion Resources under Section 203. Inaddition to filing with FERC, the companies have completed mergerfilings with the U.S. Securities and Exchange Commission (SEC) andwith public utility commissions in Virginia, North Carolina,Pennsylvania and West Virginia.

Columbia Gas Transmission sold its Project Penny gatheringpipeline and compressor facilities in Pennsylvania and New York toNorse Pipeline for $21.5 million. Norse is an affiliate of SchansonEnergy LLC, the energy investment arm of Schanson CapitalManagement of Los Angeles, and Nornew Inc., an integrated oil andgas exploration company focused mainly on the Appalachian Basin andthe Maritime provinces in Atlantic Canada. Norse Pipeline’sdomestic operations are based in Houston and Jamestown, NY. ProjectPenny consists of seven compressor station locations and about 341miles of gas pipeline in northwestern Pennsylvania and southwesternNew York. Constructed in the late 1970s and early 1980s, theProject Penny facilities have no direct connection to ColumbiaTransmission’s other pipeline facilities and are not necessary forthe company to provide its core services of interstate gastransportation and storage. The purchase of Project Penny makesNorse Pipeline the largest gas gatherer in the northern AppalachianBasin, with access to about 6,500 gas wells in New York andPennsylvania and the capacity to gather more than 100,000 Mcf/d.

The Department of Defense intends to award the federalgovernment’s largest energy-saving performance contract ever toPepco Energy Services and Viron Energy Services. Pepco EnergyServices is a subsidiary of Potomac Electric Power Co. Viron EnergyServices is a subsidiary of York International Corp. President BillClinton announced the $200 million contract, designed to implementenergy-savings measures for the Military District of Washington(MDW). The MDW is a major Army command encompassing five Armyposts: Fort George G. Meade in Maryland; Fort Myer, Fort Belvoirand Fort A.P. Hill in Virginia; and Fort Lesley J. McNair inWashington, DC. More than 2,100 buildings were examined for energyimprovements. The 18-year MDW contract will result in about $220million in overall cost savings.

Nevada Energy Inc. signed an offer to purchase from ConsolidatedBeacon Resources Ltd. two separate onshore exploration agreementscovering a combined total area of about 82,000 net hectaresnorthwest of Truro, Nova Scotia. Nevada will have a 75% workinginterest in 27,970 gross hectares and a 100% working interest in60,936 gross hectares and will be the operator. The agreementsrequire the operator to expend capital to fulfil the earningrequirements under the terms of the work programs as required bythe Nova Scotia Petroleum Directorate. Significant offshore gastests have been documented in the 5 MMcf/d range with establishedoil and gas production of 4 MMBoe realized at the onshore StoneyCreek Field within the same depositional basin about 78 milesnorthwest of the lands.