Pipelines

After months of inconclusive sparring, TransCanada PipeLinesLtd. and its shippers have reached a truce by agreeing to negotiaterather than fight over ways to adapt to the onset of competition inCanadian natural-gas transportation.

TransCanada PipeLines is predicting earnings growth of between7% and 10% in 2001 based on stable revenue resulting from a newmainline transmission settlement, the performance of its powerbusiness, and projected cost savings from numerous divestitures,including a cut back in gas marketing.

While long-distance tolls continue to be hotly contested,TransCanada PipeLines Ltd. succeeded in reaching a settlement onkey basics that will let it set 2001-02 rates without a fight forits Nova grid in Alberta.

The Market Oversight and Enforcement Section of FERC’s Office ofGeneral Counsel has ordered Williams Gas Pipelines Central Inc. topay refunds and reduce its base tariff rates for customers servedby its Webb storage facility in Grant County, OK.

TransCanada PipeLines filed applications with the NationalEnergy Board and the Alberta Energy and Utilities Board last weekfor significant interim toll hikes on its Canadian Mainline andAlberta natural gas transmission systems. The requested tolls wouldgo into effect Jan. 1, 2001.

TransCanada PipeLines filed applications with the NationalEnergy Board and the Alberta Energy and Utilities Board yesterdayfor significant interim toll hikes on its Canadian Mainline andAlberta natural gas transmission systems. The requested tolls wouldgo into effect Jan. 1, 2001.

The Colorado Oil and Gas Commission says the state will issuemore than 1,400 permits for oil and gas drilling before the end ofthis year. In Wyoming, coal bed methane production has never beenmore active. The Rockies haven’t seen this much exploration sinceLewis and Clark were here. Today, the interest is underground, ascompanies map strategies to tap energy reserves.

After being on the divestiture road for almost a year andshedding $3 billion worth of non-core assets, TransCanada PipeLinesLtd., reported that its first nine months of 2000 and third quartershowed progress over the equivalent time periods of 1999. Netearnings before asset sales and long-term natural gas contractlosses were $433 million ($0.91 per share) for the first ninemonths of 2000, compared to $402 million ($0.86 per share) duringthe same period last year. The company attributed the 8% increaseto higher income from the power and gas marketing businesses aswell as reduced financial and preferred equity charges. Beforeadding special items, the company posted third quarter net earningsof $151 million ($0.32 per share), compared to $141 million ($0.30per share) for the third quarter of 1999.Deliveries of natural gason the Canadian Mainline and the BC system were approximately thesame for the first nine months of 2000 and 1999. The CanadianMainline delivered about 7.3 Bcf/d for both periods, while the BCsystem delivered approximately 1.1 Bcf/d. The Alberta system didexperience a decline. For the first nine months of 2000 itdelivered an average of 12.2 Bcf/d, compared with the same periodduring 1999 when it delivered 12.4 Bcf/d. Marketing also stumbled abit, as the company marketed about 6.1 Bcf/d for the first ninemonths of 2000, compared to 6.6 Bcf/d for the first nine months of1999. TransCanada took a beating on some long-term natural gascontracts it had entered into to support various pipelineinvestments and other business initiatives. Due to growing naturalgas demand in Alberta, and excess pipeline capacity leaving theprovince, the price differential between the Western CanadaSedimentary Basin and eastern market areas continued to shrink.TransCanada was forced to enter into third party arrangements tocrystallize the negative value of its long term natural gascontracts and the company reported taking a $124 million after-taxcharge associated with the losses.

TransCanada PipeLines Ltd. (TCPL) reported that it now expects proceeds from its non-core asset divestiture program to rise from the previous estimate of $3 billion to $3.45 billion. As a direct result of this, the company expects to record a positive $200 million after-tax adjustment to last year’s provision for discontinued operations in the third quarter of 2000.