NGI The Weekly Gas Market Report

Switching its focus slightly from exploration to development drilling, Anadarko Petroleum Corp. said last week that 2003 and 2004 are going to be exciting times for the company as past exploration efforts finally come to fruition. Holding an all-day webcast for analysts Thursday, the company said that in addition to shifting focus to the development side of the business, the company also is realigning resources to concentrate on its U.S. onshore plays.

The British Columbia Utilities Commission said Friday that it has approved BC Gas Utility’s application for an increase in the rates it charges for the natural gas commodity. The increase will add approximately 16% to the typical residential customer’s total gas bill, about 6% less than the wholesale cost the distributor believes it may have to pay over the next 12 months.

With the natural gas industry in the United States having to shoulder the ever-increasing demand burden from gas-fired power generation, development of the ultra-deepwater Gulf of Mexico needs to be pursued in addition to other options such as LNG and Alaskan production, according to a new study led by Roger Anderson, director of Energy Research at Columbia University.

Natural Gas Partners (NGP) announced last Thursday it has completed the first and final closing of its most recent venture, Natural Gas Partners VII, L.P. (NGP7), at the maximum desired amount of $600 million due to strong investor demand.

With an indignant, fighting tone questioning the veracity of their accusers’ evidence, major energy companies named as alleged market manipulators in the “mountains of evidence” California officials submitted to the Federal Energy Regulatory Commission earlier this month filed their responses Thursday and pulled no punches. One called the California submittal “shoddy work,” and another promised to go to the U.S. Supreme Court to defend its reputation. All expressed feelings of being unfairly accused.

At its regular meeting on Wednesday, FERC is going to take “very, very substantial steps toward resolving all of the important old business” related to allegations of manipulation of the natural gas and electricity prices in western markets, said Commissioner William Massey last week. But the Commission will not clear away the entire “underbrush.”

Progress Energy’s subsidiary Progress Energy Ventures is paying $188 million in cash to Williams Energy Marketing and Trading to acquire a full-requirements, long-term power supply agreement with Jackson Electric Membership Corp., which is located in Jefferson, GA. Jackson is one of the largest electric cooperatives in the United States, serving more than 171,000 residential, commercial and industrial customers in 10 metro Atlanta and northeast Georgia counties.

With a sobering re-emphasis of its basic energy and energy-related businesses, Spokane, WA-based Avista Corp. announced last week that two of its longtime executives were retiring, and rather than filling the positions the company will collapse their duties into expanded roles for two existing executives at the company. It is part of a “realignment” of its overall management structure that stresses “back-to-basics,” a company spokesperson said.

The Illinois Citizens Utility Board (CUB), a non-profit statewide utility watchdog organization created by the state legislature, told state regulators Thursday to throw out the $14 million base gas rate increase proposed by Ameren/CILCO, which serves about 250,000 gas customers in the state. CUB said a financial analyst it commissioned and the Illinois Attorney General’s Office determined that the utility overstated its expenses by $11 million in order to justify the rate increase.