Newspaper article THE JOURNAL RECORD

Yankee Pipeline to Run Natural Gas Interchange / for Futures Trading

Newspaper article THE JOURNAL RECORD

Yankee Pipeline to Run Natural Gas Interchange / for Futures Trading

Article excerpt

Yankee Pipeline Co. has been chosen to operate a natural gas interchange in Katy, Texas, as a delivery point for transactio ns in futures contracts on the New York Mercantile Exchange, it was announced Monday.

That means trading natural gas as a commodity is one step closer to being a reality, said Gordon E. Goodman, president of Yankee Pipeline, a subsidiary of The Yankee Gas Co. of Dublin, Ohio.

Yankee Gas, a subsidiary of The Yankee Companies, is engaged in natural gas marketing and transmission. Yankee Pipeline owns and operates intrastate pipelines in Texas, Louisiana and Oklahoma.

A number of pipelines operating in the Katy area, both interstate and intrastate, anticipate filing with the Federal Energy Regulatory Commission to allow open movement of gas from one pipeline to another within the interchange, said Goodman, contacted by telephone in his Houston office.

"Hopefully that will be some time in June," Rosemary McFadden, president of the exchange, said by telephone from her New York office. A number of pipelines have "signed on" to participate but she would not reveal their names until the signing. The New York Mercantile Exchange is not a direct party to the signing.

The filing is expected to be for authorization to move gas under section 7c of the Natural Gas Act and a declaratory order for 311 authorization to allow intrastate transportation under the NaturalGas Policy Act, said Brad Leach, research analyst with the exchange.

McFadden is "optimistic" that trading in the contract can begin this year.

Yankee Pipeline was chosen as operator by a group of pipelines who could participate in the exchange, he said. Most major interstate pipelines as well as Texas intrastates operate at Katy but participants have not yet been set.

"Of all the points we considered," Goodmand said, "Katy was clearly the first choice."

Participants should be decided during the next two weeks, said Leach.

"We do not have signed operating agreements," he said by telephone. "We hope to get some definitive answers on which pipelines will be involved in two meetings we have scheduled starting next week."

Establishment of a delivery mechanism is considered the last issue to be resolved prior to the Commodity Futures Trading Commission authorizing the exchange to trade natural gas futures contracts. …

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