NGI The Weekly Gas Market Report

In Brief

Tennessee Gas Pipeline’s Express 500 Project, which offers firmtransportation through the bottlenecked Gulf of Mexico supply area,won more than 1 Bcf/d of capacity requests from customers duringthe project’s first open season. “We believe that this level ofparticipation demonstrates the need for incremental capacity fromthe Gulf Coast,” said Tennessee President John Somerhalder II.Tennessee has targeted Mar. 31 as the deadline for signedagreements, with plans to file a 7(c ) certificate next November.To accommodate the firm load, Tennessee will expand capacity at keyreceipt points on the Tennessee 500 line: the South Pass (Fishhook)System, the Bluewater Header and East Leg, the Venice ProcessingPlant tailgate, and any other points on the 500 line requested byopen season participants.

March 2, 1998

Williams Signs Mobile Bay Processing Deal with Exxon

Williams Field Services has snagged a big fish for its large newMobile Bay processing plant, signing up to process 300 MMcf/d ofgas for Exxon Company USA. The deal is the largest processingcontract to date for Williams. The NGL extraction plant to be builtnear Coden, AL is expected to be in service by the first quarter ofnext year and will have 600 MMcf/d of inlet capacity.

March 2, 1998

Ferc Okays Surety Bonds in Producer Refund Case

Natural gas producers scored a big victory last week when theFederal Energy Regulatory Commission opened the door for them topost surety bonds in lieu of the multi-million-dollar refunds tocustomers that are due to be paid by March 9th.

March 2, 1998

ONEOK Resources

ONEOK Resources has signed an agreement with OXY USA to purchasesome of OXY’s gas and oil reserves including 400 wells in Oklahomaand Kansas for $135 million. Net gas and oil production is 30MMcf/d and 400 b/d.

March 2, 1998

New Deep Water Gulf Lines Are Off to A Slow Start

Deep-water gas from the Gulf of Mexico has begun moving ashore,but without the pressure of a cold winter or the incentive of highprices the gas stream so far has been little more than a trickle.Two projects, Discovery Gas Transmission and Nautilus Pipeline,have begun some deliveries and a third, the extension of DauphinIsland Gathering System (DIGS), is expected to start up this month.

March 2, 1998

NEES Power Plant Sale Gets FERC Nod

The Federal Energy Regulatory Commission gave the go-ahead lastweek for two New England Electric System (NEES) utility companiesto sell their fossil fuel and hydro generation business to USGenNew England Inc. (USGen), a subsidiary of PG&ampE Corp.

March 2, 1998

Big Energy Buyers Expected to Consolidate Purchasing

Electricity buyers with multiple facilities are eager toconsolidate power buying activities from myriad suppliers to just ahandful when competition comes, according to a recent survey.

March 2, 1998

Bidders Lining Up for Pan Alberta Gas

After a pause for consideration by one potential taker,TransCanada PipeLines, Canada’s second-biggest pool of natural gassupplies is again looking for new owners. Pan-Alberta Gas’president, Ross Weaver, confirmed, “we are still for sale.”

March 2, 1998

AGA President Promises Flat Dues For 3 Years, Continued Cost Cutting

The American Gas Association’s “shrewd” new President and CEODavid N. Parker has discovered a period of calm, but continuedstreamlining is the best thing right now to keep AGA in goodstanding with its members. In an interview with NGI last week,Parker said he has made a commitment to the AGA board to furtherreduce expenses and hold down membership dues.

March 2, 1998

BC Gearing Up for Major Gas Development Program

Nova Gas Transmission continues to handle about 80% (4.5 Tcf in1997, or 12.3 Bcf/d) of Canadian gas on its provincial gatheringgrid because Alberta remains both the biggest producer and centerof growth in output. But expectations of serious growth in BritishColumbia showed clearly when the National Energy Board visited theprovince’s resource development frontier of Fort St. John forregional hearings on the Alliance Pipeline Project.

March 2, 1998