NGI The Weekly Gas Market Report

California’s anti-bypass policy would remain firmly in place on Southern California Gas’ system under a peaking service proposed by SoCal that was approved last week by a California Public Utilities Commission (CPUC) judge (see NGI, June 4), according to the sponsor of a prospective pipeline.

Mexican President Vicente Fox, elected last year on a promise to improve the country’s economic future, has begun actively courting “out-of-towners” in the hopes of encouraging capital investments in his country. With several productive global trade missions completed, Fox now is turning his attention further north, courting Canadian oil and gas producers in his plan to develop Mexico’s untapped oil and gas reserves.

Conoco Northern Inc., a subsidiary of Houston-based Conoco Inc., officially launched its friendly takeover bid for Gulf Canada Resources Ltd. on Friday, tendering a cash offer that would pay the Calgary-based company C$12.40 per share in a deal worth $4.3 billion (C$6.7 billion). The two companies agreed to the sale in May (see NGI, June 4), and Conoco’s offer will expire on July 13.

Rep. Robert Matsui (D-CA) last week introduced an energy tax bill as a companion to the comprehensive energy legislation that was unveiled by Senate Democrats earlier this year. The Energy Security and Tax Incentive Policy Act proposes a number of tax incentives and credits to spur the construction of new interstate electric and natural gas transmission facilities — notably an Alaska pipeline — and more gas distribution lines, as well as additional gathering to promote development in remote areas.

PG&E National Energy Group last week received final regulatory approval for its 1,080 MW Athens generating facility in New York, allowing the project to begin construction so that it can deliver electricity to New York’s energy markets as early as summer 2003.

CMS Trunkline Gas Co. has received FERC approval to abandon offshore facilities and facilities located in Texas and Louisiana, transferring them to its gathering affiliate, CMS Trunkline Field Services (CP97-83). A companion order voted out by the Commission at its regular meeting last Wednesday designated those facilities as gathering, rendering them exempt from the Commission’s jurisdiction under the Natural Gas Act (CP97-84).

Capping a week that featured a face-to-face meeting between President George W. Bush and California Gov. Gray Davis in which the president delivered a public and unmistakable ‘no’ to price caps as a way out of the western energy crisis, the Cal-ISO, Southern California Edison and San Diego Gas and Electric (SDG&E) filed — under protest — their plan to form a single, state regional transmission organization (RTO).

Energy Secretary Spencer Abraham announced last week that the Department of Energy (DOE) will provide partial funding for 11 government-industry collaborative projects aimed at upgrading the safety and performance of the nation’s natural gas interstate and intrastate transportation systems.

The New York Independent System Operator (NYISO) last Thursday expressed confidence that both New York City and the state as a whole should be able to avoid blackouts this summer, but then acknowledged the Big Apple will have a “razor-thin” positive margin starting in July.