Can you trust a marketer with all of your regulated assets? It’sa question many LDCs are asking themselves these days asderergulation and competition are stranding more and more supplycontracts, upstream transportation and storage. But there’s no easyanswer, according to several panelists speaking at GasMart/Power’99 in Dallas yesterday.
Worth
Articles from Worth
Ocean Energy Divests $116 M of Assets to Reduce Debt
Ocean Energy Inc. (OEI) announced two separate sales worth acombined $116 million and 164 Bcf of gas last week, as it carriedout a debt reduction plan aimed at preparing the company for itsmerger with Seagull Energy. OEI said shareholders for bothcompanies are holding special meetings March 30 to vote on themerger. If they vote in favor, the company will be officiallymerged that afternoon.
Short Covering Lifts Futures Back Above $1.70
Some would say that bull traders have endured a year’s worth ofbearish price news already this year as consistentlywarmer-than-normal weather forecasts each Monday have been followedby lower-than-expected storage withdrawal figures Wednesday. Thisone-two combo has done a number on natural gas prices, which haveplumbed to near-record lows amid almost non-existent volatility.But for at least a day, that was a distant memory Monday asshort-covering, egged on by a slew of fundamental and technicalfactors, buoyed the prompt-April contract 7.3 cents to $1.701.
Midcoast Buys Texas Gathering Systems
Midcoast Energy Resources Inc. grew its Texas asset base withthe acquisition of two gathering systems in two separate dealsworth a combined $4.55 million. Midcoast bought the Mendotagathering pipeline and processing plant from Seagull Energy Corp.for $3.75 million in cash. The Mendota facilities are in RobertsCounty, TX, and include about 35 miles of gathering pipeline, a 10MMcf/d cryogenic gas processing plant and compression facilitieswith a combined 2,400 horsepower. The system gathers gas from morethan 70 active wells and has a total throughput of 7,200 Mcf/d. TheMendota pipeline is located adjacent to the Anadarko system, whichMidcoast purchased from El Paso Energy Corp. in September 1998, andMidcoast plans to integrate the operations of the Mendota andAnadarko systems. Also as part of the transaction, Seagull hasdedicated production from all of its existing acreage in the areato Midcoast for the next five years.
CanadianOxy Sells Assets to Combat Low Prices
Canadian Occidental Petoleum Ltd., an independent global energyand chemical company, sold oil and gas properties worth $370million in order to take the bite out of low commodity prices, thecompany said Wednesday. This brings CanadianOxy’s 1998 propertysales to $630 million. The company did not disclose who bought theproperties. An additional $235 million of sales are expected beforethe end of January 1999.
Northern Border Expansion to Start This Week Nearly Full
Warm winter weather normally means trouble for the gas industry,but for Northern Border Pipeline, which is attempting to completeconstruction of a major expansion/extension project, it has been ablessing. After a month and a half delay because summer rains setback construction, the pipeline company is expecting to have itsproject in service some time between Thursday, Dec. 17, and Sunday,Dec. 20, with the entire 700 MMcf/d capacity being fully utilized”almost immediately,” said Robert Hill, vice president of marketingand business development for the pipeline company.
Storm Threat Fails to Impress Softer Cash Markets
Overall the cash market Thursday decided one bearish storagereport in the hand was worth more than two tropical storms in thebush. But although nearly all points checked in as flat to downabout a nickel, sources said the softness probably would have beenquite a bit greater if it hadn’t been for September’s thirdstraight weekly storm threat to Gulf of Mexico production,especially in light of the screen’s nickel-plus drop.
TX Gatherer Targeting Third-Party, Risk Management Business
Fort Worth-based Richardson Products Co., the marketing arm ofSid Richardson Gasoline Co., is hoping to follow the footsteps ofAquila Gas Pipeline (AQP) of San Antonio, TX, into third-party gasmarketing. The company picked up four AQP employees to accomplishits goal.
TX Gatherer Builds New Marketing Operation
Fort Worth-based Richardson Products Co., the marketing arm ofSid Richardson Gasoline Co., is hoping to follow the footsteps ofAquila Gas Pipeline of San Antonio, TX, into third-party gasmarketing. The company is expanding into marketing of third-partynatural gas and adding risk management products. RichardsonProducts recently grew its staff by five, four of whom come fromAquila Gas Pipeline where they started a successful third-partymarketing business. Richardson Products last year marketed 100 to130 MMcf/d of gas last year. Jim Wade, newly hired vice presidentof marketing and business development, said plans are to initiallydouble that number and then market about half a Bcf/d in the firstquarter of next year, all physical gas. Expectations are for abouta Bcf/d in financial volumes.
AGA Suggests LDC Marketing Affiliate Guidelines
The American Gas Association is seeking to get its two cents’worth in on the conduct of affiliated marketers by adopting eightprinciples intended to guide state officials in policymaking. “AGAbelieves that state officials already have ample authority toreview relationships between natural gas utilities and theiraffiliates,” said Miriam Swydan Erickson, AGA senior director ofgovernment relations. “The new AGA principles are intended toassist state regulators considering additional rules.”