Increases

Disappointed by Southwest Gas’ board of directors’ decision toaccept Oneok’s $30/share merger offer over its own $32/share offer,Southern Union decided to up the ante late Tuesday by increasingits bid to $33.50/share. With the increase, Southern Union’s offernow exceeds Oneok’s by $108 million, Southern Union said.

Some sources seemed to think the cash market was manufacturingprice increases out of nothing Thursday. Others, however, said mildsupport from the futures trading pit combined with a cold frontmoving towards the East Coast to generate price firmness rangingfrom flat to up about a nickel. For a change there was nogeographic pattern in the market as the price gains tended to bescattered across all regions.

All-around price increases Wednesday received support fromcontrasting weather conditions and rising power generation load(plus a tiny assist from a barely higher screen). Most upticks werein the neighborhood of 4-8 cents, although smaller ones were aslittle as two cents at the PG&E citygate.

Increases of about a dime or more were common in the cash marketMonday. The upticks tended to be larger in the West, approaching 20cents in the California market and on some Rockies pipes. There wassome fundamental validation of Western firmness as the region wasunseasonably cool, especially in the Pacific Northwest, wheretemperatures were colder than in Alberta, a Calgary source said.

With little in the way of fundamental support to speak of, cashprices still managed gains between a nickel and a dime Tuesday atalmost every trading point. “It’s got to be technical,” said autility buyer. The tone was set by the screen opening around $1.80,a dime higher than Monday’s opening, even though the April contracteventually ended the day with a small net loss, he said. Anothersource thought it was a case of cash starting to converge with thescreen.

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% with gains of more than 100% not unusual. Total salesvolumes for the year for the top-20 gas marketers rose 17%, or 17Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market.

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% and gains of more than 100% not unusual. Total sales volumesfor the year for the top-20 gas marketers rose 17%, or 17 Bcf/d, to117 Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market. (See table, page 4)

CMS Energy’s subsidiary CMS Continental Natural Gas said it hascompleted the acquisition of a 750-mile gathering system in northcentral Texas from Koch Hydrocarbon Co. Terms of the deal were notdisclosed.

Washington Water Power’s (WWP) energy marketing affiliate,Avista Energy, embarked on a two-day expansion spree last week byacquiring Vitol Gas and Electric Co. and Coast Pacific ManagementCo., and in the process became a top-10 power marketer. Supportingthese additions is WWP’s joint venture with Cogentrix Energy Inc.,announced Dec. 11, to build or buy gas-fired electric generationprojects in the Pacific Northwest. Terms for deals were notdisclosed.