Shell Exploration & Production Co. (SEPCo) plans to moveforward with its 17th deepwater project while at the same timerededicating itself to a cost cutting program for its deep-wateractivity.
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Kern, Shippers Settle Rate Case Before it Begins
In a rare move that eliminates huge legal costs, Kern River GasTransmission has submitted to FERC a negotiated settlementagreement on its rate design prior to the start of a general ratecase (RP99-274). The agreement has the approval of all of itsshippers. Kern’s general rate case was scheduled to begin thismonth.
Industry Briefs
Semco Energy bought Iowa Pipelines Associates (IPA) for anundisclosed amount Monday, in the company’s initial move tostrengthen its gas construction services after exiting the gasmarketing business. IPA will continue to operate with its own name under the Semco Energy Ventures section of the company. Semco saidthe deal should close sometime this week. “By acquiring IowaPipeline Associates, we have expanded our capacity to providequality engineering and construction services for an ever-wideningcustomer base,” said William Johnson, Semco Energy’s CEO. Semcorevealed its strategy last month, when it sold its gas marketingassets to CoEnergy, an MCN affiliate, for an undisclosed amount.Johnson, said the sale allowed the company to concentrate onbecoming “one of the largest providers of underground engineeringand construction services in North America.” IPA builds undergroundnatural gas pipelines and local gas distribution networks forcustomers in Iowa, Kansas, Missouri, and Nebraska.
Kimball Trading Files for Bankruptcy
Houston-based Kimball Trading and Kimball Trading Canada ofCalgary, two of the Kimball Companies, last week filed for Chapter11 bankruptcy protection in Houston. The move caused marketrepercussions last Thursday, the day after the filing, as Kimballhalted gas flows to customers. The bankruptcy filings do notinvolve the related Kimball Resources or the other KimballCompanies.
Alliance: Lack of Takeaway Capacity Not a Problem
Some speculated Alliance Pipeline might be hurt by FERC’s movenot to issue preliminary determinations (PDs) to the four projectsthat would provide takeaway capacity for Canadian gas from Chicagoto East Coast markets. But Alliance officials last week quicklydismissed that notion.
Move to Upside Breaks Cash Flatness Pattern
Cash prices hinted Thursday that they’re not ready to settleinto the same kind of stagnation period that characterized much ofFebruary’s activity. Riding the momentum of a rising Henry Hubfutures contract, stronger crude oil futures (back over $13/bbl)and snowy weather in various regions, nearly all points roseanywhere from 2 cents to a dime with most increases in the vicinityof a nickel.
Dominion Buying Canadian Producer
Dominion Resources Inc. (DRI) made its third move of 1999 andits second in less than a week to position itself as a major gasand power player in the Northeast and Midwest. Following on theheels of Monday’s announcement that DRI will acquire ConsolidatedNatural Gas (CNG), subsidiary Dominion Energy said Wednesday itwill make a $34 million (C$50 million) cash offer for RemingtonEnergy Ltd., a publicly traded gas E&P company headquartered inCalgary, AB.
TX Producers Move Closer to Tax Relief
Texas producers laboring under the weight of low commodityprices are on their way to getting a temporary tax break from theTexas legislature. Last week, the Texas Senate passed S.B. 290,which grants a severance tax exemption to marginal gas and oilwells producing 90 Mcf/d or less or 15 barrels/d or less. Reliefwould kick in when gas drops below $1.80/MMBtu and/or oil dropsbelow $15/barrel for three consecutive months on the New YorkMercantile Exchange.
Hebert, Breathitt See ’98 as Year of ‘Openness’
One of the most significant regulatory events at FERC in 1998went by practically unnoticed: the word “proposed” was put backinto the notice of proposed rulemaking (NOPR), said CommissionerCurt Hebert Jr. in reflecting on his first full year at the agency.Commissioner Linda K. Breathitt, who also just ended her initialyear, agreed “proposed” took on a “stronger meaning” in a specificNOPR last year, but she hardly found it to be precedent-setting.
Both January and December Prices a Bit Firmer
Quotes for late December gas and the January bidweek tended tomove a few cents higher Wednesday. A Gulf Coast trader felt Januarycash had moved up about a nickel “in sympathy with the cold weathersweeping across most of the nation.”