NGI The Weekly Gas Market Report

The proposed Alliance Pipeline ran into two potential stumblingblocks last week – aboriginal politics and the U.S. EnvironmentalProtection Agency – which are not necessarily related.

FERC staff’s long-awaited “comprehensive” report onsecond-generation natural gas issues was forwarded to Commissionerslast week for their review – which some believe bodes well forregulatory resolution of these nettlesome issues possibly in themonths ahead.

Domestic natural gas spot market prices released by Natural Gas Clearinghouse increased $.23 in March to an average of $2.16/MMBtu, attributable to more normal weather expectations and storage injections

Energy guru and Pulitzer-prize winning author Daniel Yergin toldFederal Energy Regulatory Commission staffers there will still be aplace for the agency in the next millennium despite the fact themarketplace is taking “The Commanding Heights” away fromgovernments.

Houston-based El Paso Energy will develop a 544-MW gas-firedmerchant power plant in Milford, CT. in a joint venture with PowerDevelopment Company (PDC). The $225-million project is beingdesigned to reach commercial operation at the same time Connecticutis expected to begin full retail electricity supply competition,currently estimated in the year 2000. Gas supplies are expected tocome to the plant via the Iroquois gas pipeline. The partners areexpected soon to announce development of a second, similar plant inCT. Most of El Paso Energy’s recent power plant development hasbeen in international markets. The partnership with PDC brings ElPaso Energy back to U.S. gas-fired power plant development. A unitof El Paso Energy acquired Tenneco Energy and Tennessee GasPipeline Co. in 1996.

The producer refund case has taken a unique turn as severalpipelines have stepped up to argue that while natural gas producersmust pay them the $500 million in refunds – today is the deadlinefor payment – they don’t believe they have to pass that money on totheir customers.

Opponents of Alliance Pipeline Project have dealt it a schedulesetback of nine months to a year, but remain far from breaking upits supporting coalition of gas producers and transporters.

The first bidweek under Pacific Gas &amp Electric’s Gas Accordtransportation framework was a rough ride for many doing businessin the drastically changed northern California market. WhilePG&ampE went ahead with its massive computer system upgrade onschedule, few shippers were prepared to handle it.

New York energy services firm Total Energy Corp. thinks its namehas become so attractive, so “unforgettable” in this age of energyconvergence that others will put up top dollar to make it theirown. The company announced it plans to auction the name in the nextseveral weeks.