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Enron Mail |
From today's Gas Daily, in case you haven't seen it yet.......
El Paso Merchant Energy will be passing up on its right of first refusal f= or=20 up to 1.22 billion cfd of capacity on El Paso Natural Gas, sources said yesterday. El Paso wou= ld=20 not comment on the report but said the company would issue a statement soon. The capacity, from the San Juan Basin to California, was open for bids unt= il=20 Feb. 12, and El Paso Merchant Energy held a right of first refusal at six receipt points= =20 until May 31. El Paso Merchant paid $38.5 million for the capacity, which was previously held by= =20 Dynegy Energy Marketing. The capacity has been the source of controversy in the wake of California= =01,s=20 ongoing energy crisis, with companies concerned that an affiliated company held the pipeli= ne=20 capacity. The California Public Utilities Commission alleged in a FERC complaint that= =20 the agreement between the companies was "rigged" (GD 1/11). "There has been a lot of pressure," said Gordon Howald, an analyst with=20 Credit Lyonnais Securities. "Everyone is blaming them for what=01,s going on in California,= =20 though I believe FERC did clear them." Howald said that giving up that capacity and allowing the "market to decid= e=20 the value" would help El Paso on two fronts. "It probably makes sense considering the pressure they=01,ve been under fr= om=20 regulators," Howald said. And "their pipeline operations could essentially garner some= =20 higher profitability if they are able to increase the value of that capacity in an open season."= =20 RW
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