Statement

The Federal Energy Regulatory Commission Friday and the Port of Long Beach issued a favorable joint draft environmental impact statement (DEIS) for the controversial liquefied natural gas (LNG) terminal planned for the Port of Long Beach, CA. The California Public Utilities Commission (CPUC) signaled earlier in the week that it is prepared to push FERC for an evidentiary hearing as part of the DEIS review.

FERC on Monday announced that a settlement was brokered with Reliant Energy to resolve claims stemming from its role in the 2000-2001 energy crisis on the West Coast.

The Coast Guard and the Maritime Administration (MARAD) issued a Federal Register notice on Friday announcing the availability of a draft environmental impact statement (DEIS) on Freeport-McMoRan Energy LLC’s proposed Main Pass Energy Hub liquefied natural gas (LNG) deepwater port license application. The port would be located in the Gulf of Mexico in Main Pass Lease Block 299 at a former sulphur mining facility about 16 miles southeast of Venice, LA, in a water depth of 210 feet. It would utilize four existing platforms, bridges and other structures and would include construction of two additional platforms to support LNG storage tanks (totaling 145,000 cubic meters) and a ship berthing area. The project also would include construction of 192 miles of 12-36 inch diameter pipelines. Main Pass Energy Hub would be developed over an existing salt formation in which storage caverns will be developed with a capacity to store 28 Bcf of natural gas. The terminal is expected to vaporize and deliver 1 Bcf/d of natural gas. Three public meetings will be held on the project on July 18, 19 and 20 in Alabama, Mississippi and Louisiana. A copy of the DEIS is available at http://dms.dot.gov under docket number 17696.

Occidental Petroleum’s proposed Ingleside, TX, LNG terminal and associated San Patricio Pipeline were granted a favorable final environmental impact statement (FEIS) on Friday by FERC. The Commission said the 1 Bcf/d terminal, which would be located near Occidental’s chemical plant on Corpus Christi Bay, would have limited adverse impact on the environment if certain recommended mitigating measures are taken by the company.

Occidental Petroleum’s proposed Ingleside, TX, LNG terminal and associated San Patricio Pipeline were granted a favorable final environmental impact statement (FEIS) on Friday by FERC. The Commission said the 1 Bcf/d terminal, which would be located near Occidental’s chemical plant on Corpus Christi Bay, would have limited adverse impact on the environment if certain recommended mitigating measures are taken by the company.

FERC last Wednesday adopted a policy statement allowing regulated energy companies, such as interstate natural gas pipelines and public utilities, that are partnerships to reflect actual or potential income tax liability in their cost-of-service rates.

FERC on Wednesday adopted a policy statement allowing regulated energy companies, such as interstate natural gas pipelines and public utilities, that are partnerships to reflect actual or potential income tax liability in their cost-of-service rates.

El Paso Corp. plans to restate its 4Q2003 and year-end 2003 consolidated statement of income to reclassify a deferred tax benefit related to its discontinued Canadian exploration and production operations. The restatement will not impact 2003 net income, earnings before income and taxes or cash flow, and will have no impact on financial statements for 2002 and 2004. It does increase the loss per share from continuing operations to $1.01/share from 87 cents/share. The Canadian E&P operations were classified as discontinued operations in 2004, and under generally accepted accounting principles, the financial statements for 2003 and 2002 were revised to reclassify revenue and expenses for these operations from continuing to discontinued operations. The revision, said El Paso, should have included an additional $82 million of deferred tax benefits associated with the sale that was reported in continuing operations in El Paso’s recently filed 2004 annual report on Form 10-K.

El Paso Corp. plans to restate its 4Q2003 and year-end 2003 consolidated statement of income to reclassify a deferred tax benefit related to its discontinued Canadian exploration and production operations. The restatement will not impact 2003 net income, earnings before income and taxes or cash flow, and will have no impact on financial statements for 2002 and 2004. It does increase the loss per share from continuing operations to $1.01/share from 87 cents/share. The Canadian E&P operations were classified as discontinued operations in 2004, and under generally accepted accounting principles, the financial statements for 2003 and 2002 were revised to reclassify revenue and expenses for these operations from continuing to discontinued operations. The revision, said El Paso, should have included an additional $82 million of deferred tax benefits associated with the sale that was reported in continuing operations in El Paso’s recently filed 2004 annual report on Form 10-K.