Customer choice for all Pennsylvania natural gas customers couldbecome an option within the next few months, and the law thatemerges from the months of statehouse wrangling could add directionto unbundling activities in other states.
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AGL Loses Large Buyer Discounting Privileges
The Georgia Public Service Commission has refused to approvethree industrial supply deals signed by Atlanta Gas Light becausethe LDC filed to become a part of Georgia’s competitive gas market.
FERC Examines Procedures
Fearing that it might be growing dusty and staid, FERC earlierthis month kicked off a three-month, all-encompassing review of itsprocedures and processes “to try and keep current with the times,including a very changing energy marketplace that we regulate,”Chairman James Hoecker said.
NGI The Weekly Gas Market Report
Producers Launch Sable Island; Promise Deliveries in 22 Months
With all regulatory approvals in place at both Federal andProvincial levels, sponsors of the Sable Island Offshore EnergyProject last week signed both their key commercial agreements andthe Facilities Alliance Agreement to engineer, construct andinstall production and gathering facilities to handle delivery of 3.5 Tcf of gas from offshore Nova Scotia. This formally commits theowners to the $2 billion first phase, which will deliver the firstgas in late 1999.
Weather Still Mild, But Cash Prices Are Frozen
Few areas were getting below 32 degrees (F) Thursday, but cashprices seemed to be frozen in place everywhere. The market was muchlike the landscape around Houston, one source said: flat in alldirections.
New England Market Seen Ripe for LNG
Gordon Shearer, president of Cabot LNG Corp., said he knew if hewaited long enough, liquefied natural gas would have its day in themarketplace. That appears about to happen, at least in New England,where Cabot finds itself positioned to meet growing market demandwith LNG imported from thousands of miles away. At the CambridgeEnergy Research Associates 17th annual executive conference inHouston this week, Shearer enumerated factors growing New Englandgas demand and explained how LNG can economically meet some of thatdemand.
Tennessee Beefing Up Offshore Louisiana Lines
Tennessee Gas Pipeline has filed plans to increase capacity onsix separate pipelines in the Gulf of Mexico that together wouldrepresent an increase of over 720 MMcf/d in offshore lines owned byTennessee and other parties and a net increase in deliverabilityout of the Gulf of 200 MMcf/d.
PG&E, California Producers Negotiate Gathering Sale
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.
Breathitt: Oil Line Rates Could Hamper Gas Conversions
The way FERC figures pass-through of costs in oil pipeline ratecases could hamper future use of converted lines, according toCommissioner Linda T. Key Breathitt, who issued dissenting opinionsin two oil pipeline cases involving Rio Grande and LonghornPartners Pipelines [OR97-1-001 and OR95-7]. In both cases theCommission ruled that the companies would not be allowed to passthrough the full purchase price of the pipelines, only thedepreciated original cost of the line. “In an area where Congresshas asked us to exercise regulatory restraint we turn around andapply textbook principles in a manner that may discourage futureconversions of oil pipelines to new uses,” Breathitt said. Theorders examine the corporate relationships between the companies toarrive at the conclusion that the companies are selling assets tothemselves. But Breathitt believes arguments about corporate tiesin these cases don’t apply. She was joined by Commissioner CurtHebert.
Nova, El Paso Finalize Chilean Pipeline Plans
El Paso Energy International announced final agreements havebeen signed by the partners of an international consortium to buildthe 325-mile Gasoducto del Pacifico pipeline from Argentina acrossthe Andes mountains into Chile, roughly 300 miles south ofSantiago. Construction on the $380 million project has alreadybegun and the pipeline is scheduled to be in service by late 1999.The initial delivery capacity of the system is estimated to be 140MMcf/d.