Fees

Aquila Inc. said it received US$477 million after fees and expenses for its Australian energy investments from a consortium representing Alinta Limited, AMP Henderson and their affiliates. The proceeds were about US$32 million higher than earlier estimates mainly because of a stronger Australian dollar. Aquila said the net proceeds will be used to repay obligations under its recent 364-day secured loan and for other actions to strengthen the company’s balance sheet. Aquila’s investments in Australia included a 34% investment in United Energy Limited, the first electric distribution system to be privatized by the state of Victoria. Aquila purchased its interest in UEL in 1995. Prior to the sale Aquila also owned a significant minority interest in Alinta, a natural gas distributor and operator of a retail gas business in the state of Western Australia, and an interest in Multinet Gas, a gas distribution business in Victoria. The sale of the Australian investments is part of Aquila’s back to basics strategy, which has involved exiting the energy trading business, selling international assets and merchant power plants and refocusing on its utility operations in Colorado, Iowa, Kansas, Minnesota, Missouri, Nebraska and Michigan.

Aquila Inc. said it received US$477 million after fees and expenses for its Australian energy investments from a consortium representing Alinta Limited, AMP Henderson and their affiliates. The proceeds were about US$32 million higher than earlier estimates mainly because of a stronger Australian dollar.

Shell Oil has will pay the state of Alabama $27 million plus another $6.4 million in legal fees to settle accusations the company underpaid natural gas royalties for drilling in state waters. Shell denied any wrongdoing.

The industry-friendly Texas Railroad Commission would do abetter job of determining the fees the energy companies pay intothe state’s Oilfield Cleanup Fund — but it needs to beef up itsrole in regulating pipelines — according to a report by the TexasSunset Advisory Commission. Some of the criticisms noted areexpected to be corrected in pending proposals at TRC.

The industry-friendly Texas Railroad Commission would do abetter job of determining the fees the energy companies pay intothe state’s Oilfield Cleanup Fund — but it needs to beef up itsrole in regulating pipelines — according to a report by the TexasSunset Advisory Commission. Some of the criticisms noted areexpected to be corrected in pending proposals at TRC.

Industrial gas users want to “comment” on the revised and newGas Industry Standards Board’s (GISB) standards that FERC proposedfor adoption in December, but there’s only one problem – they don’tknow what they are. The Commission apparently doesn’t have a copyof the proposed changes on file, they said, and to get them fromthe standards-setting organization could cost the tidy sum of$3,500.

Industrial gas users want to “comment” on the revised and newGas Industry Standards Board’s (GISB) standards that FERC proposedfor adoption in December, but there’s only one problem – they don’tknow what they are. The Commission apparently doesn’t have a copyof the proposed changes on file, they said, and to get them fromthe standards-setting organization could cost up to $3,500.

There’s no doubt about it, times are tough in the midstream gasbusiness. Depressed NGL prices and unfavorable margins have kept atleast one player from selling its assets while the same factorscaused another to seriously rethink the wisdom of a recentpurchase. Executives and analysts predict a lot more horse tradingof properties as companies look to rationalize assets and buildpositions for better times (hopefully) ahead.