Prior

Expiration days are known for their unusualness, but perhaps noother day in the history of the New York Mercantile Exchange willmatch the one turned in yesterday. The last few days of trading hadbeen relatively tame, but a telephone glitch that knocked outcommunications on the floor of the Exchange (see “Phone Lines Dead; Nymex TradingDisrupted”) at approximately 1:50 EST forced many traders intotrading at prices and volumes “that they otherwise would not havedone,” a source told GPI. As a result of the madness, the Marchcontract finally left the board at $2.286, up an even 7.0 cents forthe day.

Surprise, even shock, are common reactions to what occurs on the New York Mercantile Exchange on expiration day of a spot month gas futures contract, but yesterday many natural gas traders must have come close to suicidal trauma. Not because of price volatility, however. At about 1:50 p.m. EST, someone at the Teleport Communications Group, the telephone carrier that serves the trading floors of the New York Mercantile Exchange, pulled the plug. All commodity trading, including of course gas futures, screeched to a halt, creating a hair-raising state of panic.

Williams’ field services unit has agreed to process 300 MMcf/dof gas for Exxon Company USA at its gas liquids extraction plant tobe built near Coden, AL. The deal is the largest processingcontract to date for the field services unit. The NGL extractionplant is expected to be in service by the first quarter of nextyear and will have 600 MMcf/d of inlet capacity. The Exxon gasrepresents dedicated production from multiple leases in the MobileBay area. Remaining plant capacity will be filled through theexpansion of the Transco Mobile Bay Lateral as well as other gasproduction currently flowing on the existing Transco pipeline. Aspokeswoman said the company expects to sign five or six morecontracts to handle gas at the new plant, which is expandable up toat least 900 MMcf/d.

California State University (CSU) and the University ofCalifornia (UC) signed up with Enron Energy Services (EES) forpower to serve all 22 CSI campuses and all nine UC campuses andother facilities. The deal is the largest direct-access electricenergy contract in the country, Enron said. The two institutionsare projected to save more than $15 million over the next fouryears.

Natural gas producers scored a victory Wednesday when FERC ruledthey could post surety bonds in lieu of multi-million dollarrefunds to customers that fast coming due on March 9th. The bondmethod guarantees that customers will receive their refundpayments, and it gives producers what they seek most – a delay inpaying out the amounts until disputes over the refunds calculationsare resolved. The downside of this option is that producers will berequired to continue paying interest on the refund principal aslong as the bond remains in effect. Producers also have thealternative of paying their refund amounts into escrow accounts.

FERC approved the divestiture-sale of most of the non-nucleargeneration assets of New England Power Co. (NEPCO) and NarragansettElectric Co. to USGen New England Inc., an unregulated subsidiaryof PG&E Corp.

Chicago’s Citizens Utility Board (CUB) announced it has signed asettlement agreement with Commonwealth Edison (ComEd) thatobligates the utility to terminate its controversial marketingprogram, which was designed to give the utility’s affiliatecompanies an edge in the coming competitive energy market.

EEX Corp. agreed to sell nearly all of its properties in EastTexas and North Louisiana, containing 250 Bcfe of proved naturalgas reserves, to Cross Timbers Oil Co. for $265 million. Theeffective date of the sale is Jan. 1, 1998 with closing expected inthe second quarter.

El Paso continued a 30 MMcf/d allocation of the San JuanCrossover through today due to unforeseen problems extendingmaintenance on the Laguna Station (Cibola County, NM) #3compressor. El Paso also postponed maintenance on the WendenStation (La Paz County, AZ) “A” turbine, which had been scheduledearlier this week, to March 16-18 to coincide with a total shutdownof the station March 17. Havasu Crossover capacity will be cut by80 MMcf/d on March 16 and 18 and by 150 MMcf/d on March 17.