Reiterated

In the midst of much uncertainty surrounding California’s powersituation, Duke Energy North America Monday reiterated itscommitment to the state’s struggling wholesale electricity market,announcing new bilateral power deals with Pacific Gas and ElectricCo. and progress with redevelopment plans at three coastal powerplant sites it is operating.

Alliance CEO Dennis Cornelson reiterated yesterday he’s not theslightest bit concerned about upstream gas supply problems puttinga damper on Alliance throughput once the the pipeline isconstructed. “Thinking about that very issue over the years, Ithink that it’s clear that with the higher gas prices that arebeing realized and the relatively low prices for oil at this timethat there will be real focus on natural gas exploration anddevelopment over the next several years.

Union Pacific Resource has reiterated its intention to examine apossible sale of its gas gathering and processing business orselected non-core assets as part of a “deleveraging” programfollowing its recent $3.5 billion purchase (including assumption ofdebt) of Norcen Energy. At the time of the Norcen deal, UPR said itintended to sell $500-$700 million in assets to cut its debt toequity ratio, which ballooned to 73% following the Norcen deal fromabout 40%. But the company has valued its midstream assets, whichare located in Texas, Louisiana, Wyoming and Colorado, at about $2billion. The assets produced about $150 million in pretax operatingincome in 1997. The company has 25 operating plants and relatedpipeline facilities. A UPR spokesman said the company is justbeginning to evaluate its options but noted the market formidstream assets has been hot. UPR’s announcement follows similarplans announced recently by Aquila Gas Pipeline and EquitableResources. “These assets have been selling at a much higher cashflow multiple than E&P assets.”