Game

Illinois Power, now a subsidiary of leading marketer DynegyCorp., is changing its game plan, telling regulators it wants todrop out of the more conservative Midwest Independent SystemOperator (MISO) to join the Alliance Regional Transmission Operator(Alliance RTO).

Retracing an early round of profit-taking, natural gas futuresclawed their way higher Friday as traders put the finishing toucheson a week in which prices not only notched a new life-of-contracthigh at $3.385, but also posted a fresh prompt contract 30-monthhigh. With Friday’s 0.2-cent increase, the June contract advancedeach day to gain 32.9 cents for the week. June finished at $3.354amid light estimated volume of just 54,639.

Fresh off its purchase of Sonat Inc., El Paso Energy Corp.re-entered the consolidation game by announcing plans to merge withCoastal Corp. in a $16 billion deal. The potential union wouldcreate a pipeline empire capable of serving almost all of the majormarkets in the country. The companies expect the transaction,accounted for as a pooling of interests, to be completed by thefourth quarter of this year.

Fresh off its purchase of Sonat Inc., El Paso Energy Corp.re-entered the consolidation game by merging with Coastal Corp. ina $16 billion deal announced Tuesday. The potential union wouldcreate a pipeline empire capable of serving almost all of the majormarkets in the country. The companies expect the transaction,accounted for as a pooling of interest, to be completed by thefourth quarter of this year.

Sempra Energy of San Diego, CA, will be the only game in town for gas distribution in Nova Scotia for at least 25 years now that it has the provincial government’s permission to build and operate the largest new North American gas distribution system of the last 30 years.

Sempra Energy of San Diego, CA, will be the only game in townfor gas distribution in Nova Scotia for at least 25 now that it hasthe provincial government’s permission to build and operate thelargest new North American gas distribution system of the last 30years.

“You can’t win the game if you give the ball away” was aseemingly logical but somewhat superfluous observation made byHoward Cosell on Monday Night Football back in the 1980s. If Cosellwere to have commented on the natural gas futures market yesterday,he probably would have said something like, “The market couldn’tmove lower because there was no additional selling.” And althoughthat comment would also have been redundant, it aptly describes thenature of yesterday’s price action at the New York MercantileExchange, where once early selling dried up, the market was free tobubble higher in near-frictionless trade. The May contract finishedup 3.2 cents to $2.128.

BC Gas said it thinks its Southern Crossing Pipeline is now a gosince it reached agreement on terms with BC Hydro for firm capacity onthe proposed pipeline and peak-shaving to be provided to BC Gas by BCHydro. In April, the British Columbia Utilities Commission (BCUC)voted down the $350 million Southern Crossing Pipeline paralleling theexisting BC Gas mainline in southern British Columbia between Yahk andOliver (see Daily GPI April 8, 1998). BCGas plans to re-file today with the BCUC and said it has anothershipper in addition to BC Hydro.

Bigtime volatility was the name of the game Friday in the cashmarket. Price changes ranged from more than 20 cents higher at manyLouisiana points to about a nickel lower in Northern California.Ranges often were huge also, exceeding 30 cents in some cases. Anypoint with a high and low separated by less than a dime-well, theyjust weren’t trying hard enough, one source commented.