Report

Coastal’s Colorado Interstate Gas (CIG) is holding an openseason for a new interstate pipeline between its existing westernterminus in Uintah County, UT, and an interconnection with thePaiute Pipeline Co. system near Elko, NV. The pipe could becompetition to a project announced in January by Williams’Northwest Pipeline and Paiute.

FirstEnergy Corp. and Belden & Blake Corp. agreed to createa joint venture called FE Holdings to acquire natural gasproperties. The companies also agreed to buy privately held MarbelEnergy Corp., a fully integrated natural gas company. “The creationof FE Holdings – with access to low-cost, high-quality explorationand production capabilities combined with utility distribution andtransportation facilities – will produce tremendous opportunitiesfor our company, customers and shareholders,” said FirstEnergy CEOWillard R. Holland. “The ability to offer customers bothelectricity and natural gas, as well as a wide range of otherenergy-related products and services, will further enhance ourposition as a strong competitor in the evolving energy industry.”

A big shift in strategy led Equitable Resources to put some ofits most prized Gulf Coast midstream assets on the auction blocklast week. The company announced it is selling the 1,900-mileLouisiana Interstate Gas pipeline (including a 500 MMcf/dDepartment of Energy oil line it converted to transport naturalgas), the 3.6 Bcf capacity Jefferson Island salt dome storageproject and its gas and power marketing operation. The gasmarketing operation sold 500 Bcf of gas in 1997.

Shell Exploration & Production said it will spend nearly $1billion to develop three oil and gas discoveries that will add morethan 300 million Boe to the Gulf’s deep-water inventory. Thesethree projects, Angus, Europa and Macaroni, will increase thenumber of Shell working interest deep-water developments to 14, themost in the industry. Each project will be developed with subseasystems tied back to existing platforms.

Central Maine Power Co. and New York State Electric & Gas(NYSEG), have received conditional authorization to develop a planto settle one of the last frontiers of gas distribution, Maine, butBangor Gas, a joint venture between Energy Pacific and BangorHydro, may beat them to it. CMP Natural, the joint venture betweenCMP and NYSEG, received preliminary approval from the Maine PublicUtility Commission (MPUC) to serve 60 Maine communities withnatural gas but the PUC staff still has to review the details ofits business plan application and issue a draft order. That hasbeen done already for the Bangor Gas project, a smaller projectthat would serve the greater Bangor area. Bangor Gas partner BangorHydro has some concerns of its own, however.

Central Gulf of Mexico Lease Sale 169 wasn’t a record, unlikethe last few lease sales, but heavy bidding seems to indicate lowcrude oil prices have not affected the industry’s aggressivedrilling plans. The U.S. Department of the Interior’s MineralsManagement Service (MMS) reported receiving 1,188 bids on 794tracts offered Wednesday. A total of 87 companies participated inthe sale. All bids totaled nearly $1.35 billion, and high bidstotaled more than $810.4 million. Of 4,180 tracts offered, 794received bids with an average of 1.5 bids per tract. By comparison,Central Gulf Sale 166, which took place a year ago, generated morethan $824 million in high bids but on more tracts. Then, 1,032tracts received bids of 5,059 offered.

Enogex Interstate Transmission has filed an application withFERC to integrate and expand the recently purchased assets of OzarkGas Transmission, an interstate pipeline, and NOARK, an intrastate,into a new 749-mile Midcontinent interstate pipeline system. Theproject is designed to give NOARK customers greatly needed accessto new gas supplies, while providing Ozark shippers access todesperately needed new markets. Enogex, an interstate pipelinesubsidiary of Oklahoma City-based OGE Energy, recently purchasedOzark from NGC Corp. for more than $55 million and bought amajority interest in the NOARK Pipeline from Prudential Insuranceand a SEMCO Energy subsidiary for $30 million.

Beginning April 1, up to 100,000 Consumers Energy gas customersare going to be able to choose their supplier during the first yearof the company’s statewide Gas Customer Choice program. But whileConsumers said in February that 14 companies indicated they willcompete for customers, some on the list are turning up their noses,at least to residential customers.

Shell Oil Tuesday announced its designs on the retail gas andpower marketplace and said its Shell Energy Services willparticipate in the unbundling of Georgia’s Atlanta Gas Lightsystem. The company plans to serve residential and commercialcustomers. Other states Shell will target for retail sales are notyet known, but Shell Energy Services President Alan M. Raymond saidthe company is interested in California’s deregulated electricitymarket as well as competitive markets in the Northeast. “We will beapplying to become marketers in those states where the deregulationallows us to function, and then we’ll be setting up shop to appealto those customers.”