News

Many of the “incendiary” allegations arising from Natural GasClearinghouse’s (NGC) acquisition of 1.3 Bcf/d of firmtransportation capacity from El Paso Natural Gas – that thecontracted amount far exceeded NGC’s market needs, that NGC hasacquired monopoly control over pipeline capacity into California,that California border prices have shot up as a result, and thatthe contracts contain a “covenant” whereby NGC and El Paso haveagreed not to compete – have generated a lot of smoke, but no realfire, the Houston-based gas marketer says.

Warmer-than-normal weather caused Columbia Energy Group toreport first-quarter 1998 net income down from the same period lastyear. Results in the company’s marketing business were off sharplydue mainly to expenses.

Without giving specifics, the CEO of PG&E Corp.confirmedhe is looking to sell some of its recently acquiredmulti-billion-dollar gas and electric assets in the U.S. andAustralia later this year.

Stone & Webster Development and PP&L Global Inc. haveformed a joint venture to build a 250-500 MW gas-fired, merchantpower plant in Wallingford, CT to compete in the New Englandelectricity market. The partners have a signed “exclusivityagreement” with the city government of Wallingford to develop theproject on the site of a small oil-fired power plant theWallingford Department of Public Utilities (DPU) is retiring.

In a move that could be replicated as other states open theirelectric markets, Southern California Edison, the nation’s secondlargest electric utility, has purchased options on 740 Bcf offuture natural gas supplies for an undisclosed price as a means ofhedging against what is expected to be a highly volatile wholesaleprice for electricity in California’s newly established mandatorywholesale spot market, called the Power Exchange (PX).

Washington Gas is expanding its customer choice program inMaryland, targeting 100,000 residential customers or one-third ofthe total, and all of its 25,000 commercial customers in the state.The company said it received approval for the expansion from theMaryland Public Service Commission.

Inadequate reserve replacement last year should set off an alarmin the gas industry given continuing increases in gas demand,according to a new report by Arthur Andersen and John S. HeroldInc. Proved domestic gas reserves were essentially unchanged in1997 despite a 24% increase in extensions and discoveries to 10.1Tcf, the highest level of drillbit gas reserve additions in thefive-year study period, according to the study titled U.S. UpstreamPerformance Trends. The study noted, however, that negative reserverevisions of 1 Tcf, including a 623 Bcf downward revision by EEXCorp. and smaller downward revisions by Amoco, Mobil and PioneerNatural Resources, are included in the figures.

Northwest Natural Gas and NIPSCO subsidiary NI Energy Services(NESI) have combined Canadian exploration and productionsubsidiaries into one company, Canor Energy Ltd., to “ramp upgrowth prospects and increase competitiveness.” NW combinedsubsidiary Canor Energy with NESI’s Southlake Energy March 31through the purchase of Southlake’s stock in exchange for shares inCanor. The new Canor is 66% owned by NW Natural and 34% owned byNESI. The combined company has a production volume approaching4,000 boe/d. Natural gas equivalent reserves total more than 120Bcf.

Amoco’s $1.9 Billion North American exploration and productiondivestment to focus on top producing areas is nearly complete.”These divestments allow us to focus our resources on the mostpromising producing areas in our exploration and productionportfolio, which has given us a higher quality asset position inNorth America,” said L. Richard Flury, executive vice president forexploration and production. “We believe this rationalized assetposition is a step toward reaching our corporate goal of 15% returnon capital employed by 2001.”