Several

Trunkline Gas Co. has indicated it has “entered into discussionswith several parties” to either sell or spin down one-third of itsmainline system – about 720 miles – for the purpose of convertingthe facilities for the transportation of refined petroleumproducts.

Despite failing this summer to deliver several high-profileenergy restructuring corrective laws, California’s statelegislature is expected to be the focal point of future energypolicymaking again next year, with more involvement from thegovernor’s office, according to a variety of energy expertsaddressing a two-day industry workshop in San Francisco.

The rumor mill produced some major headlines yesterday withseveral dominant players in the energy industry apparently inmerger talks. Unicom Corp., parent of Commonwealth Edison, and PECOEnergy Co. were reported to be in discussions about forming a”merger of equals,” while Chevron now has its eye on Phillips.

MCN Energy said last week deliberate financial miscalculationsby several former employees at CoEnergy trading, its unregulatedgas marketing subsidiary, led to a net loss of $2.7 million,significantly lower earnings in 1997 and 1998, and slightly higherearnings in 1Q99.

FERC sent one major Midwest-to-Northeast pipeline project backto the drawing board last week but gave another competing project afinal green light. The $447 million Vector Pipeline emergedvictorious, receiving FERC’s final approval and a presidentialpermit in a draft order, while the $400 million TriState Pipelinewas told it must redesign the pipeline-lease portion of itsproposal to get FERC’s rubber stamp.

Sen. Frank Murkowski (R-AK), chairman of the Senate Committee onEnergy and Natural Resources, consolidated several recentlegislative measures and a few new ones into two separate pieces oflegislation last week that could have a wide ranging impact on theexploration and production sector.

El Paso will shut down its Blanco (NM) Plant Monday forscheduled maintenance. Several other facilities on the San JuanCrossover and North Mainline also will have maintenance. Because atotal Blanco outage will last only half a day, the net reduction ofSan Juan Basin supply Monday will be 715 MMcf/d. Downtime of the Cand D units May 18-19 and of the D unit May 20-26 will causereductions of 500 MMcf/d and 270 MMcf/d respectively.

The potential for selling to several gas-fired merchant powerplants in the area is what prompted Denver-based Western GasResources to enter California’s increasingly crowded natural gasmarket by getting an option to buy a Shell-Mobil gathering anddelivery system in northern California. Included in the proposeddeal that should be wrapped up by year-end are 170 miles oftwo-inch- and 10-inch-diameter pipelines crossing more than a dozenlocal gas fields between the Sacramento Airport north of thecapital and the industrialized north Contra Costa County to thesouthwest, where there are substantial existing and proposed largeindustrial loads.

Several Wisconsin utilities and gas producers have asked FERC toplay it cautious when reviewing ANR Pipeline’s application for asecond capacity expansion of its existing system through northernIllinois and southern Wisconsin markets.