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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________
CONSOLIDATED NATURAL GAS COMPANY : CERTIFICATE
Pittsburgh, Pennsylvania : of
: NOTIFICATION
CNG INTERNATIONAL CORPORATION : NO. 3
Reston, Virginia :
: TRANSACTIONS
: DURING PERIOD
:
: July 1, 1997
through
September 30, 1997
:
File No. 70-8759 :
:
(Public Utility Holding Company Act of 1935) :
____________________________________________ :
TO THE SECURITIES AND EXCHANGE COMMISSION:
AUTHORIZATIONS
By order dated May 30, 1996 (HCAR No. 26523), File No. 70-8759, ("May
Order") the Securities and Exchange Commission ("SEC") authorized (i) financing
by Consolidated Natural Gas Company ("CNG") of its wholly-owned subsidiary, CNG
International Corporation, ("CNGI"), (ii) CNGI to directly acquire, or through
intermediate subsidiaries indirectly acquire, securities or interests in exempt
wholesale generators ("EWGs") outside the United States and foreign utility
companies ("FUCOs"), as respectively defined in the Public Utility Holding
Company Act of 1935 ("the Act"), and (iii) CNG, CNGI and intermediate
subsidiaries to enter into guarantee arrangements, obtain letters of credit,
and otherwise provide credit support for the obligations of intermediate
subsidiaries and EWGs and FUCOs in which CNGI has a direct or indirect
interest, in amounts in the aggregate not to exceed $300 million. The May
Order reserved jurisdiction, pending completion of the record, over (i)
investments by CNG and International, of up to $300 million in entities
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that would engage in a variety of consulting and support services to
nonassociates, as well as certain other energy-related businesses in foreign
countries, (ii) the provision of credit support by CNG, CNGI and its
subsidiaries, aggregating, together with EWG/FUCO credit support, of up to $300
million with nonassociates in connection with consulting, support and energy-
related businesses in foreign countries, and (iii) the issuance to
nonassociates by CNGI and its subsidiaries of securities that are not exempt
from prior SEC review under sections 6(a) and 7 of the Act, among other things.
By orders dated October 25 1996 (HCAR No. 26595) and November 19, 1996
(HCAR No. 26608), File No. 70-8759, the SEC respectively released jurisdiction
over proposed investments of (i) up to $75 million in foreign gas pipeline
projects located in Bolivia and Uruguay ("South American Pipeline Projects")
and (ii) up to $75 million in three pipeline projects in Australia ("Australian
Pipeline Projects").
This Certificate is filed in accordance with Rule 24, as a notification
that of the various transactions authorized by the aforesaid orders, the
following have been carried out in accordance with the terms and conditions of
and for the purposes represented by the Application-Declaration and such
orders.
FOREIGN INVESTMENTS
CNGI has made no investments in foreign EWGs or FUCOs through September
30, 1997 except for its investment of approximately $10 million in The Latin
America Energy and Electricity Fund I, L.P. ("Fund"). The Fund has to date
invested in three FUCOs: Empresa Distribuidora de Entre Rios, S.A. in
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Argentina, Luz del Sur in Peru, and Companhia Forca e Luz in Cataguatesan in
Brazil. $2.6 million of the $10 million was returned to CNGI in October 1997;
such funds were paid to the Fund in anticipation of an investment in a FUCO in
Columbia which did not take place.
No investments have been made in the South American Pipeline Projects.
Pursuit of investment in these two pipelines has been abandoned.
In December of 1996, CNGI and El Paso each acquired, through intermediate
subsidiaries, a 30 percent interest in Epic Energy Pty. Ltd. ("Epic"), an
Australian corporation. At the same time, Four Australian investors, Allgas
Energy, AMP Investments, Axion Funds Management and Hastings Funds Management,
each acquired a 10 percent interest in Epic. On December 19, 1996, Epic
purchased the Australian Pipeline Projects' assets, which were formerly held by
Tenneco Energy. Epic will operate, maintain and manage such assets.
The Australian Pipeline Projects' assets are valued at more than $500
million in Australian dollars. The assets include three major long-distance
natural gas pipeline systems accessing gas supplies in Australia's Cooper
Basin: (i) a 488 mile pipeline from Moomba (the central supply point of the
Cooper Basin) south to the city of Adelaide; (ii) a 44 mile pipeline from
Katnook to markets in South Australia; and (iii) a recently completed, 470
mile pipeline from the Cooper/Eromonga Basin in Southwest Queensland to the
city of Wallumbilla, interconnecting with existing pipelines serving the
Brisbane and Gladstone markets.
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INTRA-AFFILIATE TRANSACTIONS INCLUDING FINANCING
CNGI incorporated CNG Cayman One Ltd and CNG Cayman Two Ltd in the Cayman
Islands as wholly-owned intermediate subsidiaries to own all the stock of CNGI
Australia Pty Ltd, which directly holds CNGI's 30% interest in Epic. Combined
balance sheet and income statement for the quarter ending September 30, 1997
for CNGI, and these wholly-owned subsidiaries are attached as Exhibits A.
To date, no guarantees have been issued, by or for the account of CNGI or
any of its subsidiaries, with respect to any of the investments authorized in
this proceeding.
At various times during the reporting period, CNGI issued and sold shares
of its common stock, par value $10,000 per share, to Consolidated for $10,000
per share. These transactions were as follows:
Date Shares Amount
7/10/97 20 $200,000
7/14/97 10 100,000
7/23/97 10 100,000
7/30/97 15 150,000
7/31/97 15 150,000
_____ __________
TOTAL 70 $700,000
By order dated July 18, 1997, HCAR No. 26742, CNGI was authorized to
participate in the CNG system money pool ("Money Pool"). During the reporting
period CNGI made withdrawals of $880,000 from, and made contributions of
$510,000 to, the Money Pool. CNGI's balance in the Money Pool on September 30,
1997 was a net borrowing of $370,000.
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OTHER MATTERS
The business of CNGI is to participate in selected projects in
international markets as authorized by Commission order in this proceeding.
The proceeds of the above described transactions were used by CNGI in such
business.
Each respective "past tense" opinion required by paragraph F(2) of the
instructions as to exhibits for Form U-1 will be filed when all transactions
authorized under the respective order have been consummated.
CONSOLIDATED NATURAL GAS COMPANY
CNG INTERNATIONAL CORPORATION
By N. F. Chandler
Their Attorney
November 17, 1997
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EXHIBIT A
<TABLE>
<CAPTION>
CNG International Corporation
Balance Sheet
September 30, 1997 (Unaudited) (1)
CAYMAN CAYMAN CNGI
CNGI 1 2 AUSTRALIA
ELIMIN. TOTALS
______ ______ ______ _________
________ ______
Assets
______
<S> <C> <C> <C> <C>
<C> <C>
Property, plant
& equipment
Total Investment 677,594 0 0 0
0 677,594
Less Accum. Deprec. (123,917) 0 0 0
0 (123,917)
Net property,
plant & equipment 553,677 0 0 0
0 553,677
Cash 8,192 0 0 2
0 8,194
Special deposits 614 0 0 0
0 614
Accounts Receivable (618) 0 0 0
0 (618)
Accts. Rec.-Assoc. Cos. 9,138 9,305 281 448
(19,172) 0
Investments in Subs. 38,731,500 38,344,000 387,500 0
(77,463,000) 0
Other Investments 9,914,780 0 0 38,070,247
0 47,985,027
Deferred Charges 252,210 0 0 0
0 252,210
Deferred Income Taxes 125,200 0 0 0
0 125,200
Total Assets 49,594,693 38,353,305 387,781 38,070,697
(77,482,172) 48,924,304
========== ========== ======== ==========
========== ==========
</TABLE>
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EXHIBIT A
<TABLE>
<CAPTION>
CAYMAN CAYMAN CNGI
CNGI 1 2 AUSTRALIA
ELIMINATIONS TOTALS
______ ______ ______ _________
___________ ______
Stockholders Equity
& Liabilities
___________________
<S> <C> <C> <C> <C>
<C> <C>
Capitalization
Common stock 47,550,000 38,344,000 387,500 38,731,500
(77,463,000) 47,550,000
Retained earnings (5,878,509) 0 0 112,044
0 (5,766,465)
Total stock-
holder's equity 41,671,491 38,344,000 387,500 38,843,544
(77,463,000) 41,783,535
Long-term notes
payable to parent
company 0 0 0 0
0 0
Total capitalization 41,671,491 38,344,000 387,500 38,843,544
(77,463,000) 41,783,535
Total curr. liabil. 7,128,977 9,305 281 9,138
(19,172) 7,128,529
Accum. Defer.
Income Taxes 12,240 0 0 0
0 12,240
Total stockholder's
equity and liabil. 48,812,708 38,353,305 387,781 38,852,682
(77,482,172) 48,924,304
========== ========== ======== ==========
========== ==========
(1) This balance sheet has not been audited by the Company's independent
auditors.
</TABLE>
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EXHIBIT A
<TABLE>
<CAPTION>
CNG International Corporation
Income Statement for Nine Months Ending
September 30, 1997 (Unaudited) (1)
CAYMAN CAYMAN CNGI
CNGI 1 2 AUSTRALIA
ELIMIN. TOTALS
_________ ______ ______ _______
______ __________
<S> <C> <C> <C> <C>
<C> <C>
Total operating revenues 263,732 0 0 0
0 263,732
Total operating expenses 2,754,316 0 0 0
0 2,754,316
_________ ______ ______ _______
_____ __________
Net Operating Income (loss) (2,490,584) 0 0 0
0 (2,490,584)
Other income (689,126) 0 0 112,044
0 (577,082)
Other income deductions (38,281) 0 0 0
0 (38,281)
Interest charges (29,672) 0 0 0
0 (29,672)
_________ ______ ______ _______
_____ _________
Net income (loss) (3,247,663) 0 0 112,044
0 (3,135,620)
========= ====== ====== =======
===== =========
(1) This income statement has not been audited by the Company's independent
auditors.
</TABLE>
