Partnership

Two former executives of Dynegy Inc. are heading up a new limited partnership that will acquire and control power and natural gas assets in the U.S. StoneCap Management LLC on Wednesday announced the formation of the StoneCap Group L.P., whose principals include Hugh Tarpley and Milton Scott.

Questar is buying CIG Overthrust Inc.’s 10% interest in the Overthrust Pipeline for $1.8 million, giving two Questar affiliates a combined 100% ownership interest in the pipeline partnership, which owns an 88-mile, 36-inch-diameter pipeline that transports about 227 MMcf/d of gas from the Whitney Canyon area north of Evanston, WY, to Rock Springs, WY. “Ownership of the Overthrust Pipeline will enhance the services we provide and give us more flexibility,” said Questar Pipeline President Nick Rose. “It is a natural fit for us with its location in our service territory and proximity to our facilities and supply sources.” Questar Pipeline designed and built the Overthrust system and has operated it since its completion in October 1982. In February, the company increased its ownership in the pipeline from 72% to 90% when it purchased the interest of NGPL Overthrust Inc. The Overthrust Pipeline is the westernmost segment of the 793-mile Trailblazer system, which runs from southwestern Wyoming to Beatrice, NE.

Questar is buying CIG Overthrust Inc.’s 10% interest in the Overthrust Pipeline for $1.8 million, giving two Questar affiliates a combined 100% ownership interest in the pipeline partnership, which owns an 88-mile, 36-inch-diameter pipeline that transports about 227 MMcf/d of gas from the Whitney Canyon area north of Evanston, WY, to Rock Springs, WY.

Kinder Morgan Inc. (KMI) and its master limited partnership Kinder Morgan Energy Partners LP (KMP) both expect to beat third-quarter consensus earnings estimates, management said Tuesday.

About 10 Tcf of gas stranded offshore Venezuela could be headed to the U.S. East Coast via liquefied natural gas (LNG) tanker starting in 2007, according to a new partnership formed by Venezuelan state-owned oil company Petroleos de Venezuela (PDVSA), Royal Dutch/Shell Group and Mitsubishi Corp. The companies signed an agreement to spend $2.5 billion on a new LNG project on the Paria peninsula. Construction is scheduled to begin in 2005 and be completed two years later.

Bridgeline Holdings LP, a partnership between Enron and Texaco, signed a deal to supply 165 Bcf of gas over five years to Occidental Chemical Corp.’s 778 MW cogeneration facilities in Taft, LA. Terms of the transaction were not released. Bridgeline operates 1,000 miles of pipeline from the Texas/Louisiana border to New Orleans, serving industrial and utility industry customers. It also has 13 Bcf of salt dome storage capacity in the region with broad access to significant Gulf of Mexico pipeline production and wellhead supply. Bridgeline said the deal is a key element in building on its strength to serve the new electrical generation demand throughout the region. This market requires firm, high-volume and deep-swing natural gas service to effectively meet the needs of this new class of merchant electricity generators. “We are eager to commence natural gas deliveries to the Taft facility and feel our unique combination of assets and merchant capabilities are well-positioned to serve this growing market,” stated Hugh H. Connett, vice president of marketing and supply for Bridgeline.

Hoping to take advantage of future volatility in the California gas and power markets, Aquila Inc. has formed a partnership with ArcLight Energy Partners Fund to purchase Houston-based Western Hub Properties LLC for $220 million. Western Hub is a natural gas storage development company that owns the proposed Lodi Gas Storage facility near Sacramento as well as rights to other potential storage sites near Bakersfield, CA, and San Antonio, TX. The acquisition is subject to the approval of the California Public Utilities Commission.

Hoping to take advantage of future volatility in the California gas and power markets, Aquila Inc. has formed a partnership with ArcLight Energy Partners Fund to purchase Houston-based Western Hub Properties LLC for $220 million. Western Hub is a natural gas storage development company that owns the proposed Lodi Gas Storage facility near Sacramento as well as rights to other potential storage sites. The acquisition is subject to the approval of the California Public Utilities Commission.

Following years of planning, Eastern North Carolina Natural Gas Co. (ENCNG), a non-profit partnership between the Albemarle Pamlico Economic Development Corporation (APEC) and Raleigh, NC-based Progress Energy, reported that their long-awaited gas supply project to residential, commercial and industrial consumers across a 14-county section of eastern North Carolina is under way.