Capitalize

To capitalize on the growing liquefied natural gas market,Houston-based El Paso Energy Corp. said it would spend $1.5 billionover the next five years to build six LNG terminals for NorthAmerican markets. The six proposed projects include three in theUnited States, two in Mexico and one in the Bahamas, with fiveserving the U.S. marketplace.

BP Amoco and Enogex Inc. decided to swap gathering systems inthe Arkoma Basin so the companies might capitalize on theirproducing well interests. BP Amoco received Enogex’s Red Oak gasgathering system in Latimer County in exchange for its Kinta andSouth Bokoshe gas gathering systems in LeFlore and Haskellcounties. No cash was involved in the deal.

BP Amoco and Enogex Inc. announced the exchange of gas gatheringsystems in the Arkoma Basin of Oklahoma in order to capitalize ontheir producing well interests. BP Amoco received Enogex’s Red Oakgas gathering system in Latimer County in exchange for its Kintaand South Bokoshe gas gathering systems in LeFlore and Haskellcounties. No cash was involved in the deal.

Midland, TX-based Costilla Energy Inc. and ONEOK Inc. formed astrategic alliance to capitalize on properties Costilla plans toacquire from Pioneer Natural Resources Co. as well as otherpotential transactions. Tulsa, OK-based ONEOK will participate inCostilla’s previously announced $335 million acquisition of oil andgas properties from Pioneer (assuming it is successful) through anequity investment in Costilla preferred stock.

Houston Industries (HI) is reconfiguring its organization tocapitalize on the convergence of gas and power. HI formed HoustonIndustries Wholesale Energy Group to combine its power generation,gas transportation, and wholesale energy trading and marketingcapabilities of the company.

Marketers hoping to capitalize on the deregulating energymarketplace would be wise to examine the strategies used in otherderegulated businesses, according to a paper by The Paladin Group.Paladin said energy marketers could fail by repeating mistakes ofthe past.

New Jersey Natural Gas Co. (NJNG) and South Jersey Gas Co. (SJG)have formed a one-year alliance to capitalize on supply portfolioassets and create new marketing opportunities. The LDCs agreed torelease capacity to each other for more effective marketing of thatcapacity. For instance, South Jersey is a bigger player than NewJersey Natural on pipelines Columbia and Transco, while New JerseyNatural is a bigger player on Texas Gas and CNG. Under thearrangement, South Jersey will release its contracts on Texas Gasand CNG to New Jersey Natural, and New Jersey Natural will releaseits Columbia and Transco capacity to South Jersey.

NGC Corp. struck its first wholesale electric marketing alliancewith an electric utility in a deal with Florida Power Corp. (FPC).The alliance would capitalize on developing wholesale energymarkets in Florida and other regions, NGC said. It combines theenergy marketing, trading and risk management skills of NGC withthe current power marketing capabilities and over 8,500 MW of powersupply assets of Florida Power. The alliance will allow NGC and FPCto offer wholesale customers in Florida and the southeast a fullspectrum of wholesale power services, and maximize theopportunities for commercial management of FPC’s generation assets.