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Chicago-based Peoples Energy decided to eliminate the middle manthis week, purchasing an interest in 25 oil and natural gasproducing wells in South Louisiana and the Texas Gulf Coast regionfrom NBB Energy Partners LLP. The $18 million purchase makesPeoples Energy an operator of oil and gas properties for the firsttime in its history, with complete production responsibilities forthe purchased wells.

Despite 1999 production revenue increases of 51% and cash flowincreases of 43%, Calgary-based Canadian 88 took a sharp hit to itsbottom line by a natural gas forward sales contract, which resultedin the company posting a loss of $6.5 million ($0.06 per share).The company had reported earnings of $1.8 million ($0.02 per share)in 1998.

A PG&E Corp. subsidiary broke ground yesterday on itsmassive La Paloma gas-fired power plant. The 1,048 MW generatingfacility will burn about 150 MMcf/d of gas and will be connected tothe Kern-Mojave Pipeline about 40 miles west of Bakersfield. Itwill be the largest merchant power plant in the state and isexpected to begin operations in summer 2001.

Expanding its potential reach as a merchant power plantdeveloper/operator, San Jose, CA-based Calpine Corp. announced itis going after the high-tech and telecommunications industries’growing need for reliable, high-quality electricity by offeringdistributed generation with back-up reliability services. It has a30-MW unit about to be unveiled for an undisclosed customer andseveral other units in the queue, according to the Calpineexecutive heading its new “c*Power” business unit.

BC Gas selected Marine Pipeline Construction, a division of MurphyPipeline Inc., as its contractor for the 188-mile, 24-inch diameterSouthern Crossing gas pipeline. The contractor will begin movingequipment immediately to locations along the pipeline route, whichstretches from Oliver to Yahk, BC. Construction is expected to beginbefore June 1 and be completed by November. The C$377 million projectwill be designed to initially transport 250 MMcf/d with room forexpansion to 600 MMcf/d. Addition details are available in a pdffile on BC Gas’web site.

Great Lakes is holding an open season through July 31 for thesale of firm service from Emerson to Carlton in seven packagessubject to Right of First Refusal provisions of the pipeline’stariff (that is, each existing shipper can match the highest bidfor the capacity and retain it). Up to 70,927 Dth/d of capacitystarting Nov. 1, 2002 is available. Call a marketing representativeat (888) 275-3611 for more information.

This week’s climb in the cash market slowed down Wednesday, butwatch out for the fireworks that are virtually a certainty today.

Since coined by Federal Reserve Chairman Alan Greenspan back in1995 to explain investors love of stocks, “irrational exuberance,”has come to typify the stock market and its unprecedented bullrally. But yesterday as stock prices plummeted again, “irrationalexuberance” was a more apt description of the natural gas futuresmarket, which spiked sharply amid a frenzy of short-covering andnew long accumulation. When all the dust had settled and the orderstabulated in the data room at Nymex, the numbers were staggering— the June contract rose a whopping 24.1 cents to finish at$2.689, setting a new 30-month high at $3.73 during a session thatsaw 102,978 contracts change hands.

The Federal Energy Regulatory Commission yesterday announcedfive “practical steps” that it will take this summer to “alleviatereliability stresses” on the electric transmission grid duringperiods of heightened demand. Commissioner Curt Hebert Jr.,however, questioned not only the effectiveness of the measures, butalso FERC’s motive for proposing them.