Daily GPI

Columbia Energy Group subsidiary Columbia Energy Services (CES)yesterday said it would sell its Houston-based wholesale andtrading operations. The move follows a review of CES’ overallenergy marketing businesses begun in February after the unitreported a $59 million operating loss for 1998.

ARCO shareholders approved the company’s proposed $27 billioncombination with BP Amoco. The all-share deal will involve theexchange of 0.82 BP Amoco American Depository Shares (ADS) for eachARCO share. BP Amoco’s shareholder meeting to vote on thecombination is scheduled for Wednesday in London. The combinationremains subject to the approval of regulatory authorities,including the US Federal Trade Commission (FTC) and the EuropeanCommission. The companies currently are working to close thetransaction later in the year.

With only a day left before the capacity now held by DynegyMarketing and Trade on El Paso Natural Gas opens to bids for nextyear, parties are continuing to fight over the legality of theoriginal contract.

Swing prices continued their downhill slide Friday, succumbingto the normal drop in weekend demand, a softer screen and lack offresh storm news. Except for Midwest citygates, where a warmingtrend was developing, virtually all eastern points fell by a dimeor more. Waha and the Permian Basin also experienced dime-plusdeclines, but other western points tended to fall only a nickel orso. Sources attributed the West’s relative firmness to heavy airconditioning and agricultural load in California and other states.

Taking a cue from Thursday’s Access trade sell-off, the futuresmarket continued lower Friday as traders fully discounted thecurrent trio of storms by aggressively exiting their longpositions. By 2:40 p.m., the September contract had fallen justshort of filling in the chart gap down to $2.805. However, $2.83was all that the sellers could muster and prices rallied in thelast 30 minutes of trading. The September contract settled at$2.912, down 3.6 cents for the day but up more than 8 cents fromits earlier low.

Analysts are escalating their spot gas price forecasts, but it’snot the oft-cited storage fill that’s driving them.

Neither the interstate pipelines nor gas producers wereparticularly enamored of FERC’s latest attempt to create a morebalanced, lighter-handed system for regulating gas pipelines on theOuter Continental Shelf (OCS). They both agree the Commission fellshort of its goal in the July proposed rulemaking.

Acquisitive Calpine Corp. stuck to its strategy last Friday,saying it agreed to buy 80% of the Minneapolis, MN-basedCogeneration Corp. of America (CGCA) for $145 million. The proposedacquisition will increase Calpine’s gas-fired energy production to2,476 net MW of capacity, representing a 20% jump in production.Calpine expects to complete the deal in January.

Development is accelerating on Canada’s newest gas frontier as athird production project steps forward to tap discoveries in thesouthern Northwest Territories.