Serious

In a move that has similarities to the El Paso NaturalGas-Dynegy contract, KN Energy has overcome a seriousdecontracting/underutilization problem on Natural Gas PipelineCompany of America by awarding a two-year contract for 500,000MMBtu/d of firm transportation capacity to Chicago to AquilaEnergy.

In an effort to deal with the serious decontracting problem onits pipeline system caused by the addition of Northern Border’sChicago expansion and the Alliance Pipeline project, TransCanadasaid last week it is strongly considering filing an applicationwith the National Energy Board this month to raise the floor pricefor interruptible and short-term firm transportation service,something the pipeline’s shippers almost certainly will oppose.

In an effort to deal with the serious decontracting problem onits pipeline system caused by the addition of Northern Border’sChicago expansion and the Alliance Pipeline project, TransCanadasaid last week it is strongly considering filing an applicationwith the National Energy Board this month to increase itsinterruptible and short-term firm transportation rates, somethingthe pipeline’s shippers almost certainly will oppose.

FERC has warned it may dismiss Questar Pipeline’s applicationfor its Southern Trails Pipeline project into California if”serious deficiencies” with the filing aren’t corrected by the endof the month.

Major gas producers and marketers last week said they hadserious concerns about the auction concept raised by FERC in itsnotice of proposed rulemaking on short-term transportationcapacity, with some saying it would pose a logistical nightmare,threatening the reliability of the system and the seamless flow ofnatural gas.

Major gas producers and marketers last week said they hadserious concerns about the auction concept raised by FERC in itsnotice of proposed rulemaking on short-term transportationcapacity, with some saying it would pose a logistical nightmare,threatening the reliability of the system and the seamless flow ofnatural gas.

FERC dealt KN Interstate Gas Transmission a serious blow lastweek in ordering the pipeline to explain a 41% overrun in the costof its Pony Express Pipeline Project and prove the project stillmeets the Commission’s test for rolled-in rate treatment.

In a deal that could be the first of its kind in the nation,Pacific Gas and Electric is locked in serious negotiations withnorthern California natural gas producers to sell them itsextensive utility gas gathering system linked to in-state wells,most of which are in the dry gas fields of the greater SacramentoValley. The deal being sought, which is expected to take the betterpart of 1998 to gain final regulatory approvals, is an offshoot ofthe omnibus Gas Accord unbundled intrastate transmission andstorage services that start March 1. The parties will not put adollar value on the facilities involved in the negotiations, but itis conservatively estimated at tens-if not hundreds-of millions ofdollars, involving hundreds of miles of low- and medium-pressurepipelines and related gathering facilities linked to more than 100producers.