*Energy Insight News for Thursday, January 3, 2002
Scaled-back Alaskan pipeline proposal in works

With prospects for a gas pipeline from Alaska's North Slope looking shakier
by the month, Foothills Pipe Lines Ltd. is about to unveil a scaled-down
version of the proposed Alaska Highway Pipeline Project that it hopes will
win the approval of both regulators and producers.

Within the next week, Calgary-based Foothills plans to present North Slope
producers with a revised commercial plan costing about $8 billion,
approximately half the estimated cost of the existing Alaska Highway plan
under consideration, according to TransCanada PipeLines Ltd. CEO Hal Kvisle.


TransCanada is a joint partner in Foothills with Vancouver-based Westcoast
Energy, which is in the process of being taken over by Duke Energy.
Foothills has U.S. and Canadian regulatory permits dating from 1977 to build
the Alaska Natural Gas Transportation System, which would run through Alaska
along the highway into western Canada and ultimately into the lower-48
states. 

The new proposal is to build a 42- or 48-inch-diameter pipeline from the
North Slope, Kvisle said, across the Yukon and Alberta and into the
continental U.S., with initial deliveries of about 2.5 billion cubic feet
per day. The three major North Slope producers have said the existing
proposal-a 1,700-mile pipeline with capacity for 4 billion cubic
feet/day-would cost $17.2 billion.

The three North Slope producers-ExxonMobil, BP and Phillips
Petroleum-testified at a Senate hearing this fall that the economics of any
Alaska-to-lower-48 pipeline were questionable. Kvisle said he hopes a
smaller project will persuade the producers to give early backing to the
engineering phase and, in the process, see how gas supply and demand
unfolds.

The dramatic drop in wellhead gas prices this year has fueled concerns that
a pipeline from Alaska is no longer economical, Kvisle noted. Still, after
examining various pipeline options, the North Slope producers appear to be
leaning more toward the Alaska Highway route than they were before, he said.
Read the entire story at http://www.energyinsight.com. 
Also, catch the latest news headlines on Energy Insight Executive, updated
twice daily.
///////////////////////////////////////////////
Market Brief    Wednesday, January 2 (Changes from 12/28)

Stocks  Close   Change  % Change 	
DJIA    10,073.40       (63.6)  -0.63%	
DJ 15 Util.     297.74  3.2     1.10%	
NASDAQ  1,979.25        (8.02)  -0.40%	
S&P 500 1,148.08        (12.9)  -1.11%	
                        	
Market Vols     Close   Change  % Change	
AMEX (000)      130,955 28,748.0        28.13%	
NASDAQ (000)    1,512,183       189,403.0       14.32%	
NYSE (000)      1,179,897       274,803.0       30.36%	
                        	
Commodities     Close   Change  % Change	
Crude Oil (Feb) 21.1    0.69    3.38%	
Heating Oil (Jan)       0.5507  (0.016) -2.79%	
Nat. Gas (Henry)        2.555   0.000   0.00%	
Propane (Jan)   32.60   (1.40)  -4.12%	
Palo Verde (Feb)        24.75   0.00    0.00%	
COB (Feb)       24.75   0.00    0.00%	
PJM (Feb)       30.00   0.00    0.00%	
                        	
Dollar US $     Close   Change  % Change	
Australia $     1.942   (0.017) -0.87%	
Canada $        1.60    0.005   0.31%	
Germany Dmark   2.17    (0.048) -2.17%	
Euro    0.9036  0.020   2.25%	
Japan ?en     132.2   1.200   0.92%	
Mexico NP       9.1     (0.080) -0.87%	
UK Pound        0.6923  0.0023  0.33%	
                        	
Foreign Indices Close   Change  % Change	
Arg MerVal      323.69  28.30   9.58%	
Austr All Ord.  3,383.10        19.30   0.57%	
Braz Bovespa    13872.09        294.52  2.17%	
Can TSE 300     7646.79 (28.21) -0.37%	
Germany DAX     5167.88 7.78    0.15%	
HK HangSeng     11350.85        (80.74) -0.71%	
Japan Nikkei 225        10542.62        0.00    0.00%	
Mexico IPC      6410.05 6371.84         -0.88%	
UK FTSE 100     5,218.30        29.20   0.56%	
                        	
Source:  Yahoo!, TradingDay.com and NYMEX.com                   	
//////////////////////////////////////////////
Executive News
PacifiCorp halts pursuit of Priest Rapids competitive license bid
PacifiCorp, a division of Scottish Power, says that it has signed a power
purchase contract for the energy output of Priest Rapids Hydroelectric
Project and withdrawn its participation in a competitive license application
for the project. PacifiCorp agreed to a contract with Grant Public Utility
District No. 2, the current owner and operator of the project, for purchase
of a share of the project output when current contracts expire in 2005 and
2009.

Grant County Public Utility District said that that it has received power
sales contract commitments from all 12 of its current utility power
customers as well as 5 additional purchasers in Idaho added as a result of a
recent FERC administrative proceeding. The PUD had placed an end-of-year
deadline on contract terms. PacifiCorp and the Yakama Indian Nation had
announced in August that they were forming a partnership to challenge the
PUD for the license. However, in signing the new contract this week,
PacifiCorp agreed that it will support Grant PUD's relicensing effort,
effectively ending its participation in any challenge.

PacifiCorp says that the contract the company has just concluded is more
favorable than that previously offered by the PUD. If so, this suggests that
the competitive license move may have been a strategy to improved power
purchase contract terms. The Yakama Nation has said that it will move
forward with the competitive license application despite PacifiCorp's
decision to pull out of the partnership. Hence, the PUD's license for the
Priest Rapids Hydroelectric Project still is under threat.

Williams buys NGL pipeline  
Williams Energy Partners L.P. has purchased a natural gas liquids pipeline
from Aux Sable Liquid Products L.P. for $8.9 million. The transaction is
expected to be 2 cents to 3 cents per unit accretive to cash flow on an
annualized basis. The 8.5-mile, 8-inch diameter pipeline extends from Aux
Sable's gas processing plant in Channahon, Ill., to a petroleum refinery in
Joliet, Ill., and another nearby natural gas liquids pipeline.  Aux Sable
has contracted with the partnership for continued exclusive use of the line
being purchased.

To subscribe to our Executive News Service, which is updated twice daily,
log on to http://www.energyinsight.com, or contact Platt's Direct Response
Team at 1-800-424-2908 (if outside the United States call 1-720-548-5700).
///////////////////////////////////////////////