News

Texas Utilities Co. Tuesday acquired 72,560,178 Energy GroupShares at 840 pence/share, representing about 13.9% of The EnergyGroup’s issued share capital. The 840 pence/share offer was thelatest in the bidding war between TXU and PacifiCorp for theBritish Utility.

El Paso Energy CEO William A. Wise calls his company’s latestplanned acquisition the “yellow brick road” to deep-water Gulf ofMexico gas development. El Paso said it will buy DeepTechInternational’s interests in Leviathan Gas Pipeline through aseries of transactions worth about $450 million. Leviathan GasPipeline Partners produces, processes, gathers, transports andmarkets oil and gas in the offshore Gulf of Mexico.

Halliburton Co. and Dresser Industries announced a $7.7 billionmerger agreement yesterday that will create the world’s largestdrilling and energy engineering company with combined 1997 revenuesof $16 billion and combined market capitalization of over $19billion. The firm, which will retain the Halliburton name will have100,000 employees worldwide. It will be based in Dallas, TX.

The controversy over the terms and conditions of the contractsgiving Natural Gas Clearinghouse a large bite of the westboundtransportation capacity on El Paso Natural Gas – capacity that wasdestined to be turned back to the pipeline at the end of last year- is expected to take center stage at FERC next week. Marketers andproducers say they plan to make a case that the contracts areanticompetitive and contain illegal negotiated terms andconditions, and are responsible for the run-up in transportationrates on El Paso’s system to the California border.

The Williams Companies Thursday said its shareholders and thoseof MAPCO approved measures necessary to complete Williams’non-taxable, stock-for-stock acquisition of MAPCO. Federal TradeCommission clearance is expected in time for a first-quarterclosing. Thursday, Williams shareholders approved a charteramendment to provide sufficient common shares and authorizedWilliams’ board of directors to issue stock to MAPCO shareholders.

FERC approved the divestiture-sale of most of the non-nucleargeneration assets of New England Power Co. (NEPCO) and NarragansettElectric Co. to USGen New England Inc., an unregulated subsidiaryof PG&E Corp.

More than 250 commercial gas customers in the District ofColumbia will soon have the opportunity to choose a gas supplierother than Washington Gas. The District of Columbia Public ServiceCommission (PSC) approved the company’s request to offer choice inthe District to large commercial customers who use at least 60,000therms/year and who do not maintain an alternate to gas service.(60,000 therms is about 60 times what the average residentialheating customer uses annually.) Large interruptible customers whouse more than 250,000 therms annually have had supplier choicesince 1988.

Customer choice for all Pennsylvania natural gas customers couldbecome an option within the next few months, and the law thatemerges from the months of statehouse wrangling could add directionto unbundling activities in other states.

The way FERC figures pass-through of costs in oil pipeline ratecases could hamper future use of converted lines, according toCommissioner Linda T. Key Breathitt, who issued dissenting opinionsin two oil pipeline cases involving Rio Grande and LonghornPartners Pipelines [OR97-1-001 and OR95-7]. In both cases theCommission ruled that the companies would not be allowed to passthrough the full purchase price of the pipelines, only thedepreciated original cost of the line. “In an area where Congresshas asked us to exercise regulatory restraint we turn around andapply textbook principles in a manner that may discourage futureconversions of oil pipelines to new uses,” Breathitt said. Theorders examine the corporate relationships between the companies toarrive at the conclusion that the companies are selling assets tothemselves. But Breathitt believes arguments about corporate tiesin these cases don’t apply. She was joined by Commissioner CurtHebert.