Report

For the second Monday in a row the futures market kicked off theweek with a lower open, which featured bears as the earlyaggressors. That, however, is where the similarities between thetwo weeks ended. Whereas prices continued down the slippery slopelast Monday, yesterday’s trend was almost a straight line higher.Sources said a number of factors-technical short-covering,supportive weather forecasts and even a boost from the nearby crudeoil trading pit-were reasons for the 7-cent gain to $1.769 in Aprilfutures yesterday.

A group of producers and marketers said it backs the “general[policy] objectives” on offshore regulation that were espoused lastmonth by Energy Secretary Bill Richardson in a letter to FERC, butstresses that debate over the “key issue” of the jurisdictionalstatus of offshore natural gas pipelines involves “a legal, not apolicy” matter.

Public Service Co. of New Mexico (PNM) said it embarked on a$17.3 million stock repurchase plan last week after announcing theNew Mexico Supreme Court rejected a $112 million rate cut imposedby the state’s outgoing Public Utility Commission (PUC) late lastyear.

CMS Gas Transmission and Storage Co. said the Fort Union GasGathering partnership has secured all of the rights-of-waynecessary to construct its planned 106-mile natural gas gatheringsystem in the Powder River Basin of Wyoming. CMS is the managingmember in the partnership, which also includes Enron Capital &ampTrade Resources Corp., Western Gas Resources and CIG Resources Co.

Energy.com and Columbia Gas of Ohio have teamed up to enableColumbia Gas customers to switch suppliers online from theEnergy.com web site as part of the utility’s customer choiceprogram. It marks Energy.com’s entrance into active deregulationenrollment services, the company said.

Western-based El Paso Energy, which lassoed Tennessee Gas Pipeline and a route to New England three years ago, rode into the Southeast last week, announcing it will acquire Sonat and its Southern Natural Gas Pipeline in a $6 billion deal.

Tennessee Gas Pipeline filed a significantly scaled-down versionof its Eastern Express Project 2000 last week, reporting thateastern markets have been slow to develop and many New Englandpower generators believe it would be premature to sign long-termcontracts for firm gas transportation. The pipeline’s applicationwith FERC calls for the addition of only 168 MMcf/d of capacityalong the northernmost part of its system at a connection with theJoint Facilities of the PNGTS and Maritimes &amp Northeastpipelines.

Unconvinced that the latest uptick in domestic oil pricessignals a turnaround, domestic producers last week descended on theWhite House and Capitol Hill to make a direct pitch for marginalwell tax credits, exploration and production (E&ampP) incentivesand other economic reforms to boost the ailing oil and gasindustry.

The leaders of a major pipeline association and a key electricutility group jointly have expressed their support for FERC toconvene a conference “in the near future” to assess post-2000natural gas demand in the Northeast and the need for new pipelinecapacity to serve customers, particularly power generators, in thatmarket. Meanwhile, a new study sees no need for new capacity to theNortheast until 2004 (See related story this issue).