Monday

Natural gas futures trading at the New York Mercantile Exchangestarted the week slightly on the down side Monday, as bearishfundamentals once again set the tone for a weaker trading session.The March Futures contract opened down 4.2 cents from Friday’ssettle, and continued the day trading in a tight 5-cent range toclose down 3.3 cents at $1.744. “As far as fundamentals areconcerned, the outlook looks bearish for this contract,” one tradersaid. “You have extremely mild weather and no support at Nymex and,certainly, storage numbers are still significant.”

TransCanada Pipelines Monday canceled part of its C$403 millionsystem expansion project on its Canadian Mainline because of aninability to resolve negotiations with a local tribe of Indians,yet the pipeline company insists other parts of the expansion willcontinue. TransCanada would not disclose the nature of thedisagreement except to say the parties could not resolve aboriginaland treaty rights issues as well as future economic opportunityissues.

Due to one of the largest storage systems in the country andgenerally low gas prices, East Ohio Gas said Monday that itscustomers will achieve 16% in gas cost savings over the next threemonths compared to the same time last year. Officials for theutility said that its customers will be charged a rate of $3.28 perMcf for the next three months, compared to $3.89 Mcf over the sameperiod in 1998.

Equitable Resources revealed its 1999 capital budget Monday,demonstrating its dedication to focusing on only its coreAppalachia production and gas utility businesses. Equitable’s 1999spending plan for its four main divisions, Equitable Production,Utilities, Services, and its corporate group, adds up to $119million, representing a $64 million decrease from 1998. Theproduction unit was allocated 54% of the budget, down 21% from theyear before.

Miller Petroleum Inc. announced Monday that it finished thetransportation system for what it calls the first commercialcoalbed methane project in Kentucky. The Huntsville,Tennessee-based company completed and started service on a 4.5mile, six-inch pipeline extension that draws 200-220 Mcf/d fromfour coalbed methane wells located in southeastern Kentucky. Thegas, which the company said rates 980 Btu/Mcf, will be injectedinto the Columbia pipeline system and sold by a third party. Fortymore wells are scheduled to be drilled on this site in 1999. Thecompany estimates the finding cost for the project to average$.35/Mcf.

Unocal Corp. said Monday it expects 1999 capital spending tototal between $1 billion and $1.1 billion, down from the estimated$1.7 billion in capital expenditures this year. The lower spendingreflects Unocal’s narrowed focus on core oil and gas explorationand production in response to lower commodity prices.

CMS Energy Corp. added to its retail energy marketing businessMonday by purchasing the western Pennsylvania natural gas marketingassets of Enerval, L.L.C., an energy marketing firm with more than250 commercial and industrial customers in that region. Enerval isan indirect subsidiary of Conectiv, the holding company formed inMarch 1998 through the merger of Atlantic City Electric andDelmarva Power and Light. Terms of the purchase were not disclosed.

Cash prices kept climbing higher Tuesday, though not at thedazzling rate of Monday’s run-up. New gains of 20-40 cents at manypoints were still pretty impressive, though.

Gregory Power Partners (GPP), a joint venture between LG&EPower and Columbia Energy’s Columbia Electric Corp., securedfinancing Monday for a new gas-fired co-generation project nearGregory, TX, allowing the partnership to proceed with powercontract obligations with Reynolds Metal Co., the second largestU.S. aluminum producer. Terms of the financing were not disclosed.