Process

PennzEnergy Co. – recently formed when Pennzoil Products Groupwas spun off to merge with Quaker State – is in the process ofreactivating its onshore U.S. operations and tip-toeing deeper intothe Gulf of Mexico. PennzEnergy operations are focused on threeareas: domestic onshore, domestic offshore, and international.Operations are in the in East and West Texas, on and offshore Gulfof Mexico, and in Egypt, Azerbaijan, and Venezuela.

Mexico’s Energy Regulatory Commission (CRE) issued the Queretarogas distribution permit to Belgian electric utility Tractebel.Tractebel was awarded the permit as a result of the bid processundertaken by the CRE for the geographic zone, which comprises themetropolitan area of Queretaro, as well as the city of San Juan delRio.

Westcoast Energy Inc. last week challenged BC Gas’ request for an abbreviated approval process for the Southern Crossing pipeline proposal and called for a full public review of the re-filed proposal by BC Gas to build a $350 million pipeline across Southern British Columbia. Westcoast maintains the Southern Crossing project is too expensive and that there are other alternatives.

FERC’s let-the-market-decide approach for certificating newpipeline projects isn’t well suited for all cases, said a leadingenergy attorney last week. With some projects, it hasn’t been “goodenough so additional analysis [by FERC] might be required” before apipeline can win a certificate.

In another much-anticipated decision, FERC yesterday proposed anexpedited complaint process that would apply uniformly to all ofthe energy sectors that it regulates – natural gas pipelines,electric utilities, oil pipelines and hydroelectric concerns. Thecomplaint proposal, which was outlined in a notice of proposedrulemaking (NOPR), represented an “amalgam” of the best proposalsof the Interstate Natural Gas Association of America, the PipelineCustomer Coalition and the Electric Industry Dispute ResolutionWorking Group, said Chairman James Hoecker.

Frustration with the electric restructuring process may drivePacifiCorp to sell its service areas in California and Montana -two of the seven states where the company operates. The two statesrepresent about 76,000, or 5.5%, of PacifiCorp’s 1.4 million NorthAmerican customers.

Amoco’s Hugoton Jayhawk gas processing plant in Ulysses, KS,recently began operations with capability to process 450 MMcf/d andrecover up to 33,000 barrels of gas liquids per day. HugotonJayhawk currently is processing about 400 MMcf/d, of which 280MMcf/d is supplied by Amoco-operated wells.

Cash prices returned to a climbing mode Friday, and in theprocess won more converts to believing in a fundamentally stronggas market this spring and summer. Although Western gains tended tolag a bit behind, most increases were between a nickel and a dime.Most of the double-digit gains occurred in the Gulf Coast,Appalachian and Northeast market areas.