Over

CNG Transmission Corp. last week called on FERC to dismiss thepending application of potential competitor Independence Pipeline,claiming that the 400-mile project was based on out-dated andfaulty demand projections for the Northeast gas market and lackedbinding precedent agreements. In addition, it said Independence hasdrawn “substantial opposition” from affected landowners andenvironmental groups.

CNG Transmission Corp. last week called on FERC to dismiss thepending application of potential competitor Independence Pipeline,claiming that the 400-mile project was based on out-dated andfaulty demand projections for the Northeast gas market and lackedbinding precedent agreements. In addition, it said Independence hasdrawn “substantial opposition” from affected landowners andenvironmental groups.

Cash numbers ranged from flat to just over a nickel higher at afew points Thursday, and sources were nearly unanimous inattributing the upticks mostly to the example set by the Henry Hubfutures contract. In turn, they thought the screen strength derivedfrom the fairly hefty 203 Bcf figure in AGA’s Wednesday afternoonreport on storage withdrawals last week.

Uncertainty over the treatment of municipal aggregation in NewJersey’s energy deregulation legislation caused the state’srestructuring bill to be bounced back and forth several times lastweek between the general assembly and senate, resulting in at leasta two-week delay before a final decision. The restructuring billprovides strict deadlines of Aug. 1 for statewide electric utilitygeneration unbundling, and Dec. 31 for statewide gas utility supplyunbundling. It is being reviewed by the assembly at the presenttime, and the next available voting session will take place Jan.28.

The futures market gave the impression it was heading higheryesterday when February opened at Tuesday’s high and quickly tradedto $1.85. But the selling dried up, leaving the market vulnerableto light selling for the rest of the session. The February contractclosed down 5.1 cents for the day at $1.77.

A battle over the role of municipal utilities in a deregulatedenergy market apparently stands in the way of final approval ofcomprehensive energy deregulation legislation in New Jersey.Tuesday, the state senate approved the bill, S5, containing anenergy deregulation package that would force the state’s gasindustry to allow supply competition statewide starting Dec. 31,and statewide electric generation competition starting August 1.The senate passed the bill by a margin of 28 to seven with threeabstentions and two senators not present. The bill then made itsway to the general assembly where, late Tuesday night, thelegislators amended it and sent it back to the senate.

The gas market actually did pretty well last year considering itwas the warmest year on record, but it may take an ice age toreduce the surplus storage gas bequeathed to 1999. Spotdelivered-to-pipeline gas prices averaged $2.02/MMBtu in 1998, down41 cents, or 17%, from 1997. Some points faired better than othersand the West generally did better than the East. Canada actuallycame out ahead.

TransCanada PipeLines plans to sell to the public 15.6 millionshares (excluding a 2.4 million over-allotment option) of a newlimited partnership formed to acquire and operate its U.S. pipelineinterests. The public offering would represent 78.2% of the totalinterest in the new TC PipeLines LP, which will own a 30% stake inthe recently expanded Northern Border Pipeline.

New pipeline development and expansions could add 16 Bcf/d ofcapacity to the national transmission network over the next twoyears (1999-2000) at an estimated cost of about $9.5 billion,according to a report by the Energy Information Administration.While all of the proposed projects may not be built, totalexpenditures are expected to far exceed the $5.1 billion investedduring the last major period of pipeline development in 1992-1993.