Daily GPI

The Independent Petroleum Association of America elected BarryRussell as its new president yesterday, replacing Gil Thurm. Thechange was immediately effective.

Duke Energy North America (DENA) announced the start ofconstruction of three new merchant generation projects totaling1,500 MW. At full capacity, each plant will burn about 3,300MMBtu/hour. In a fourth deal, DENA announced the sale of itsremaining 78.5% interest in the 500 MW Hidalgo Energy Facility toan affiliate of Calpine Corp. for $235 million.

Panda Energy Intl. Inc. paved the way for its entrance into theFlorida generation market yesterday by announcing that petitionsfor determination of need have been filed with the Florida PublicService Commission to build two 1,000 MW power plants. Both plantswill cost $300 million and are expected to begin commercialoperation in May of 2003.

Preparing for the advent of electric industry restructuring inNevada and another pending merger with Portland General, SierraPacific Resources’ two Nevada power utilities have begun theprocess of selling off nearly a billion dollars of fossil-fuelgeneration plants in a two phase auction seeking preliminary,nonbinding bids by next month. Book value collectively is “justunder $1 billion,” a Sierra Pacific spokesperson said.

PG&E Corp.’s National Energy Group began construction on theLa Paloma Generating Plant, a 1,048 MW gas-fired, combined-cyclefacility expected to begin operating in the summer of 2001. Theplant is estimated to burn about 180,000 MMcf/d, and Kern-Mojave isthe closest pipeline source, a spokesman said.

In outlining his company’s strategy for this year, Union PacificResource’s CEO George Lindahl III said it will continue to focus ononshore North America plays. The company, he said, has budgeted$750 million for capital spending in 2000, including $100 millionfor property purchases. This budget should enable UPR to stabilizeproduction volumes by the middle of the year and increase volumesin the second half, while replacing over 100 percent of producedreserves. UPR also intends to continue the trend of increaseddrilling activity. Twenty-five rigs are now running in the U.S.,compared to 11 at this time last year and 17 at the end of 1999.Drilling in Canada has also picked up, with 11 rigs running today,compared to 13 in March of 1999 and four at year-end. Lindahlfocused on three specific areas that will be vital for thecompany’s growth: the Frontier play in southeast Wyoming’s GreenRiver Basin, South Louisiana’s Etouffee discovery and the Kluawells in British Columbia. “Our exploration activity in Wyoming,south Louisiana and British Columbia shows that we are making goodon our strategy, which is to find and produce natural gasopportunities onshore North America,” Lindahl said. “Our rig countshould continue to increase during the year. Development drillingis one of our strengths and we are hard at it onshore NorthAmerica, in the Gulf of Mexico and in Latin America..We believethat we are off to a good start to delivering value in 2000.”

Due to unexpected maintenance on its TL-342 line affectingdeliveries into the PL-1 market, CNG canceled all interruptible andnon PL-1 secondary service Tuesday until further notice.

Prices achieved broad-based small gains Tuesday largely based onan initially firm screen and lingering cool weather in the West,but were retreating in the late going as futures eventually movedlower.

Despite constructive gains in both the cash market and crude oilfutures market and following a string of gains in seven of the lasteight trading sessions, natural gas futures gave back a nickelyesterday as traders weighed in on the extremely technicaloverbought condition that existed in the market. And althoughTuesday’s modest retreat did little to satisfy those overboughtconditions, analysts question how much further the market will fallbefore buyers step back in.