NGI The Weekly Gas Market Report

Upper Midwest combination utility NorthWestern Corp. revealed Tuesday that it will take about $880 million in special charges in 2002, which is $180 million more than previously announced. It expects to post a $900 million net loss for the year compared with net earnings of $37.5 million in 2001.

The staff of the Federal Energy Regulatory Commission has given preliminary environmental clearance to Dynegy’s proposed Hackberry liquefied natural gas (LNG) terminal in Louisiana — the first new LNG terminal scheduled for construction in the United States in 25 years.

Dynegy Inc.’s CEO said Wednesday that the company had reached a “defining point” in its rebuilding process, after securing a new $1.66 billion bank credit financing package that won’t come due until 2005. The new facility replaces existing loans held by subsidiary Dynegy Holding (DHI), which would have matured over the next two months.

East Tennessee Natural Gas has started laying pipe for its 510,000 Dth/d Patriot Extension into North Carolina. The $298 million extension-expansion project will boost East Tennessee’s existing design capacity of 700,000 Dth/d to more than 1.2 Bcf/d. Service is expected to begin in August or September with capacity increases due in November 2003 and in January 2005.

At literally the eleventh hour, Reliant Resources Inc. (RRI) last week successfully completed a $6.2 billion financing package to refinance $5.9 billion of existing bank credit facilities with new ones that won’t mature until 2007. The lenders also provided the cash-poor company a $300 million line of credit, which matures in 2004.

In its report on western energy market manipulation, FERC staff concluded the agency has sufficient authority under the CAISO and now-defunct Cal-PX Market Monitoring and Information plans (MMIP) to take enforcement action against “bad actors” in the California energy markets. The Commission, however, requested last week that industry comment on staff’s interpretation of the extent of FERC’s authority under the MMIP.

Pioneer Natural Resources Co. announced last week that its 100% owned and operated Falcon field in the western deepwater Gulf of Mexico began producing from two wells at approximately 185 MMcf/d and 650 b/d of condensate on March 15. The Falcon field start-up was the second of five major projects the company expects to bring online by early 2004.

FERC denied requests for rehearing and stay by numerous pipeline customers and approved stiffer creditworthiness standards for Natural Gas Pipeline Company of America (NGPL), including a plan to suspend service within five business days if a shipper falls behind in payments a second time within six months and another plan that would halve the time period to 15 days for suspending service when a shipper is delinquent in payments.

Denver-based Evergreen Resources Inc. said that the company will acquire 100% of the outstanding common stock of cross-town exploration and production player, Carbon Energy Corp., for approximately $90.8 million.