Purchased

KeySpan LNG LLC, a unit of KeySpan Energy Development Corp., announced Friday it purchased Duke Energy’s Algonquin liquefied natural gas (LNG) facility, which operates a 600,000-barrel storage and receiving terminal in Providence, RI, for an estimated $28 million.

A 14% rate increase to cover South Carolina Electric & Gas Co.’s (SCE&G) purchased gas costs, was approved by the South Carolina Public Service Commission. The Scana Corp. subsidiary said it is expecting sharply higher gas prices this winter to drive up wholesale purchase costs. The utility passes through to retail customers its cost of buying gas. “Natural gas prices on the wholesale market are expected to increase almost 20% in the coming months and that’s why this rate adjustment is necessary,” said Keller Kissam, SCE&G’s vice president of natural gas operations. Kissam cited the rising cost of oil and the forecasts for a colder than normal winter as reasons why wholesale costs are expected to be higher. SCE&G was granted an increase from 59.65 cents a therm to 72.79 cents per therm. The increase will appear on customer bills beginning in November. For a natural gas customer who uses 100 therms per month during the winter heating season, this means a monthly increase of $13.20 from $92.49 to $105.69. During the non-heating season, when typical usage is 25 therms a month, customers can expect to see monthly increases of about $3. SCE&G’s gas distribution system serves 267,000 customers in 34 counties of South Carolina.

KeySpan Energy affiliate Houston Exploration said it purchased 42 Bcfe of proved reserves in South Texas from subsidiaries of Burlington Resources for $48.1 million in cash. The producing and undeveloped properties total 24,800 gross acres in four fields in Webb, Jim Hogg, Wharton and Calhoun counties. The properties currently are producing 16 MMcfe/d. “Our expansion in South Texas is a direct result of our historical operating performance and the investment in 3-D technology that continues to improve drilling and development results,” said CEO William G. Hargett. “These new properties will continue providing operating efficiencies to our South Texas operations as they are adjacent to existing operations in the Charco Field.” The acquisition will increase Houston Exploration’s South Texas production by 15% to an average of 123 MMcfe/d and grow its total reserves by 10%. The 146 wells in the acquisition are located in the following fields: Northeast Thompsonville, South Laredo, McFarlan and Maude Traylor. The acquisition will be financed through cash flow from the company’s previously announced $250 million capital budget.

In a double swap of sorts, XTO Energy Inc. purchased some Powder River Basin properties from CMS Oil and Gas Co. for $100 million, then exchanged those properties with Marathon Oil Co., paying $164 million for natural gas-rich assets in East Texas, Louisiana and the San Juan Basin of New Mexico. All said and done, XTO’s transactions, expected to close May 1, will increase its daily production by 37 MMcf, 1,050 bbl of natural gas liquids and 120 bbl crude oil.

All of the climate trends pointed to this past winter as being especially cold, and the warm weather completely “baffled” one of the leading meteorologists in the country. However, the warm outcome only pointed to how difficult long-term seasonal forecasting is and how much is still being learned in making predictions, said Jon Davis, the chief meteorologist for Salomon Smith Barney on Wednesday at the GasMart/Power 2002 conference in Reno.

Aquila has scheduled three informational meetings on the open season that began earlier this month for its recently purchased Red Lake Gas Storage facility in Mohave County, AZ (see Daily GPI, Feb. 7). They will be held Feb. 27 in Los Angeles, Feb. 28 in Phoenix and March 1 in Houston. Reservations can be made via e-mail to Barbara Schulle (bschulle@utilicorp.com) or by phoning (713) 336-7493. For more information, call Mark D. Cook at (816) 527-1369 or visit the http://www.aquila.com/redlake web site.

Almost three months after TradeSpark LP lost half of its staff when the towers of the World Trade Center collapsed on Sept. 11, the company reported that it has seen steady growth in activity and participants on its electronic energy marketplace for the trading of a variety of energy products. In addition, the company said it saw a “significant jump” when EnronOnline went offline last week.

TECO Energy’s energy services subsidiary, TECO Solutions, has purchased Prior Energy Corp., a mid-sized southeastern energy marketing firm, from Prior Chemical, a subsidiary of ICC Industries. Terms of the deal were not disclosed. The acquisition is expected to be neutral to TECO’s earnings in 2001 and slightly accretive in 2002. It also will significantly expand TECO’s marketing operations in the Southeast and Gulf Coast regions.

TECO Energy’s energy services subsidiary, TECO Solutions, has purchased Prior Energy Corp., a mid-sized southeastern energy marketing firm, from Prior Chemical, a subsidiary of ICC Industries. Terms of the deal were not disclosed. The acquisition is expected to be neutral to TECO’s earnings in 2001 and slightly accretive in 2002. It also will significantly expand TECO’s marketing operations in the Southeast and Gulf Coast regions.