Remaining

A basis blowout of immense proportions has occurred between Rocky Mountain region supply basins and the Southern California border this month and it appears to be expanding as we enter August, leading to widespread speculation and controversy in the industry about its causes.

The final remaining maritime boundary treaty between Mexico andthe United States, signed Friday by President Clinton and MexicanPresident Ernesto Zedillo, will give Mexico nearly two-thirds of amineral-rich area that is thought to contain huge amounts ofuntapped oil and gas. Known as the Western Gap, the area has servedas a platform between both countries in the western gap of the Gulfof Mexico, beyond the 200-mile range that officially definesnational territories.

The final remaining maritime boundary treaty between Mexico andthe United States, which is expected to be signed by PresidentClinton and Mexican President Ernesto Zedillo this week, will giveMexico nearly two-thirds of a mineral-rich area that is thought tocontain huge amounts of untapped oil and gas. Known as the WesternGap, the area has served as a platform between both countries inthe western gap of the Gulf of Mexico, beyond the 200-mile rangethat officially defines national territories.

Sempra Energy’s San Diego Gas and Electric utility unit hasannounced a two-phase auction to sell its remaining 11 purchasepower contracts, which cost the utility nearly $500 million lastyear. The contracts include nine above-market qualifying facility(QF) deals totaling 207 MW; the other two contracts cover another175 MW.

FERC will address the remaining gas policy changes on its platebefore the end of the year, Chairman James J. Hoecker said lastweek, confirming what other commissioners have indicated recently.But some of the side dishes originally on the menu probably willnot show up at the table because most of the industry found themindigestible, Hoecker told attendees at the 55th annual meeting ofthe Interstate Natural Gas Association of America in Aventura, FL.A more market-oriented approach to regulation apparently is a tastethe industry and the Commission will have to acquire over time.

FERC will address the remaining gas policy changes on its platebefore the end of the year, Chairman James J. Hoecker saidyesterday, confirming what other commissioners have indicatedrecently. But some of the main dishes originally on the menuprobably will not show up at the table because most of the industryfound them indigestible, Hoecker told attendees at the 55th annualmeeting of the Interstate Natural Gas Association of America inAventura, FL.

Calpine Corp., Texas’ largest independent power producer,announced plans last week to build, own and operate an 800 MWnatural gas-fired cogeneration power plant at Bayer Corp.’schemical facility in Baytown, TX. Permitting for the $335 millionfacility is under way, the company said. The plant is expected tobegin commercial operation in late 2001.

Snyder Oil Corp. of Fort Worth, TX, completed the sale of itsremaining 55% interest in the Southeast Piceance Project innorthwestern Colorado to Ballard Petroleum LLC in a cashtransaction worth $28.8 million. The Piceance Project representsless than 5% of Snyder’s third quarter 1998 production and isestimated to represent 7% of its 1998 proven year-end reserves.

A newly released Gas Research Institute study examining theshift in perceptions of the U.S. gas resource base, titled”Changing Perceptions Of Remaining U.S. Conventional GasResources,” discusses how the move — from the shortage mentalityof the 1970s to today’s view that gas is abundantly available –has resulted from an interplay of factors. Factors discussedinclude increased exploration success rates in frontier plays,improved gas well recoveries and continued reserve appreciationactivity in existing fields. GRI, with Energy and EnvironmentalAnalysis Inc. of Arlington, VA, developed the study.