Rights

It was a week late, but the American Gas Association reportedlast week that the industry put more gas in storage this year thanin any of the previous four years in which it has been conductingits storage survey. In a revision prompted by a change in totalworking gas capacity in the U.S., the AGA said on Nov. 6 there was3,127 Bcf of gas in storage, which is 58 Bcf more than the previouspeak set on Nov. 8, 1994 (See survey this issue).

Comments filed with the Maine Public Utility Commission showmarketers are opposed to all but the minimum registrationrequirements to participate in retail gas competition, while thestate’s new LDCs would like a significant amount of commissionoversight, particularly in the small customer market. The commentswere in response to the PUC’s Notice of Inquiry (NOI) into theRegulation of Gas Marketers, which was issued late last month.

A return to normal temperatures in the first quarter andthroughout next year is likely to lead to a 2.4% increase in gasdemand in 1999, the Independent Petroleum Association of America(IPAA) said in its November Short-Run Forecast. IPAA sees demandreaching 22.3 Tcf, a peak that surpasses the previous high of 22.1set in 1972 and a significant turnaround from the 1.1% decrease to21.7 Tcf of gas demand expected this year.

Seeking to become a “one-stop” energy shop and a larger regionalenergy company, Carolina Power and Light (CP&ampL) announced itsinitial entry into the gas industry with the acquisition of NorthCarolina Natural Gas (NCNG) through a stock-for-stock transactionworth $354 million. The agreement is still pending state regulatoryand shareholder approval, so no closing date has been announced.The acquisition reflects the strategy CP&ampL announced last Aprilto become “an organization with the potential to be a one-stopshopping service for our customers.”

The signing by the United States last week of the Kyotoagreement limiting greenhouse gas emissions elicited jeers onCapitol Hill and in some energy circles. The move was seen as “moreof a gesture of goodwill” to encourage commitments from developingcountries that are attending the conference now underway inArgentina, according to Capitol Hill and gas industry sources. Theyseriously doubt President Clinton will submit the controversialaccord to the Senate, which is sharply opposed to it.

In a move to strengthen its still under-performing Texas naturalgas assets, PG&ampE Corp. last week named Thomas B. King presidentand COO of unregulated subsidiary PG&ampE Gas Transmission, whichis based in Houston. King, formerly president of Kinder MorganEnergy Partners, takes on his new duties Nov. 23. He is filling aposition left vacant by the death of Joseph Kearney, a PG&ampEexecutive who suffered a heart attack in September. King will bereplaced at Kinder Morgan by Vice Chairman Bill Morgan.

Sheridan Energy Inc. intends to form a joint venture withAmerada Hess Corp. to explore, develop and produce from all ofHess’s Sacramento Basin, CA, gas properties. The joint venture willalso seek to explore, develop and produce oil and gas from otherHess U.S. onshore and offshore properties. Sheridan has agreed tocontribute $58 million and other considerations, and Hess willcontribute its California properties along with certain other U.S.properties. The agreement is subject to due diligence and customaryconditions. The parties intend to sign a definitive agreement, byDec. 15 and to close the transaction not later than Jan. 15.Sheridan anticipates financing its contribution through additionalbank borrowings, cash flow and third party debt or equityfinancing. Should a joint venture agreement not be reached,Sheridan will proceed to acquire the California properties for $58million, closing Jan. 15.

Two pipeline projects that were to provide takeaway capacityfrom the Chicago hub to the southern Wisconsin market have beenrebuffed by LDC customers there, causing the sponsors to cancel oneand place the other on indefinite hold.

KeySpan Energy Development has agreed to acquire a 50% interestin Gulf Canada Resources’ massive midstream gas business in westernCanada for US$189 million and form a new partnership governing GulfMidstream Services (GMS). The partnership will hold interests in 14gas processing plants that handle 1.4 Bcf/d, of which thepartnership’s share is about 750 MMcf/d. It also will hold all ofGulf’s western Canadian pipelines, storage, products facilities andgas and liquids marketing.