What

After wrangling over who would take over whom, France’s largest oilcompany, TotalFina, and Elf Aquitaine agreed to merge in what thecompanies called an “amicable” deal. TotalFina agreed to improve theterms of its initial July 5 hostile offer for Elf that was worth about$43 billion. The move follows a counter-offer made by Elf forTotalFina (see Daily GPI, July 20).

What had seemed like a mildly softer early aftermarket in swingdeals done Tuesday got much weaker Wednesday. Influenced greatly bya falling screen but also by a continuing lack of positivefundamentals, nearly all points were down a dime or more. NorthernCalifornia was a rare bastion of relative market strength in theU.S. Malin and the PG&E citygate dropped only about a nickel asPG&E repeated last week’s unusual action of issuing alow-inventory OFO on a summer weekday.

While the Gas Research Institute maintains the most likelyfuture for natural gas includes low prices and a 31 Tcf market by2015, it is hedging its bets with a new study examining the outcomeif not all the expected pieces fall into place.

While the Gas Research Institute maintains the most likelyfuture for natural gas includes low prices and a 31 Tcf market by2015, it is hedging its bets with a new study examining the outcomeif not all the expected pieces fall into place.

In what appeared to be an unremarkable decision, FERC this weekrejected a proposal that would have allowed Transwestern Pipelineto negotiate and share in the revenues that shippers would receivefor releasing capacity on its system. But the ruling piqued theinterest of some, especially shippers that were caught in acapacity squeeze when Dynegy Inc. contracted for much of thecapacity on El Paso Natural Gas.

After three consecutive days marked by the bullish pattern ofhigher highs and higher lows, the futures market receded yesterdayon a wave of selling pressure by both commercial and local traders.June wilted into its daily close, tumbling 8.1 cents lower tofinish at $2.262.

The cash market began the week by posting small advances Mondayon top of what was considered abnormally strong Friday pricing fora lower-demand weekend. The new increases were small, though,rarely getting above 4 cents, and some points registered as flat.

Representing the latest curve on what has become a very windyroad, Southwest Gas announced Wednesday it is reviewing SouthernUnion’s revised merger offer even though it already entered into amerger agreement with Oneok earlier this week. With two offers onthe table, Southwest Gas has said it will not comment further onthe subject until a decision is made, and industry analysts say thedecision will not be easy.

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.