Daily GPI

Mexico’s Comision Reguladora de Energia has a new chairman thisweek, after President Vicente Fox appointed Dionisio P‚rez-JcomeFriscione to a five-year term. P‚rez-Jcome had headed the EnergyMinistry’s Investment Promotion Unit and had also served in theministry as executive director for Public Non-basic PetrochemicalCompanies.

As it ended its annual conference in San Antonio this week, theInterstate Oil and Gas Compact Commission emerged with an agendacalling for new tax and public policy incentives to increasenatural gas production in the United States. The 30-stateorganization re-issued its call for a national energy policy andurged Congress to give tax breaks to exploration and developmentcompanies.

Guardian Pipeline said it bought five engine compressor packagestotaling 22,225 hp to provide natural gas compression on its141-mile, 660 MMcf/d pipeline in Illinois and Wisconsin. Itpurchased the compressors from Compressor Systems, Inc. of Midland,TX. Combined, the compressors will be capable of delivering up to750 MMcf/d of gas on Guardian. “Guardian Pipeline is continuing tomake steady progress. This purchase agreement for a major equipmentcomponent keeps Guardian on track to meet its scheduled in-servicedate of November 2002,” said George Hass, Guardian project manager.A final Federal Energy Regulatory Commission (FERC) decision on theGuardian Pipeline is expected by early 2001. In June, FERC issued aPreliminary Determination that the pipeline is in the publicinterest, subject to the outcome of its environmental review, andin July, FERC staff issued a favorable Draft Environmental ImpactStatement on the project. In addition, the Public ServiceCommission of Wisconsin made a preliminary determination on theproject in October, accepting the economics of a Wisconsin Gaslateral pipeline, which will connect Guardian with Wisconsin Gas’distribution system. Guardian will transport gas frominterconnections with Alliance, Northern Border, Midwestern, andNGPL at the Chicago hub near Joliet, IL, to northern Illinois andsouthern Wisconsin markets starting in November 2002. Its sponsorsinclude CMS, WICOR and Viking Gas.

El Paso Energy Corp. clarified Wednesday that what used to be knownas Channel Industries Gas, which exploded Monday evening (see DailyGPI, Dec. 6), is now managed by a unitcalled El Paso Energy Intrastate Co. and has not actually changed tothat name. The instrastate unit refers to it as the A-S Line becauseit runs from Agua Dulce to the Sabine River at the Texas-Louisianaborder. The rupture occurred downstream of the Houston Ship Channelwhere most its major customers are located, a spokeswomansaid. Because of supply re-routing or fuel switching, there are stillno service interruptions occurring or expected, she added. Averagerecent throughput was 400 MMcf/d, the spokeswoman said, but the volumeof gas lost to the atmosphere was unavailable.

Kinder Morgan Energy Partners, L.P. announced it has purchasedDelta Terminal Services, Inc. for approximately $114 million incash. The acquisition “represents about half of the transactions weexpect to announce in December,” said Richard D. Kinder, KMPchairman, and brings to more than $2 billion the company’sannounced acquisitions this year. The Delta purchase includes twoliquid bulk storage terminals in New Orleans, LA, and Cincinnati,OH, providing services to producers of petroleum, chemicals andother products. “This acquisition is a great fit with our recentlyannounced GATX transaction — in which we acquired 12 terminalsacross the country — as it gives us liquids terminals in two newlocations, including access to the important Port of New Orleansmarket,” Kinder said. The New Orleans terminal has a storagecapacity of 2.5 million barrels, while the Cincinnati terminalholds 500,000 barrels.

El Paso Energy Intrastate (formerly known as Channel)experienced a rupture of its 30-inch line Monday evening nearBaytown, TX, east of Houston. There was no fire, but a voluntaryevacuation of the area was conducted, a spokeswoman said. Oneinjury was reported as a result of the evacuation, and as of middayTuesday everyone had returned home except for two families whosehomes were damaged, she said. No service interruptions are expectedas all demands are being met through gas re-routing or fuelswitching, the spokeswoman said. The line probably will be returnedto service by the end of the week. It is owned 50-50 by El PasoEnergy and Enron Corp. and is operated by El Paso Field Services.

Prices continued to soar Tuesday but generally by smalleramounts than on Monday in the Gulf Coast, Midcontinent/Midwest,Appalachia and Southwest/Rockies. However, bigger gains at thefrigid Northeast citygates allowed them to join California and thePacific Northwest in measuring average pricing in four digits.

In almost a carbon copy of Monday’s session, natural gas priceserupted higherTuesday morning only to spend much of the remainderof the session checking lower as traders took profits amidintra-day technical weakness and storage uncertainty. Ending athree-day, $1.25 dollar price rally, the January contract slipped4.9 cents to close at $7.384. Meanwhile, the 12-month strip tumbledconvincingly, down 13.6 cents to $5.555.

In this wacky energy year in California, the state-charteredelectricity transmission grid operator, Cal-ISO, Tuesday upstagedone of the hit holiday movies by releasing its own version of Dr.Seuss’ classic “The Grinch That Stole Christmas.” The state’snonprofit traffic cop for electrons shocked Californians with arequest that they cutback on their use of holiday lights,restricting their use to nonpeak hours.