Republished

The pace of announced mergers and acquisitions (M&ampA) haspicked up steam in the last few weeks because electric utilitiesare realizing that the pool of potential natural gas targets isquickly dwindling, according to a Merrill Lynch &amp Co. report.

A Senate report’s conclusion that the natural gas and oilindustries aren’t likely to be ready for the computer-relatedsystem challenges of the Year 2000 is based on “out-of-date”information that “misses [the] significant progress the industrieshave made” during the past six months, said major industry tradegroups.

Independent producers plan to present a resolution later thismonth to congressional lawmakers and others in the federalgovernment seeking their support for measures to lift the oil andgas industry from its currently depressed state.

PG&ampE Corp. is consolidating overall management of its PacificNorthwest and Texas natural gas operations to gain someefficiencies and prepare for expanding into unspecified marketsthroughout North America. A total of about 100 positions, less than10% of the 1,000-person work force, will be eliminated from PG&ampEGas Transmission (PG&ampE GT)-spread equally among the Texas andPortland, OR, operations.

In an effort to attract large businesses to their districts, twoOregon state legislators introduced a bill recently that wouldprovide $20 million in lottery funds to help build a 64-milepipeline. No engineering study for the pipeline has been conductedso far. The bill’s main supporters, state Sen. Veral Tarno(R-Coquille) and Rep. Ken Messerle (R-Coos County), said some ofthe funds also could be used to build a high-voltage power line.

Reliant Energy, formerly Houston Industries, expanded itsMidwest retail gas marketing business with the acquisition ofcertain assets of National Energy Management LLC and Koch MidstreamServices Co.’s Chicago operation. Together, these retail marketingbusinesses serve more than 2,200 accounts in the Chicago andsouthern Wisconsin areas and have annual revenues exceeding $65million.

Thunder Creek Gas Services LLC, a joint venture of Devon EnergyCorp. and KN Energy, has begun construction of a 126-mile gasgathering system in the Powder River Basin of northeast Wyoming.The system is expected to be operational by fall at a total cost ofabout $100 million.

Electronic trading may be the antidote to anemic trading of theNew York Mercantile Exchange’s Alberta and Permian Basin gasfutures contracts, Exchange President R. Patrick Thompson said lastweek.

In an unusual step last week, FERC Chairman James Hoeckeroffered some advice to the industry negotiators who have beenmeeting in closed-door sessions to craft an agreement on the majornatural gas initiatives contained in the notice of proposedrulemaking (NOPR) and notice of inquiry (NOI).