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It’s been all talk but no action and as a result industryanalysts are starting to back away from rampant rumors of apotential merger between Southern Co. and El Paso Energy.

It’s funny how an extra hundred million dollars will get your attention. That’s what the board of directors of Southwest Gas Corp. have to contend with in the form of an unsolicited proposal from Southern Union Co., after they already had signed off on an offer from ONEOK Inc.

While the real price of other goods and services in the U.S.increased by 34% since 1987, the price of natural gas to consumershas decreased by an average 14%, from 1987 to 1997, according to areport used by the American Gas Association to show FERC thatretail unbundling is working. The distributors’ group told afederal/state regulatory policy conference Thursday the price toconsumers went from an average $4.47/Mcf in 1987 to $3.85 in 1997(all in 1997 $). Of that delivered price the total transportationand distribution cost to consumers went from $2.23 to $1.53, a 31%decline, AGA said, citing surveys by the Energy InformationAdministration. During the same period the wellhead price wentfrom $2.24 (in 1997 $) to $2.32 in 1997.

The slippery slope on which cash prices started sliding earlierthis week got steeper Thursday. As on Wednesday, the softness wasbeing felt in both the late-February incremental and March bidweekmarkets.

Too little, too late was the apt expression for the futuresmarket yesterday, which continued lower despite what someconsidered to be the most constructive fundamentals yet thiswinter. And so the April contract took a page out of the Marchcontract’s playbook, slipping 3.8 cents to $1.659 amid a tight,6-cent trading range. Estimated volume was high for the usuallyquiet day-after expiration with 65,714 contracts changing hands.

ONEOK Inc. is building up its midstream presence by agreeing toacquire all the Oklahoma midstream gas gathering and processingassets of Koch Midstream Enterprises for $285 million in cash.

The Portland Natural Gas Transmission System (PNGTS) andTransQuebec & Maritimes Pipeline (TQM) held a ribbon-cuttingceremony yesterday at the U.S./Canada border to announce completionof the first high-capacity gas pipeline to serve northern NewEngland. Commercial operations, however, are not expected to beginuntil March 6. And PNGTS probably will not be transporting its fullcertificated capacity of 178,000 MMBtu/d until the end of the year,said spokesman John Flumerfelt, because several of the power plantsand paper mills to be served by the pipeline are not completed.

Oklahoma Attorney General Drew Edmondson told the state’sCorporation Commission the proposal by Oklahoma Natural Gas (ONG)to combine deregulation with an ongoing rate case at the OCC is notin ratepayers’ best interest.

Despite three of Atlanta Gas Light’s nine gas customer poolssurpassing the Georgia Public Service Commission’s (GPSC)requirements to become fully competitive, the GPSC has decided notto move forward with the customer assignment process because ofplanned legislation that would declare Atlanta Gas Light’s (AGL)entire service territory competitive possibly as early as thisfall.