Estimated

Mexico’s energy industry will face big challenges in the next 10 years, as demand for natural gas rises an estimated 120% — with 55% of that demand tied to a huge increase in gas-fired generation. Now positioning itself to become one of the “frontiers” for gas development, a top Mexican energy official said Tuesday that the country has begun courting more private investment to improve its aging pipeline and transmission infrastructure, add at least two liquefied natural gas (LNG) plants and begin intensive exploration and development efforts of its prolific and untapped reserves.

Nine federal agencies have begun a review of an estimated $70 million in existing government contracts with scandal-ridden Enron Corp. and Arthur Andersen LLP to determine whether they are being carried out “in accordance with contract terms and proper business practices.”

Pipeline construction season has officially begun as two natural gas pipeline companies formally announced on Tuesday their new proposed projects for the Southeastern region’s gas needs. As Southern Natural Gas Co. unveiled its intentions to expand its Sonat system for the third time in the last year to supply incremental demand in Alabama, Georgia and South Carolina, Duke Energy Gas Transmission (DEGT) launched a month-long open season to determine market interest in a new natural gas supply and transportation option called the Alabama-Georgia Energy System.

California regulators are expected today to authorize an estimated $3 billion in utility revenues from increased retail power rates to cover all of the state water resources department (DWR) costs for buying wholesale power in the upcoming months before more moderately priced, long-term, fixed-rate contracts kick in.

California Gov. Gray Davis “delivered” on his plan to buy outthe transmission systems of the financially-troubled investor-ownedutilities in the state Friday, outlining the framework of a deal,but with no dollar signs attached and no on-the-record agreementswith the utilities.

Pennsylvania-based PPL Corp. has recently taken on a “Go West”theme, as evidenced by its plans to build 1,800 MW of newelectricity generation on the left coast at an estimateddevelopment cost of $900 million.

Atlanta-based power marketer Southern Energy Inc. raised theestimated price range of its initial public offering yesterday, andexpects net proceeds from the deal to reach $1.05 billion — 19%more than the previously expected $884 million in net proceeds. Itsprice rose nearly $3 yesterday, to $18 to $20 per share from $15 to$17 per share.

Reliant said the #2 compressor unit at Chandler Station (LatimerCounty, OK) is down with a cylinder problem. As of Monday theestimated downtime was two weeks.

Denver’s Tom Brown Inc. paid $16.2 million for an estimated 22Bcf of gas equivalent in reserves, with current net dailyproduction of 8 MMcf of equivalent gas in the Rocky Mountainregion’s Pavillion field. The transaction by the independent energycompany increases its working interest in the Pavillion to 90%, upfrom a previous 50% interest.