Yesterday

The Canadian-Nova Scotia Offshore Petroleum Board and the NovaScotia Petroleum Directorate awarded 19 offshore Nova Scotiaexploration licenses and three onshore licenses yesterday for atotal of C$592 million, the largest investment in petroleumexploration ever made in Nova Scotia.

Illinova Energy Partners (IEP) purchased the Chicago holdings ofthe natural gas marketer Energy Dynamics Inc. yesterday, adding1,400 commercial and industrial customers to its Midwest base.Illinova also said the purchase will push its overall gas revenuesabove $100 million annually. Terms of the transaction were notdisclosed.

Williams said yesterday it’s Transcontinental Gas Pipe Linesubsidiary has filed an application with FERC for its SouthCoastexpansion project, which would add 204,099 Dth/d of firmtransportation capacity to serve new markets in Georgia andAlabama.

Regulations pertaining to the construction of new pipelineprojects took the spotlight at FERC yesterday, with the Commissionapproving a final rule aimed at updating and streamlining thecertificate process for new projects, including a change in thetimetable for the filing of project-related environmental data.FERC also proposed an initiative that would give landowners greaterparticipation in the certification process.

Wyoming Interstate’s proposed $78 million Medicine Bow Lateralin the Powder River Basin won preliminary approval from FERCyesterday. In a draft order, the Commission said the pipeline,which would provide 260,000 Dth/d of new firm take-awaytransportation capacity for Wyoming producers, would be in thepublic interest, subject to a final order following environmentalreview.

KN Energy warned investors yesterday warm temperatures, highstorage levels, poor processing margins and reduced gastransportation throughput during the first quarter took a bite outof earnings and could continue to plague the company for the restof the year.

For the second trading session in a row yesterday the Maycontract dipped lower at the open, but was unable to completelyfill in the chart created between last Wednesday’s $2.18 high andThursday’s $2.20 low. And once that early selling pressure driedup, the market was free to rally on waves of buying by both localand commercial traders. The May contract pressed higher throughoutthe session, spiking above the $2.30 level at the closing bellbefore settling at $2.299, a 7.3-cents advance on the day. Atechnical difficulty at Nymex last night suspended the after-hourscomputer-only Access trading session.

The Department of the Interior’s Mineral Management Serviceannounced plans yesterday to begin selling royalty gas productioncollected in its offshore Texas royalty in-kind (RIK) pilotprogram. The two-year joint initiative between the MMS and theTexas General Land Office will use an auction process that willtake place during the regular bidweek period each month, withdeliveries starting in June.

In a rare display of unanimity, pipelines and producersyesterday said the federal government’s ban on oil and gasproduction on a wide swath of public lands – both onshore andoffshore – was the biggest obstacle to supplying the 30 Tcf of gasneeded to meet the Clinton administration’s proposed global-warmingtargets.