NGI The Weekly Gas Market Report

Houston-based Enron Corp., hit in the past few months with accusations of overcharging in California and sagging stock performance, wiped the slate clean Thursday with its second quarter earnings release, announcing profit was up 40% over a year ago, boosted by surging electricity and gas sales in North America and Europe. The company said it sold almost twice as much power in North America and five times as much in Europe in the quarter.

TradeSpark LP, the electronic and voice brokerage energy trading marketplace that debuted less than a year ago, said last week it had more than doubled its overall transaction volumes in just three months, trading more than $41.9 billion (notional value) in energy products in the second quarter, a 131% increase over the trades made in the first quarter of the year.

Minneapolis-based NRG Energy Inc. is buying a 2,255 MW project portfolio from Indeck Energy Services Inc., which includes combined-cycle and peaking power plants serving the Chicago and upstate New York marketplace. The assets include the Rockford I and II Energy Centers, located 75 miles west of Chicago in Rockford, IL; Bourbonnais I and II Energy Centers, 50 miles south of Chicago; and the Ilion Energy Center in central upstate New York. No financial details were disclosed.

California regulators are getting backlogged with key issues they must resolve in the increasingly complex and tight time frame that is left to fashion an economic solution to the state’s energy woes–regardless of how events unfold at the federal level. There is little more than a month for actions that would keep on track the state’s proposed bond sale, which now is slated for late summer or early fall.

Greg Noval, who founded and ran Canadian 88 Energy Corp. for 14 years only to be ousted last year when Duke Energy Corp. bought a 20% stake in the company, now faces not only being kicked off the board of directors but also a C$150 million lawsuit filed against him by Canadian 88, which alleges Noval breached his fiduciary duties as a director for attempting a hostile takeover. The lawsuit seeks C$140 million in damages for Noval’s breach of fiduciary duty and C$10 million in general damages.

Domestic gas production is expected to show an increase from the first quarter of about 0.5% and about 3.4% growth compared to the second quarter of last year, Salomon Smith Barney (SSB) said in a second quarter preview last week. However, SSB analysts warned that the pace of domestic drilling could slow significantly if gas prices drop below $3.

News that Amerada Hess would buy Dallas-based independent Triton Energy Ltd. was one of the few bright spots on the New York Stock Exchange last week, with Triton’s stock soaring nearly 50% following the announcement last Tuesday, opening at $14.57 and closing at $44.43. New York-based Amerada Hess, one of the East Coast’s largest gasoline retailers, said it will pay $3.2 billion in a cash deal that will position it as one of the largest global independent E&P companies. It also agreed to assume $500 million of Triton’s debt.

FERC Chairman Curt Hebert signaled last week that the Commission plans to keep a watchful eye on moves by California regulators and other government officials to improve the natural gas and power infrastructure within the state, reviewing progress or lack thereof at every regular meeting of the Federal Energy Regulatory Commission.

The Mid-Atlantic Power Supply Association (MAPSA) has filed a petition before the Pennsylvania Commonwealth Court requesting a review of an order issued by the Pennsylvania Public Utility Commission (PUC) that MAPSA claims will bail out GPU utilities at the expense of electric customers and competitors.