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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________________________________
CONSOLIDATED NATURAL GAS COMPANY : CERTIFICATE
Richmond, Virginia : of
: NOTIFICATION
CNG INTERNATIONAL CORPORATION : NO. 15
Reston, Virginia :
: TRANSACTIONS
: DURING PERIOD
:
: July 1, 2000
: through
: September 30, 2000
:
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 through
March 31, 2001 (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(1).
____________
(1) All dollar amounts are in U.S. dollars unless otherwise indicated.
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The May Order reserved jurisdiction, pending completion of the record,
over (i) investments by CNG and CNGI, of up to $300 million in entities 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 order dated November 19, 1996 (HCAR No. 26608), File No. 70-8759, the
SEC released jurisdiction over proposed investments of up to $75 million in
three pipeline projects in Australia ("Australian Pipeline Projects"). By
order dated February 12, 1998 (HCAR No. 26824), the SEC released jurisdiction
over a proposed investment by CNGI of up to $165 million to acquire a one-
third interest in the Alinta pipeline being privatized by the government of
Western Australia. The Alinta Pipeline is referred to further herein as the
Dampier-to-Bunbury Natural Gas Pipeline.
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.
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MERGER OF CNG
On January 28, 2000, CNG ("Old CNG") was merged into a newly formed,
wholly-owned subsidiary ("New CNG") of Dominion Resources, Inc ("DRI"). New
CNG, located in Richmond, Virginia, was the surviving corporation and
changed its name to "Consolidated Natural Gas Company." Since New CNG
substantially succeeds to all the rights and obligations of Old CNG pursuant
to the merger, "CNG" as used further herein will refer to both Old CNG, for
the period prior to January 28, 2000, and New CNG, for the period beginning
on such date. For further information on the merger, reference is made to
SEC orders dated December 15, 1999, Release Nos. 35-27112 and 35-27113, and
to the Registration Statement on Form S-4, File No. 333-75669, filed by
Dominion Resources, Inc. and CNG under the Securities Act of 1933 on April 5,
1999. The authorization expiration of the May Order was extended to January
28, 2003 pursuant to the order in Release No. 35-27112. After the merger,
CNG decided to sell the foreign businesses of CNGI in furtherance of DRI's
strategy to focus on the energy business in the northeastern quadrant of the
United States.
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EWGS AND FUCOS
The Latin America Energy and Electricity Fund I, L.P.
______________________________________________________
CNGI has invested approximately $10,000,000 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 Argentina, Luz del
Sur in Peru, and Companhia Forca e Luz Cataguazes-Leopoldina in Brazil. The
Fund invested in a foreign pipeline in 1998.
Camuzzi Gas Pampeana S.A.
Camuzzi Gas del Sur S.A.
Empresa Distribuidora de Energia Atlantica S.A.
_______________________________________________
Pursuant to a stock purchase agreement dated December 22, 1997,
CNGI acquired, for an aggregate of approximately $78 million, 12.5% of the
voting shares of Sodigas Pampeana S.A. ("Sodigas"), 12.5% of the voting
shares of Sodigas Sur S.A. ("Sodigas Sur") and 20% of the voting shares of
Buenos Aires Energy Company S.A. ("Baeco"). In March 1998, CNGI purchased,
for an aggregate of approximately $45 million, an additional 9.05% each in
Sodigas and Sodigas Sur, and an additional 5% interest in Baeco. Thus CNGI
after such additional acquisitions owned 21.55% of each of Sodigas and
Sodigas Sur, and 25% of Baeco.
Camuzzi Argentina S.A. operates the largest gas distribution concession
in Argentina and owns 51% of both Sodigas and Sodigas Sur. Pacific
Enterprises owns 21.55% of each of Sodigas and Sodigas Sur. The remaining
5.9% of Sodigas and Sodigas Sur is owned by two international mutual funds,
Global Environment Fund and BEA Capital.
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Sodigas owns 70% of the voting shares of Camuzzi Gas Pampeana S.A.
("Camuzzi Pampeana"). Sodigas Sur owns 90% of the voting shares of Camuzzi
Gas del Sur S.A. ("Camuzzi del Sur"). The Argentine government owns 20% of
Camuzzi Pampeana. The employees of Camuzzi Pampeana and Camuzzi del Sur each
own 10% of their respective companies.
Camuzzi Argentina S.A. owns 75% of BAECO. Baeco owns 55% of the
voting shares of Inversora Electria de Buenos Aires S.A. ("IEBA"), which
in turn owns 90% of Empresa Distribiudora de Energia Atlantica S.A. ("EDEA").
United Utilities International Limited, one of the largest electric
distributors in the United Kingdom, owns the remaining 45% of IBEA. The
employees of EDEA own the remaining 10% of EDEA.
Camuzzi Pampeana serves approximately 770,000 customers in Buenos Aires
province (but not in the city of Buenos Aires itself). Camuzzi del Sur
serves approximately 354,000 customers in Argentina to the south of Buenos
Aires. Camuzzi Pampeana and Camuzzi del Sur together sell approximately 335
bcf of natural gas per year. EDEA serves approximately 398,000 electric
customers in the province of Buenos Aires, delivering about 1,800 gigawatt-
hours a year.
On October 10, 2000 CNGI sold all of its interests in Sodigas, Sodigas
Sur and Baeco to Sempra Energy International ("Sempra") for $145,000,000.
Sempra Energy, the parent of Sempra, has guaranteed the payments to be made
to CNGI pursuant to the agreement; and DRI, the indirect parent of CNGI, has
guaranteed the payments and share deliveries to be made by CNGI to Sempra
under the agreement. No further reporting with respect to CNGI's formerly
owned interests in Argentina will be made by Rule 24 Certificate of
Notification.
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OTHER FOREIGN INVESTMENTS
Australian Pipeline Projects
____________________________
In December of 1996, CNGI acquired , through intermediate subsidiaries,
a 30 percent interest in Epic Energy Pty. Ltd. ("Epic"), an Australian
corporation. The other shareholders in Epic, as of June 30, 1999, were
Venture Holdings Pty. Ltd., a subsidiary of El Paso International Company
(30%); Australian Mutual Provident Society, an Australian insurance company
and investment house (10%); Allgas Pipelines Pty. Ltd. ("Allgas"), a gas
distribution utility in Brisbane, Queensland (10%); and SAS Trustee
Corporation (Axion) and Utilities of Australia Pty. Limited (Hastings), both
Australian investment managers (10% each). On December 19, 1996, Epic
purchased the Australian Pipeline Projects' assets, which it operates,
maintains and manages.
Allgas' 10% share in Epic was acquired indirectly in July 1999 by the
other shareholders through Epic Trust and its wholly-owned subsidiary, Epic
Energy Western Australia Investments Pty Ltd. CNGI's pro rata portion of the
purchase price for the additional interest in Epic was $6 million, which
amount is added to the $38.8 million originally invested under the November
19, 1996 order to increase the aggregate amount invested under the
authorization to $44.8 million.
The Australian Pipeline Projects' assets were 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
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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.
Dampier-to-Bunbury Pipeline
___________________________
In March 1998, CNGI paid approximately $143 million to acquire its 33.3%
equity interest, through intermediate subsidiaries including Epic Energy
Australia Trust ("Epic Trust"), in the Dampier-to-Bunbury Natural Gas
Pipeline ("DBNGP") from the Western Australia Government. The partners in
Epic Trust are the same as the shareholders in Epic, as of June 30, 1999,
with the exception of Allgas, which declined to invest in DBNGP. Allgas'
otherwise 10% share in Epic Trust was acquired pro rata by those investing in
the pipeline. DBNGP is a 925 mile natural gas pipeline running from Dampier
to Bunbury in Western Australia. It transports natural gas from offshore and
onshore fields in the northwest of Western Australia, which holds Australia's
largest reserves of natural gas. Epic now operates the DBNGP.
In connection with their investment in DBNGP, CNGI and a subsidiary of
El Paso Energy Corporation formed DBNGP Finance Company LLC ("DBNGP
Finance"); DBNGP Finance is 50% owned by each of the parent companies. The
equity ownership interests in DBNGP held by the parent companies were
transferred to DBNGP Finance.
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On October 2, 1998, DBNGP Finance borrowed $250 million under a senior
term loan facility ("Term Loan"). The Term Loan matures October 2, 2001, can
be extended in one-year increments to October 2, 2003, and bears interest at
a variable rate. Of the gross proceeds received by DBNGP Finance under the
Term Loan, $100 million was distributed to CNGI. In connection with the Term
Loan, CNGI entered into an equity contribution agreement with DBNGP Finance.
CNGI is contractually obligated to make equity contributions to DBNGP Finance
equal to the proceeds distributed to CNGI, plus interest on such proceeds.
CNG is contractually obligated to cause CNGI to make such equity
contributions.
Epic Reorganization
___________________
In June of 2000 a reorganization ("Reorganization") was undertaken for
the purpose of combining CNGI's pipeline ownership interests in eastern
Australia and in western Australia under DBNGP and to place the interests in
eastern Australia under the Epic Trust. The main business purpose of this
realignment of interests was to eliminate duplication of services, and the
simplification of management and future financing. The Reorganization was
effected through two steps. The first step consisted of transferring
ownership of CNG Cayman One Ltd. ("Cayman One") from CNGI to CNG Cayman Two
Ltd. ("Cayman Two"). This was accomplished by CNGI transferring all of the
outstanding shares of common stock of Cayman One to Cayman Two in return for
additional shares of Cayman Two common stock. This resulted in Cayman One
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becoming a wholly-owned subsidiary of Cayman Two and an increase in CNGI's
combined direct and indirect ownership of Cayman Two from 50% to
approximately 61.5%. Since Cayman One owns CNGI's eastern Australia pipeline
interests and Cayman Two owns its western Australia pipeline interests, all
of CNGI's interests will now be held through Cayman Two.
Epic Trust formed Epic Energy East Pipeline, Pty, Ltd. ("Epic Energy
East") as a wholly-owned subsidiary for the purpose of consolidating
operations of all Epic Energy pipelines in Australia. The second step
involved the transfer by Cayman Two of all of the outstanding common stock of
Cayman One to Epic Energy East in exchange for an interest bearing note which
would immediately be contributed to Epic Trust in exchange for loan stock
(equity) of the Epic Trust.
The transactions comprising the Reorganization are all internal within
the chain of ownership which CNGI has with respect to its Australian
investments and do not involve any net ownership change in such investments.
Consequently such transactions are deemed to have been executed pursuant to
CNGI's authorization to invest in foreign energy markets through intermediary
subsidiaries.
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FINANCING
Combined balance sheet as of, and income statement for the nine months
ending, September 30, 2000 for CNGI, and its subsidiaries are filed
separately as part of this report under a claim for confidential treatment
pursuant to Rule 104.
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.
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 $5,182,000 from, and made
contributions of $36,000 to, the Money Pool. CNGI's balance in the Money
Pool on September 30, 2000 was a net borrowing of $21,363,000.
OTHER MATTERS
The business of CNGI was to participate in selected projects in
international markets in transactions either authorized by Commission order
in this proceeding or as permitted by statutory exemption. The proceeds of
the above described transactions were used by CNGI in such business.
Quarterly financial statements of CNGI are filed under separate cover
under a claim for confidential treatment pursuant to Rule 104(b).
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SIGNATURE
The undersigned companies have duly caused this quarterly Rule 24
Certificate of Notification to be signed on their behalf by their attorney
subscribing below duly authorized pursuant to the Public Utility Holding
Company Act of 1935.
CONSOLIDATED NATURAL GAS COMPANY
CNG INTERNATIONAL CORPORATION
By N. F. Chandler
Their Attorney
November 14, 2000
