Natural

Transportation Note

Pacific Gas & Electric said less than 1,000 of the more than60,000 customers who lost natural gas service last week in SantaCruz County, CA, were still without service Monday. A massivelandslide Wednesday had ruptured two main transmission pipelinesserving the county, which is southwest of San Jose. More than 600PG&E workers and another 190 from Southern California Gasworked thoughout the weekend to restore service. Facilities withhot showers were set up in two towns for those without gas to heatwater. It was PG&E’s largest gas restoration project since the1989 Loma Prieta earthquake caused severe damage to thedistribution system throughout Northern and Central California, thecompany said.

April 28, 1998

May Futures Tumble Below Major Support at $2.43

It has been argued the emergence of storage facilities in thenatural gas industry has robbed cash prices of some of theirvolatility during summers and winters and replaced it duringshoulder months. Perhaps a similar affect has happened this pastyear because of mother nature. The El Ni¤o winter, which helpedkeep volatility in check this weekend, may very well be behind theextremely high volatility seen at the New York Mercantile Exchangethis past week.

April 23, 1998

PNGTS Work Site Dispute Settled

A U.S. federal court resolved a dispute between Portland NaturalGas Transmission System (PNGTS) and Central Maine Power (CMP) overthe use of a CMP right-of-way for the installation of PNGTS. PNGTSwas granted a motion for preliminary injunction filed against CMPin March. The court’s action gives PNGTS immediate possession ofthe property rights on CMP-owned electric transmission corridorsnecessary to install pipeline facilities approved by the FederalEnergy Regulatory Commission (FERC).

April 14, 1998

Market Thumbs Nose at NGC’s Capacity

No one stepped up to take either of the two 593,000 MMBtu/dpackages of El Paso Natural Gas transportation capacity NGC postedfor release over the past 10 days. One package was offered thoughthe end of April and the other through December 1999. Theycomprised 40% of the 1.3 Bcf/d NGC holds on El Paso and 80% of itsaccess to the San Juan Basin under the purchased contracts. NGC’sMike Flinn said market players missed a huge opportunity. One thatNGC isn’t likely to offer again.

April 13, 1998

$2.70s Too Much For May Futures

If bullish natural gas futures traders became excited when theMay contract moved above the $2.70 mark yesterday morning, theirenthusiasm was tempered following the spot month’s daily close of$2.689. Although this represents a daily gain of 2.1 cents, onetrader is concerned that futures prices will be falling in the daysto come. “I was hoping a break above $2.70 would lead to a move to$2.80, but traders seemed pretty quick to slam the door. It lookslike profit taking has started ahead of the long holiday weekend,”he said. The New York Mercantile Exchange will be closed for GoodFriday.

April 9, 1998

ONG Makes ‘Bold’ Proposal to OK Regulators

The way one observer sees it, Oklahoma Natural Gas and ONEOK GasTransportation can ask for whatever they want in their jointrestructuring filing with the Oklahoma Corporation Commission(OCC); they won’t get everything. “It’s a pretty bold proposal. Ican tell you, ONG’s not going to get what they filed for. If you’reasking for something, you might as well ask for the moon,” said thesource, who asked to be anonymous.

April 8, 1998

NGC Releases First Batch of El Paso Capacity

Under pressure at FERC for buying such a large chunk (40%) ofthe firm transportation capacity to California on El Paso NaturalGas, NGC Corp. announced late yesterday it is releasing 593,122MMBtu/d, or about 40% of the capacity it holds on the pipeline fora one-month term. It is the first quantity of transportationcapacity NGC has released since its negotiated contract with ElPaso became effective Jan. 1 and may appear to be a response toprotesters who have accused the marketing firm of withholdingwestbound capacity in order to prop up capacity prices. “It’spressure from the hearings at FERC last month,” said one observer.A spokeswoman had no comment on why the firm was releasing thecapacity. Demand remains strong in California despite the start ofa shoulder month. “Our goal is not to corner the market but ratherto use what we can,” one NGC marketer said cryptically.

April 7, 1998

New Rates Coming to TransCanada, Nova

Natural-gas shippers have again been promised they will gainfrom the proposed merger of TransCanada PipeLines Ltd. and NovaCorp., but not before a spell of increased tolls.

April 7, 1998

NEB Approves Upstream Link for PNGTS

The Canadian inlet to the proposed Portland Natural GasTransmission System has received approval from the National EnergyBoard, in time for completion on schedule this Nov. 1. Titled thePNGTS Extension, the route will be built by Trans Quebec &Maritimes Pipeline Inc. from a connection with the TransCanadasystem in eastern Quebec at Lachenaie to an exit into New Hampshireat East Hereford.

April 6, 1998

Watkins Crafts Tax Relief Bill for Producers

Rep. Wes Watkins (R-OK) introduced legislation Wednesday thatwould provide marginal well tax relief for oil and natural gasproducers. This is a “rifle shot approach,” and is not seen as acompanion to the measure on the same issue that Sen. Kay BaileyHutchinson (R-TX) is expected to sponsor later this week.

April 2, 1998