Bringing

Moving one step closer to bringing 1.325 Bcf/d of gas fromWestern Canada to Chicago, Alliance Pipeline announced the start ofconstruction with the clearing of 410 miles of forestedrights-of-way for mainlines and laterals in northwestern Albertaand northeastern British Columbia. The entire system is expected tobe completed and in service by October, 2000. Alliance said italready has commitments from 37 shippers for 15-year contractsworth a total of $8.2 billion.

The first of a series of industry-sponsored meetings aimed atbringing the divided gas segments closer together on some of themajor regulatory initiatives proposed by FERC got underway inHouston last week. Not surprisingly, industry representatives atthe initial session agreed to narrow the “primary focus” of theirnegotiations to two proposals to ease pipeline rate regulation -short-term capacity auctioning and negotiated terms and conditions.

The August Nymex contract probed lower yesterday but managed torebound before the close, bringing an end the price slide sincelast Thursday’s $2.425 high. Tuesday’s choppy trade left the spotmonth up 1.7 cents at $2.226 on the day. Despite the tight tradingrange and modest gain posted for the day, the session was anythingbut uneventful. Estimated volume confirmed the active market with53,327 contracts changing hands.