Pacific

A proposed settlement that calls for the restructuring of thetransportation and sales arrangements of Pacific InterstateTransmission (PITCO) is close at hand and could be filed at FERC assoon as today, says an official involved in the negotiations.

State regulators decided yesterday to perhaps up the ante inconsidering penalties against Pacific Gas and Electric Co. foralleged rules violations in advertising and promotion materials bysome of its unregulated energy affiliate companies.

The Australian-owned oil and gas company, Chancellor Group, saysit has signed a letter of intent to acquire from Union PacificResources a half-interest in the Deadwood Field in East Texas for$35 million. The announcement comes on the heels of one made lastFriday by UPR that it had agreed to sell its interests in certainSouth Texas oil and gas properties to Collins & Ware Inc. for$148 million.

The Australian-owned oil and gas company, Chancellor Group, saysit has signed a letter of intent to acquire from Union PacificResources a half-interest in the Deadwood Field in East Texas for$35 million. The announcement comes on the heels of one made lastFriday by UPR that it had agreed to sell its interests in certainSouth Texas oil and gas properties to Collins & Ware Inc. for$148 million.

Union Pacific Resources Group (UPR) continues to march aheadwith its de-leveraging program, announcing last week that it agreedto sell interests in certain South Texas oil and gas properties toCollins &amp Ware Inc. for $148 million. The sale is scheduled toclose Oct. 30, subject to conditions, with an effective date ofSept. 1.

FERC has approved a $6 million expansion of Pacific GasTransmission Northwest’s (PG&E GT-NW) system that will increasecapacity between Kingsgate, BC, and Stanfield, OR, by 56,000 Dth/dand provide additional systemwide winter capacity of 20,000 Dth/d.

Triple-digit temperatures throughout much of California inlandfrom the Pacific Coast spurred record energy demand, promptingstate and utility officials to call for voluntary cutbacks inelectricity usage on the eve of the Labor Day holiday weekend.Collectively, August turned out to be California’s hottest ever,further testing the reliability of the new power system in thestate.As Southern California Edison, San Diego Gas and Electricand the nation’s largest municipal utility, the City of Los AngelesDepartment of Water and Power, all registered record power demandMonday, a corresponding record for natural gas delivered toelectric generating plants was marked at Southern California Gas,which transports supplies to all three electric utilities. Gassupplies for power generation equaled 1.92 Bcf/d on Monday,surpassing a one-day record set Aug. 11, 1994 (1.877 Bcf), and aspokesperson for SoCalGas said with the prediction of more hotweather later in the week, “there is a chance we will surpass thenew record.”

Pacific Gas & Electric extended a low-inventory Stage 1 OFO(see Daily GPI, Sept. 1) through today. Penalties were unchanged,but the negative imbalance tolerance was tightened to 5%.

What was non-strategic to Union Pacific Resources (UPR) provedto be a good fit with core business for Enron Oil and Gas (EOG).UPR sold its 19% non-operated working interest in the MatagordaIsland Block 623 Field and surrounding blocks to Enron Oil and Gasfor $158 million. The deal will close Aug. 31 with an effectivedate of June 1.