Operations

The upper management at Kinder Morgan received a shake-upyesterday as P. Anthony Lannie was promoted to president of KinderMorgan’s power operations, C. Park Shaper was promoted to vicepresident and CFO and David Dehaemers moved from CFO to vicepresident of corporate development. Richard D. Kinder, CEO ofKinder Morgan, said the appointments strengthen the company’smanagement team. Lannie was president of Coral Energy Canada andsenior vice president and general counsel of Coral Energy, thedownstream gas and power segment of Shell Oil Co. Prior to joiningKinder Morgan, Shaper was president of Altair Corporation, afinancial services firm. He also was previously CFO of a divisionof First Data Corporation.

Fueled by rapid growth in its unregulated energy businesses andstrong performances by electric and gas transmission operations,Duke Energy reported record earnings for 1999. Before interest andtaxes (EBIT), Duke posted a gain of $2.8 billion before a $660million after-tax gain on the sale of the Midwest Pipelines and aone-time charge of $800 million at Duke Power. EBIT for 1998 was$2.6 billion. Duke Energy set another record for revenues in 1999,reaching $21.7 billion. Fourth quarter revenues increased 48%.

The Sable Offshore Energy Project has had to shut downproduction twice since starting operations Jan. 1. The firstincident occurred on Friday, Jan. 7, only a week after gas began toflow, when a sub-sea line started experiencing hydrate problems(essentially ice slug blockage). Then early last week the Sableprocessing plant onshore had to be evacuated because of a gas leakwarning. As of last Friday there was no prognosis on whenproduction would be restarted.

The Sable Offshore Energy Project had to shut down productiontwice since starting operations Jan. 1. The first incident occurredon Friday Jan. 7 only a week after gas began to flow when a subsealine started experiencing hydrate problems (essentially ice slugblockage). Then early last week the Sable processing plant onshorehad to be evacuated because of a gas leak warning. As of lastFriday there was no prognosis on when production would berestarted.

Westcoast CEO Michael Phelps announced that Irv Koop has beenappointed executive vice president of Westcoast Energy Inc. andpresident and CEO of pipelines and midstream operations. Inaddition to his ongoing responsibility of overseeing pipeline andfield services divisions, Koop will take on new responsibility forWestcoast Gas Services, Foothills Pipe Lines and other pipelines inwhich Westcoast Energy has an interest, such as Alliance andMaritimes & Northeast. Doug Haughey, previously executive vicepresident of Engage Energy. has been appointed president of thepipeline and field services divisions.

Southern Energy Inc., a unit of Southern Company named David T.Gallaspy CEO of its Southern Energy Texas/Louisiana division,managing power generation operations in Texas and directingbusiness development activities in the region. He also will remaina vice president of Southern Energy.

CMS Marketing, Services and Trading, (CMS-MST) has madesignificant additions to its energy services operations recently,signing a five-year energy management agreement with Chicago-basedBank One Corp. last week and expanding its national presencethrough the purchase of Viron Corp. from York International in lateSeptember.

Amidst major merger rumors, Phillips Petroleum focused on itsown operations yesterday, as it announced a 50% acquisition ofYates Petroleum Co.’s coalbed methane acreage in Wyoming’s PowderRiver Basin. Financial terms were not disclosed.

Continuing the expansion beyond its core utility operations,FirstEnergy Corp. made a splash in the unregulated sector last weekwhen its energy services marketing arm, FirstEnergy Services,announced a management and supply deal with Republic TechnologiesInternational, Inc. (RTI), one of the largest producers of specialbar-quality steel products in the U.S. The deal, which is thelargest service agreement FirstEnergy has ever signed, couldproduce more than $1 billion in commodity and energy service salesover the span of the five-year contract.