Industry Briefs

TXU of Dallas agreed to sell its majority interest in a MexicoCity gas distribution system to Gas Natural and Hidroelectrica delCantabrico for $68 million. Gas Natural will become operator whenthe deal closes, which is expected later this year.

March 30, 2000

El Paso’s Lateral to Mexico Gets FERC Stamp

The Federal Energy Regulatory Commission (FERC) last weekapproved construction of a proposed 60-mile, 130 MMcf/d pipelinelateral off El Paso’s mainline in Arizona to proposed Mexicanborder crossing facilities. The proposed $30 million pipe andborder crossing facilities are designed to serve several existingand proposed gas-fired power plants in Sonora.

February 14, 2000

El Paso’s Lateral to Mexico Gets FERC Stamp

The Federal Energy Regulatory Commission (FERC) approvedconstruction of a proposed 60-mile, 130 MMcf/d pipeline lateral offEl Paso’s mainline in Arizona to proposed Mexican border crossingfacilities. The proposed $30 million pipe and border crossingfacilities are designed to serve several existing and proposedgas-fired power plants in Sonora.

February 10, 2000

GPM Buying Kinder Morgan NM Gathering Assets

Kinder Morgan Inc. agreed to sell the capital stock of MidCon Gas Products of New Mexico Corp., a wholly owned subsidiary, to GPM Gas Corp., a unit of Phillips Petroleum, for $20 million in cash. Closing is expected by year-end. MidCon Gas Products owns the Big Eddy and Logans Draw gathering systems in Eddy County, NM. The combined systems include 159 miles of four- to ten-inch pipe with average throughput of 50 MMcf/d. Richard D. Kinder, CEO, said the sale is part of Houston-based Kinder Morgan’s back to basics strategy to divest of non-core assets. Sale proceeds will reduce debt.

December 27, 1999

Industry Briefs

Reliant Energy International Inc. said it has sold its 50%indirect interest in a natural gas distribution company alongMexico’s Gulf Coast. Tractebel purchased Gas Natural de Rio Panucofrom an indirect subsidiary of Reliant and its Mexican partner,Corporacion Gutsa SA de CV (Gutsa) for $8.5 million. NorAm Energy,which was acquired by Reliant Energy in August 1997, partnered withGutsa to win a 30-year concession to build, operate and maintain anatural gas system in the northeastern Mexican state of Tamaulipas.The area includes the cities of Tampico, Ciudad Madero andAltamira, which lie in the Panuco River Basin, and has a totalpopulation of one million.

November 29, 1999

Gulf RIK to Begin With 260 MMcf/d

The federal government will begin accepting royalty-in-kind(RIK) for some Gulf of Mexico gas production beginning Dec. 1 inwhat will be the Minerals Management Service’s (MMS) third ongoingRIK pilot.

October 11, 1999

MMS Beginning RIK Pilot in the GOM

The Department of the Interior’s Minerals Management Service(MMS) is beginning its third royalty-in-kind (RIK) pilot, puttingit in the business of selling Gulf of Mexico (GOM) gas productionit accepts in place of cash royalties. The pilot is intended totest a different approach to RIK, using a competitive auction tomove up to 260 MMBtu/d initially.

October 8, 1999

Industry Briefs

Coastal Oil & Gas and Santa Fe Snyder have exchangedproperties in Utah, Wyoming, Texas and the Gulf of Mexico “toconsolidate assets into core areas for each company. Coastalreceived interests in six GOM blocks, plus the Jeffress Field inSouth Texas and 97,000 acres in Uintah and Duchense Counties inUtah. Coastal also received a cash payment of $18 million. Santa FeSnyder received interests in 22 Wyoming fields in the Green RiverBasin and three units in Gaines County, TX, in the Permian Basin.

September 21, 1999

Bret Spares Western Gulf Producers

As Tropical Storm Bret was downgraded from hurricane statusMonday, offshore producers in the western region of the Gulf ofMexico breathed a major sigh of relief. Their personnel andplatform facilities had completely escaped Bret’s wrath over theweekend, with producers reporting no damages and only nominalvolumes of shut-in production.

August 24, 1999

Questar Expects Southern Trails Delay

The proposed Southern Trails Pipeline from the Paradox Basin ofNew Mexico to Long Beach, CA, could be delayed three to six monthsbecause of additional environmental assessment work underway aspart the federal and state regulatory processes, according to aSalt Lake City-based spokesperson for Questar Corp., which boughtthe pipeline for $40 million last year from ARCO. Nevertheless, theconverted 700-mile pipeline should be bringing 120 to 130 MMcf/d ofgas into California by the end of next year at the latest.

August 23, 1999