Signs

The industry’s hunt for natural gas has gone way beyond thesearch for oil and shows no signs of letting up. Gas directeddrilling has held a solid 80% of all U.S. drilling by rotary rigssince mid-July. And last week the number of rotary rigs drillingfor gas leaped to 609 from 579 the week prior, while total rigsrose to 750 from 721, the largest weekly gain since Nov. 28, 1997,according to Baker Hughes. Oil-directed drilling declined duringthe week by one rig to 139.

The industry’s hunt for natural gas has gone way beyond thesearch for oil and shows no signs of letting up. Gas directeddrilling has held a solid 80% of all U.S. drilling by rotary rigssince mid-July. And last week the number of rotary rigs drillingfor gas leaped to 609 from 579 the week prior, while total rigsrose to 750 from 721, the largest weekly gain since Nov. 28, 1997,according to Baker Hughes. Oil-directed drilling declined duringthe week by one rig to 139.

CMS Trunkline LNG Co. announced an agreement with Shell Oil’s Coral Energy Resources yesterday, paving the way for the CMS subsidiary to provide firm terminal service for 13 of Coral’s LNG cargoes in 2000 and 2001. Terms of the agreement were not disclosed. The first cargo is scheduled for delivery in January 2000.

California Gov. Gray Davis has signed a bill severely limitingthe future of retail gas unbundling in the state, keeping it on aseparate, more restricted track than electricity. AB 1421 replacesa one-year ban on further gas unbundling passed last year by thestate legislature. The measure was strongly backed byinvestor-owned utilities and utility unions.

California Gov. Gray Davis has signed a bill severely limitingthe future of retail gas unbundling in the state, keeping it on aseparate, more restricted track than electricity. AB 1421 replacesa one-year ban on further gas unbundling passed last year by thestate legislature. The measure was strongly backed byinvestor-owned utilities and utility unions (see Daily GPI, Sept.13).

New KN Energy chief Richard Kinder must have put the fear of God in the NGPL pipeline team. After years of pipeline underutilization and decontracting, NGPL locked in contracts last week for nearly all of its firm transportation capacity, just as shareholders of Kinder Morgan and KN were approving the $900 million stock-for-stock merger of the two companies. KN Energy’s transformation and recovery could be one of the fastest seen in the energy industry in a long time.

DukeSolutions, the energy services subsidiary of Duke Energy,was awarded as contract by the Veterans Integrated Services Network6 (VISN-6) to provide energy efficiency products and services ateight Veterans Affairs Medical Centers in Virginia, West Virginiaand North Carolina.

DukeSolutions, the energy services subsidiary of Duke Energy,was awarded as contract by the Veterans Integrated Services Network6 (VISN-6) to provide energy efficiency products and services ateight Veterans Affairs Medical Centers in Virginia, West Virginiaand North Carolina.

Sempra Energy Trading entered into a one-year, $30-$35 milliongas management contract with California’s Department of GeneralServices (DGS) yesterday. Under the terms of the contract, SempraEnergy Trading will provide natural gas management for a total of117 state government buildings including San FranciscoInternational Airport.