NGI The Weekly Gas Market Report

Progas Storage and Marketing, based in Abilene, TX (unrelated toCalgary-based ProGas), announced plans last week to develop 40 Bcfof working storage capacity along major interstate pipelines in theIllinois and Appalachian basins over the next four years.

If El Paso continues on its current path, there may be nopipelines left to buy. After announcing an agreement to merge withCoastal Corp. only a week earlier, the Houston-based energy giantannounced two more major purchases last week.

The merger of BP Amoco and Atlantic Richfield Co. (Arco) becamesignificantly more complicated last week. Now the companies facefederal and state opposition, but they’ve added one formerchallenger to their camp.

With the ink barely dry on the contract accord, El Paso Natural Gas stunned everyone last week when it announced that it and Enron North America Corp. were parting ways. El Paso said the companies had reached a “mutual agreement” to annul their $38 million negotiated arrangement under which the marketer had agreed to acquire 1.2 Bcf/d of westbound firm capacity on the pipeline. (See NGI, Jan. 31).

The assets serve all major metropolitan areas, the largest industrialload centers, and numerous natural gas trading hubs, El Paso said. Theyare also well positioned to serve many of the state’s existing and plannedgas-fired electric generation facilities. Included in the transaction are8,500 miles of natural gas transmission pipelines that transport approximately2.8 Bcf/d, nine processing plants that currently process 1.5 Bcf/d, anda 7.2 Bcf natural gas storage field. The transaction also includes significantnatural gas liquids pipelines and fractionation facilities.

The stepped-up merger frenzy of gas pipeline companies has takenits toll on the Interstate Natural Gas Association of America(INGAA), which announced Friday it was downsizing its staff inresponse to its loss of members and dues.

Hoping to inject life into its dwindling stock price, CMS EnergyCorp. announced drastic measures last week, including an aggressivestock buy-back plan and intentions to create a tracking stock forthe jewel in CMS’ crown — Consumers Energy.

The birth of a New England power plant will spawn more importsof LNG to the United States. Last week it was announced that SitheEnergies Inc. will feed its 1,600 MW Mystic Station in Everett, MA,with LNG imported by nearby Cabot LNG Corp.

Putting the finishing touches on a controversial asset sell-offplan, MCN Energy Group Inc. announced last week the sale of itsAppalachian natural gas exploration and production (E&P) andrelated pipeline properties for a total of $180 million.