Massive

The massive Shell-led Sakhalin II oil and gas development project offshore Sakhalin Island in the Russian Far East is likely to be delivering liquefied natural gas (LNG) to the U.S. West Coast before the decade is over, according to Steve McVeigh, CEO of the Sakhalin Energy Investment Co.

In the wake of this summer’s massive blackout that swept across parts of eastern Canada, the Midwest and the Northeast, backers of a Lake Erie power cable project are urging stakeholders to take a closer look at the project’s potential upsides, both in terms of enhancing energy trading as well as boosting the reliability of the electricity grid.

The two federal judges in Houston and New York City who are overseeing Enron Corp.’s massive bankruptcy case ordered mediation last week in an attempt to clear some of litigation confronting the courts. In a joint hearing, Houston federal District Judge Melinda Harmon, who is handling shareholder lawsuits, and Manhattan federal Bankruptcy Judge Arthur J. Gonzalez, who is handling the overall Enron bankruptcy, ordered several parties to attempt settlements through a mediator. District Judge Kevin Duffy, located in Manhattan, agreed to serve as mediator, and Harmon and Gonzalez said in their joint order that the mediation results would be nonbinding, unless the parties otherwise agree. A spokesman for the University of California, the lead plaintiff in the shareholders’ lawsuit, said the university welcomed the courts’ action “to help speed restitution to those victimized in the Enron fraud.” Trey Davis added, “We will fight for our fair share during the mediation process and believe we are in a strong position to prevail on behalf of the shareholders.”

The two federal judges in Houston and New York City who are overseeing Enron Corp.’s massive bankruptcy case have ordered mediation in an attempt to clear some of the huge amount of litigation confronting the courts.

Duke Energy said it is selling its 50% stake in Foothills Pipe Lines to TransCanada PipeLines for $177 million (C$257 million), including $105 million (C$152 million) in Foothills debt. Duke obtained the Foothills interest when it purchased Westcoast Energy in 2002 (see Daily GPI, Sept. 21, 2001; Feb. 28, 2002).

Kern River Gas Transmission has requested final authorization from FERC to begin transportation services on its massive 2003 Expansion Project, which is expected to be ready for service on May 1. Company officials told the Commission on Monday that construction is on schedule and shippers need about seven days to line up gas supply and market commitments and make their nominations on the pipeline. Kern has asked for final FERC approval by April 21.

Lingering concerns in the minds of some investors as to whether American Electric Power (AEP) is facing a liquidity crunch should be eased in the wake of a recently close debt offering by four of the company’s subsidiaries that yielded more than $2 billion in proceeds, a top official with AEP told a gathering of investment professionals on Thursday.

Even prior to last week’s massive storage withdrawal of 162 Bcf and $5-plus January futures prices, the Energy Information Administration (EIA) had tacked on another 46 cents/Mcf to its first quarter 2003 natural gas wellhead price forecast compared to last month’s prediction in its Short-Term Energy Outlook. In the latest Outlook, EIA said it is expecting first quarter prices to average $4.16. It also raised its price forecast for all of next year to $3.69/Mcf from its prediction last month of $3.37.

Dynegy Inc.’s new-and-improved business plan is not enough cashflow wise to fully offset the massive amount of debt leveraging that carried over from its former business strategy, according to an analyst with Standard & Poor’s Ratings Services (S&P). The ratings agency last Tuesday cut the company and its subsidiaries another notch, to “B” from “B+”.