Deal

Citing a restructuring plan formulated to deal with poor 1998earnings, Aquila Energy’s Aquila Gas Pipeline Corp. (AQP)announced Tuesday it will cut 60 people from its staff of 310. Thecuts will inflict a $1.7 million pre tax charge on the company’searnings.

A deal to joint venture the Permian Basin oil and gas producingassets of ARCO Permian, an ARCO subsidiary, and Chevron USAProduction will save the companies money and serve as a platformfor the addition of other Permian interests.

San Jose-based independent power company Calpine Corp. acquireda 20% interest in 82 Bcf of proven gas reserves in NorthernCalifornia’s Sacramento basin. Calpine’s $15 million investmentprovided a portion of the financing for Houston-based SheridanEnergy Inc.’s acquisition of Sacramento Basin oil and gasproperties from Amerada Hess Corp.

PP&L, Inc., a subsidiary of Allentown, PA-based PP&LResources, said it expects to sign an agreement to providewholesale electric power marketing, trading and risk-managementservices on a “round- the-clock” basis to Energy New England LLC,an energy cooperative organization formed to provide energy andrelated services to public power entities in New England. ENErepresents about 700 MW of peak load and 850 MW of energy supply.It is the largest wholesale aggregator of public power system loadand generation assets in the New England region.

Primary Energy, Inc., a subsidiary of Nipsco IndustriesInc.(NI), and Amoco are negotiating a deal to develop a naturalgas-fired cogeneration facility at Amoco’s Whiting Refinery inIndiana, NI announced Tuesday. The understanding allows the partiesto proceed closer toward final agreements. The energy produced bythe plant will be used by the Amoco refinery and other customers innorthern Indiana.

The cash market has plenty of fundamentals to deal with goinginto the Christmas weekend. But despite widespread freezing weatherand a profusion of actual and/or potential pipeline OFOs (question:does a Strained Operating Condition mean CIG has a hernia?), priceswere unusually bearish Wednesday in light of what many wouldconsider bullish conditions. Most declines were in the neighborhoodof a dime, although some Western points that had been flying highearlier in the week were measuring their losses in terms ofdollars.

In an effort to attract customers in Semco Gas’ pilotderegulation program, Consumers Energy is offering a deal it sayswill save switching residents up to $70 over three years. Consumersis guaranteeing a price of $2.84 per Mcf for three years, comparedto Semco’s price of $2.94 over the same period of time. Consumerswould start delivering gas to new customers April 1, 1999.

Houston Industries’ Wholesale Energy Group (HI) continued toentrench itself into the western energy market by agreeing with thecity of Casa Grande, AZ, to build a new 500 MW natural gas-firedpower plant. The plant will cost $263 million, and upon completionHI will arrange for the supply of gas and sell the electricityproduced from the plant.

PG&E Energy Trading Canada Corp. has made a deal with BC Gasfor capacity on the BC Gas Southern Crossing Pipeline project andfor provision of peaking services to BC Gas, pending regulatoryapprovals. BC Gas last week re-filed for construction of theSouthern Crossing Pipeline, a loop of existing pipeline linked tothe north-south Westcoast Energy pipeline connecting to BritishColumbia and the U.S. Pacific Northwest. The pipeline to linkAlberta gas to the Huntingdon, BC, market area is scheduled tobegin operation Nov. 1, 2000.