Thursday June 16th, 2005

BP Bay Crossing LNG preliminary economic impact study released…Citgo’s Venezuela parent says SEC seeks information about move to Houston…Staffing firm says financial hiring in Houston significantly above national average… BP’s Bay Crossing LNG team has released a preliminary Economic Impact Study developed by the Center for Economic Education at the University of Houston at Clear […]

BP Bay Crossing LNG preliminary economic impact study released…Citgo’s Venezuela parent says SEC seeks information about move to Houston…Staffing firm says financial hiring in Houston significantly above national average…

BP’s Bay Crossing LNG team has released a preliminary Economic Impact Study developed by the Center for Economic Education at the University of Houston at Clear Lake. Project Director Robert Boyce says the proposed LNG terminal would provide a new, solid piece of the economic base in Galveston for decades, creating hundreds of jobs and millions of dollars in local economic impact. The proposed LNG project would be on Pelican Island. BP would spend about $650 million on the project–$500 million on the facility and $150 million on a natural gas pipeline.

A Galveston office has been set up on Moody Avenue to provide information about the BP Bay Crossing Project–a proposed regasification unit on Pelican Island. BP has released its preliminary economic impact study for the proposed LNG plant.

Exxon Mobil has won federal approval to build a $600 million shipping terminal in Corpus Christi to receive tankers of liquified natural gas. The Vista del Sol terminal will have a receiving capacity of 1.1 billion cubic feet of LNG per day.

Valero Energy, Tesoro and Sunoco will install nearly $1 billion in new pollution controls at 20 oil refineries. The companies also agreed to pay fines totaling $8.5 million in settlements with the government and seven states over alleged violations of Clean Air laws. The settlement ends an investigation by the Environmental Protection Agency, the Texas Commission on Environmental Quality, the Texas Attorney General and five other states. The refineries covered in consent decrees filed today in federal courts in Texas and Pennsylvania represent about 15 percent of the nation’s refining capacity. Valero and Tesoro are based in San Antonio and Sunoco is based in Philadelphia. Valero and Tesoro’s affected refineries are in: Houston, Corpus Christi, Sunray, Texas City and Three Rivers, Texas. There are refineries in Benicia, Martinez and Wilmington, California; Krotz Springs and St. Charles Parish, Louisiana; Ardmore, Oklahoma; Denver and Paulsboro, New Jersey. Sunoco’s affected refineries are in Pennsylvania, Ohio and Oklahoma.

Citgo’s parent company in Venezuela says the U. S. Securities and Exchange Commission is seeking information about Houston-based Citgo’s $550 million debt repurchase last year. The commission acted after receiving a complaint from Citgo’s auditing team. The commission is also seeking information relating to the move of Citgo’s corporate headquarters to Houston from Tulsa, Oklahoma.

Williams Companies is paying $7.6 million in refunds and fines because an employee of its Houston-based pipeline unit Transcontinental Gas gave fuel storage data to Williams traders that wasn’t provided to other customers. The refund represents profits the company may have made because of the information, according to the Federal Energy Regulatory Commission settlement.

Former Reliant gas trader Jerry Futh, Jr., has been convicted of knowingly transmitting through interstate commerce inaccurate reports concerning market information about natural gas trades that affected the price of natural gas. Sentencing has been set for September 9th in federal court.

One of five former Enron executives on trial has testified that an operating system for the company’s broadband network wasn’t the stock-pumping phantom the government contends it was. Rex T. Shelby says that the operating system was comprised of many elements and was being developed and tested in phases when Wall Street analysts learned about it at a 2000 conference in Houston. The government contends Shelby, former broadband unit CEO Joseph Hirko and former broadband strategist Scott Yeager knew the operating system was in its embryonic development stages when it was touted to analysts at the conference as being up and running. Enron shares shot up from $54 the day of the conference to $72 the day after. The trio are charged with fraud, conspiracy, insider trading and money laundering, and all three sold tens of millions of dollars in Enron stock in the days and months after the conference. The defendants contend the technology worked, but was being developed, tested and marketed to customers in stages.

Most Enron investors have probably never heard of Amalgamated Bank, but they might want to thank the tiny company. The New York City-based bank has only a dozen branches and about 500 workers in a town dominated by two of the world’s largest financial institutions–Citigroup and J. P. Morgan Chase. Amalgamated is akin to a David that cost the two banking Goliaths billions of dollars in one of the largest class-action settlements in history. J. P. Morgan chase agreed late Tuesday to pay $2.2 billion to settle the lawsuit for its role in helping Enron engineer an accounting fraud. Last week, Citigroup agreed to pay $2 billion. One week after Enron’s 2001 collapse, Amalgamated became the first to sue to recoup the $20 million it lost. Since that lawsuit was filed, some 50,000 other claimants have joined the case and up to a million more investors have been invited to do so.

Robert Half International says financial hiring activity in Houston is significantly above the national average. A net nine percent of executives polled in the Houston area project increased hiring–six points above the national average. The local results reflect a two-quarter rolling average based on the responses of 200 CFOs from a random sample of Houston companies. Robert Half says businesses are trying to gauge the strength of the economy before adding new employees. Uncertainties include energy costs, rising healthcare expenses and higher productivity allowing firms to remain competitive without having to expand staff levels.

President Bush’s choice to head the Securities and Exchange Commission is married to the Vice President of Governmental Affairs for Continental Airlines. The CEO of Houston-based Continental today told shareholders that relationship isn’t expected to present any conflicts of interest. Continental Chairman Larry Kellner, during the company’s annual meeting in Houston, said the carrier has never had issues that rose to the level of the chairman of the SEC. Rebecca Cox’s husband is California Congressman Christopher Cox. He was nominated by Bush earlier this month following the surprise announcement by SEC Chairman William Donaldson is resigning at the end of June. Meanwhile, Kellner says Continental’s top challenge remains high fuel prices.

American Airlines believes it can save $45 million on jet fuel this year by urging pilots and other employees to focus on conservation. Higher fuel costs have been blamed for increased ticket prices. Among the steps the Fort Worth-based carrier is taking are refueling at airports where fuel is cheapest, reducing fuel burn while jets are parked at gates and carrying less water to reduce weight and increase mileage. American launched an internal internet site this week to detail its “fuel smart” program. It wants pilots, dispatchers, mechanics and others to work together on saving fuel. Fuel accounts for about 20 percent of an airline’s costs–second behind only labor. AMR Chairman Gerard Arpey this week wrote a memo to employees about the “sudden and catastrophic rise in fuel costs” over the past year.

Houston-based biopharmaceutical company Agennix says a product being developed to treat diabetic foot ulcers is showing promise. Results from the recent trial were presented at the 2005 annual meeting of the American Diabetes Association in San Diego this week. About 16 million people have diabetes in the United States, and about one in seven suffers at some time from diabetic foot ulcers.

A Houston company ordered by Arkansas officials to pay almost $38,000 in fines has closed all of its Arkansas offices. Cemetery Holdings also has dismissed all but two of its Arkansas workers. But cemetery holdings says burials will continue at the four cemeteries it owns in Arkansas. The fines were levied by the Arkansas Cemetery Board. That’s after the Arkansas Securities Department reported last week that conditions at all four of the company’s cemeteries were “deplorable.” Board attorney Mike Spades says the company wrote local funeral homes to outline how they can arrange burials through its last two Arkansas employees. The company owns Edgewood Memorial Park in North Little Rock, Memorial Park Cemetery in Pine Bluff, and Rest Haven Memorial Gardens and Arlington Memorial Cemetery, both in El Dorado.

El Paso Corporation is restating past financial results, reducing its 2003 and 2004 net losses by $46 million, according to the Houston Chronicle. The Houston-based natural gas company said it made errors recording currency translation adjustments and recording U. S. deferred income taxes related to foreign entities.

El Paso has won approval from U. S. regulators for a $73.6 million project in California. El Paso is converting a crude oil pipeline to transport natural gas.

Whittier Energy has complete its purchase of Delaware-based Rimco Production Company in a $56 million deal. Houston-based Whittier is acquiring working interests in about 116 active wells and one unit in 18 producing fields primarily in the Gulf Coast region of Texas, Louisiana and Alabama.

World Energy magazine’s new publication World Energy Monthly Review has launched its online service for subscribers. Registered users can listen to commentary by Professor Micheal J. Economides, as well as access all articles. The newsletter features analysis by Professor Economides and articles by his team of energy analysts on the Americas, Russia, China and the rest of the world.

The Bush administration is asking Congress to pass mandatory federal safety standards to protect chemical plants from attacks. Assistant Homeland Security Secretary Robert Stephan says not enough plants have upgraded security voluntarily since 9-11, and he estimates that 20 percent of the highest-risk plants have made no security changes at all. Stephan says it’s no secret that the plants are an attractive target for militants, because of the economic impact an attack would have, and the potential loss of life. Stephan told the House Homeland Security Committee that a worst-case scenario would involve the loss of 10,000 lives, and varying degrees of injuries for 40,000 more.

Governor Rick Perry hosted a small business summit yesterday in El Paso, with plans to hold other summits around the state in the coming months. The summit offered advice on writing a business plan, utilizing tax credits, becoming certified as a Historically Underutilized Business and other topics. Some 22 lending institutions were on hand to provide access to growth capital. A new training program called TradeRoots Texas helps small businesses develop export capabilities.

Leucadia National Corporation says its Wiltel Communications unit will get $236 million from SBC Communications. The payment is for termination of the two companies’ alliance agreements. Wiltel operates a nationwide fiber optic network. San Sntonio-based SBC will begin making the payment in installments April 30th or upon the closing or termination of its deal to acquire AT&T. The parties disclosed earlier today a new master services agreement. That outlines SBC’s continued use of New York-based Wiltel’s services throughout the planned AT&T acquisition and integration process.

Cigna HealthCare of Philadelphia is expanding the availability of its health savings account plans to south Texas small businesses. Cigna Choice Fund health savings account plans will be offered to businesses with 51 to 200 employees. Previously, the plan had only been available to employers with more than 200 employees.

Houston-based HCC Insurance Holdings has formed an underwriting agency in New York with a branch office in London. HCC Credit Underwriters will specialize in short- and medium-term credit risks for U. S. and international companies. The firm will underwrite on behalf of its affiliated insurance companies, including Houston Casualty, HCC Europe, U. S. Specialty Insurance and HCC Reinsurance.

Affirmative Insurance Holdings stock has gotten a boost from a deal with Vesta Insurance Group. Vesta agreed to sell the last of its shares in the auto insurance company it spun off last summer. Late Tuesday, Birmingham, Alabama-based Vesta agreed to sell its remaining 35 percent stake in Affirmative for $15 a share. The shares are to be sold to an entity jointly owned by Delaware Street Capital and J. C. Flowers and Co. Affirmative provides nonstandard personal automobile insurance policies. But it’s been battling accounting issues, litigation, and losses due to the hurricanes in Florida last year.

Recent high school graduates whose families received financial assistance through the state’s Temporary Assistance for Needy Families program can receive funds for the first year of college free of charge. A special workshop is set for Saturday in the auditorium of Houston Community College-Central on Holman. More than 16,000 families in Harris county receive TANF funds.

The KPMG audit, tax and advisory firm has introduced a paid time-off policy for volunteering. Employees can take off up to 12 hours per year, or a day and a half, during normal business hours to volunteer for qualified non-profit organizations. According to the Bureau of Labor Statistics, lack of time was the most common reason given for not volunteering among people who have volunteered at some point.

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