Buys

In a move to build up the natural gas side of its business andbecome a Btu trading power, American Electric Power subsidiary AEPResources agreed to buy the midstream gas operations of EquitableResources, principally the Louisiana Intrastate Gas (LIG) system,for $320 million in cash. The addition will be AEP’s firstmidstream gas holdings.

Peoples Energy Services has purchased the Midwest portfolio ofKN Energy subsidiary mc2 for an undisclosed sum. The transactionincludes 8,000 gas contracts, inventories and related receivables,increasing PE Services’ customer base to more than 20,000 Chicagoarea businesses, the largest of any supplier in the Chicago market,the company said.

What was non-strategic to Union Pacific Resources (UPR) provedto be a good fit with core business for Enron Oil and Gas (EOG).UPR sold its 19% non-operated working interest in the MatagordaIsland Block 623 Field and surrounding blocks to Enron Oil and Gasfor $158 million. The deal will close Aug. 31 with an effectivedate of June 1.

Dynegy Canada Inc., a subsidiary of Houston-based Dynegy Inc.,announced Friday it has acquired the midstream gas processingfacilities and gathering lines of Compton Petroleum Corp. for anestimated $39 million.

Questar Corp. subsidiary Universal Resources will increase itsdaily gas and oil production 20% and reserves 31% with a $157.5million acquisition of HSRTW Inc., a Midcontinent regionexploration and production subsidiary of HS Resources of SanFrancisco. In the cash transaction, Universal will receive 150 Bcfeof proved oil and gas reserves (80% gas) primarily in Oklahoma, aswell as Texas, Arkansas and Louisiana. It also receives another 50Bcfe of reserves considered probable and possible. The propertiesinclude 1,000 wells in the Anadarko and Arkoma basins.

Consolidated Natural Gas Co. followed through on its plan toexit wholesale energy marketing yesterday by selling its gasmarketing operations, including supply, sales, storage andtransportation agreements, to Sempra Energy for $48 million.

NorAm Interstate Pipelines bought the intrastate Illini Pipelinefrom Houston-based Nuevo Energy Co. Illini Pipeline operates insouth central Illinois, serving customers in the East St. Louismetropolitan area. The line is about 70 miles long and has capacityup to 45,000 MMBtu/d. NorAm will continue to operate Illini as anintrastate system and expects to take over operation of the Illinisystem this summer.

A transportation agreement signed by Columbia Gulf and theTennessee Valley Authority (TVA) may mark the beginning of alasting relationship. The agreement covers firm transportation onColumbia for 240,000 MMBtu/d of gas that will fuel 1,500 MW ofpower generation at TVA’s Gallatin Power Plant in Sumner County,TN. But the plant represents a small piece of a larger conversionprocess which will turn another 20 generation units to gas usageover the next year.

Cinergy Corp. took a huge step in growing its commoditymarketing operation yesterday with the purchase of Producers EnergyMarketing, LLC, (ProEnergy) from owners Oryx Energy and ApacheCorp. for $42.5 million and with the signing of a 10-year marketingalliance that covers both producers’ entire marketable gas supply,or about 1.1 Bcf/d.