File No. 70-8963
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
____________________________________________
AMENDMENT NO. 1 TO
FORM U-1
APPLICATION-DECLARATION
under
the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
____________________________________________
National Fuel Gas Company National Fuel Gas
10 Lafayette Square Distribution Corporation
Buffalo, New York 14203 10 Lafayette Square
Buffalo, New York 14203
National Fuel Gas Seneca Resources Corporation
Supply Corporation 10 Lafayette Square
10 Lafayette Square Buffalo, New York 14203
Buffalo, New York 14203
Utility Constructors, Inc. Highland Land & Minerals, Inc.
East Erie Extension 10 Lafayette Square
Linesville, Pennsylvania 16424 Buffalo, New York 14203
Leidy Hub, Inc. Data-Track Account
10 Lafayette Square Services, Inc.
Buffalo, New York 14203 10 Lafayette Square
Buffalo, New York 14203
National Fuel Resources, Inc. Horizon Energy
478 Main Street Development, Inc.
Buffalo, New York 14202 10 Lafayette Square
Buffalo, New York 14203
(Names of companies filing this statement
and addresses of principal executive offices)
_____________________________________________
NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)
_____________________________________________
Philip C. Ackerman William T. Baker, Jr., Esq.
Senior Vice President Robert J. Reger, Jr., Esq.
National Fuel Gas Company Reid & Priest LLP
10 Lafayette Square 40 West 57th Street
Buffalo, New York 14203 New York, New York 10019
(Names and addresses of agents for service)
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Item 1. Description of Proposed Transactions.
The first and second sentences of paragraph 1.1 of Item
1 are revised in their entirety to read as follows:
"National Fuel Gas Company ("National") is a public-
utility holding company registered under the Public Utility
Holding Company Act of 1935, as amended (the "1935 Act" or
"Act"). National Fuel Gas Supply Corporation ("Supply"),
National Fuel Gas Distribution Corporation, Seneca Resources
Corporation, Utility Constructors, Inc., Highland Land &
Minerals, Inc., Leidy Hub, Inc., Data-Track Account Services,
Inc., National Fuel Resources, Inc., and Horizon Energy
Development, Inc., are each wholly-owned subsidiaries of National.
National and Supply seek authority to participate in a joint venture
("Joint Venture") with one or more subsidiaries of Tennessee Gas
Pipeline Company ("Tennessee"), a non-affiliate, to develop,
construct, finance, own and operate (i) natural gas gathering
facilities commencing at locations offshore to gather gas produced
in the Green Canyon, Ewing Bank, Mississippi Canyon, Ship Shoal and
South Timbalier areas located in the Outer Continental Shelf and
terminating onshore in Louisiana ("Gathering Facilities") and
(ii) natural gas processing facilities to be located at or near
the terminus of the Gathering Facilities ("Processing
Facilities"), and to engage in certain related transactions
(collectively, the "Project"). The aggregate cost of the Project
is estimated to be not more than $250 million, including
development, construction and related costs until commercial
<PAGE>
operation, currently scheduled to begin in the fourth calendar
quarter of 1997."
The last sentence of paragraph 1.3 of Item 1 is revised
in its entirety to read as follows:
"Interests in the Special Purpose Entities would be held
50% by a direct or indirect (through Supply) subsidiary of
National (the "Affiliate"), and 50% by an affiliate of Tennessee
(the "Tennessee Affiliate")."
Footnote 2 in paragraph 1.3 of Item 1 is revised in its
entirety to read as follows:
"2. It is contemplated that the Affiliate will be a
new corporation formed by Tennessee. Upon Commission
authorization of the transactions proposed herein, National will
purchase directly or indirectly (through Supply) any and all of
the outstanding stock of the Affiliate from Tennessee for a
nominal price."
Paragraph 1.4 of Item 1 is revised in its entirety to
read as follows:
"1.4 Financing of the Project. Applicants contemplate
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that the costs of the Project shall be financed in the following
manner:
(a) Development Costs. Each of National and Tennessee
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will bear one-half of the development costs of the Project.
Development costs do not include the purchase of any pipeline
materials, processing plant equipment and other Project materials
(collectively, "Project Materials"). National's share of the
development costs may be paid initially by Supply, and then
reimbursed by the Affiliate and/or the Special Purpose
Entities.<1>
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1. Upon receipt of Commission authorization of the transactions
proposed herein, Supply will be reimbursed for National's portion
of the development costs by the Affiliate at cost. The Project
Materials and Land costs will be paid by Supply if the Special
Purpose Entities are not formed at that time. Upon receipt of
Commission authorization of the transactions proposed herein,
Supply will be reimbursed by the Special Purpose Entities for
Project Materials at cost plus interest at an annual rate equal
to the actual interest rate charged on outstanding borrowings
from the money pool arrangement between National and its
subsidiary companies (SEC File No. 70-8729).
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<PAGE>
Thereafter, the Special Purpose Entities would be responsible for
completing the Project.
(b) Construction Financing. The Affiliate will
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arrange for, or provide, construction financing (the
"Construction Financing") for the Special Purpose Entities for
the costs of constructing the Project from the date of execution
of definitive agreements until the facilities are placed into
commercial operation. The borrower would be the Special Purpose
Entities that own the Project. Interest would accrue on any
funds loaned by the Affiliate at an annual rate no less than the
actual interest rate charged on outstanding borrowings from the
money pool arrangement between National and its subsidiaries (the
"Construction Financing Rate"). The Construction Financing would
be with recourse to the Special Purpose Entities, as well as the
Affiliate and the Tennessee Affiliate. Each of the Affiliate and
the Tennessee Affiliate would provide, in a form acceptable to
the other, a guarantee regarding repayment of the Construction
Financing. The Construction Financing would be repaid by the
Special Purpose Entities in full upon commencement of commercial
operation of the Project.
It is contemplated that upon commencement of commercial
operation of the Project, the Construction Financing would be
taken out with a combination of debt and equity financing. The
Affiliate and the Tennessee Affiliate will cooperate and will use
commercially reasonable efforts to attempt to obtain non-recourse
project financing from lenders for at least 70% of the costs of
the Project effective upon placement of the facilities into
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<PAGE>
commercial operation, with each of the Affiliate and the
Tennessee Affiliate contributing equity to the Special Purpose
Entities equal to 15% of the costs of the Project. If despite
such efforts, the Affiliate and the Tennessee Affiliate are
required by the lenders to contribute more than 30% of the costs
of the Project or to provide recourse to any level above the
Special Purpose Entities or the Affiliate and the Tennessee
Affiliate of more than 30% of the costs of the Project ("Excess
Amount"), then, National or the Affiliate will (i) provide
guarantees or make arrangements for recourse to National or the
Affiliate for the Excess Amount, such guarantees or arrangements
to terminate on the second anniversary of the first date of
commercial operation of the Project (the "Second Anniversary") or
(ii) in the event National or the Affiliate are unable, despite
the use of commercially reasonable efforts, to implement the
alternative set forth in (i) above, then National or the
Affiliate will provide, or cause to be provided, non-recourse
debt secured by Project assets for the Excess Amount, to be due
on the Second Anniversary (the "Interim Financing").
If National provides guarantees or recourse
arrangements, then on the Second Anniversary, the Affiliate and
the Tennessee Affiliate will be required to make substitute
recourse arrangements with lenders, or in the alternative, make
additional equity contributions to the Special Purpose Entities
on a 50/50 basis as necessary.<2> In the event of failure, or
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2. As discussed in Item I infra, the aggregate cost of the
Project is estimated to be not more than $250 million.
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<PAGE>
refusal, of the Special Purpose Entities to repay any non-
recourse debt secured by the Project assets to National or the
Affiliate, the Affiliate and the Tennessee Affiliate will be
required to make additional equity contributions to the Special
Purpose Entities on a 50/50 basis for the repayment of such
obligations."
Paragraph 1.5 of Item 1 is revised in its entirety to
read as follows:
"1.5 Financing by National System for the Project.
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Supply and/or the Affiliate will fund National's share of the
development costs and a development fee to be paid by the
Affiliate to Tennessee or one of its designated affiliates,
through borrowings from the money pool arrangement between
National and its subsidiaries described in the following
paragraph. In addition, as referenced above, Supply may incur,
in the normal course of its business certain Project Materials
and Land costs.<3> These costs will also be funded through
borrowings from the money pool arrangement between National and
its subsidiaries described in the following paragraph.
National may make loans to the Affiliate for the
financing of its activities, including financing of the
activities of the Special Purpose Entities. It is contemplated
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3. As described above, it is contemplated that Supply will be
reimbursed, for such Project Material and Land costs by the
Special Purpose Entities upon receipt of Commission authorization
in this file. The Affiliate's portion of the development costs
will be in the form of a contribution by the Affiliate to the
Special Purpose Entities.
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<PAGE>
that any loans to the Affiliate for the purpose of Construction
Financing may be made pursuant to, and in accordance with, the
current (and any successor) money pool arrangement between
National and its subsidiaries (the "Money Pool Arrangement") (see
SEC File No. 70-8729 for the current Money Pool Arrangement).
Such loans to the Affiliate and/or Supply, to the extent needed
in connection with the Project, shall not exceed in the aggregate
$250 million in principal amount at any one time outstanding.
Any Construction Financing made pursuant to the Money Pool
Arrangement will be repaid upon commencement of commercial
operation of the Project. Thereafter, it is contemplated that
any loans to the Affiliate for use as Interim Financing or equity
contributions may be made pursuant to, and in accordance with,
the current (and any successor) long-term debt program of
National and certain of its subsidiaries. (see SEC File No. 70-
8541 for the current long-term debt arrangements). These long-
term loans to the Affiliate shall not exceed $210 million in
principal amount at any one time outstanding. All loans by
National to the Affiliate shall not in the aggregate exceed $250
million in principal amount at any one time outstanding.
National requests that the Affiliate be added to the group of
subsidiary companies of National which can make short or long-
term borrowings pursuant to the authorization in File Nos. 70-
8729 and 70-8541.<4>
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4. As appropriate, various financings and extensions of credit,
by, and among, National, Supply, the Affiliate and the subsidiary
companies, and affiliates, of the Affiliate, in the future will,
or may be, exempt from Commission authorization pursuant to Rules
16, 45 and 52 under the Act, as in effect, or as they may be amended
from time to time.
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<PAGE>
It is contemplated that National may enter into
guarantee arrangements, obtain letters of credit, and otherwise
provide credit support with respect to obligations of the
Affiliate and one-half of the obligations of the Special Purpose
Entities<5>, to third parties as may be needed and appropriate to
enable them to carry on in the ordinary course of their respective
businesses, including as necessary for the Construction Financing.
If interim financing is necessary, National may be required to enter
into additional credit support arrangements with respect to
obligations of the Special Purpose Entitites to the extent of the
Execess Amount.<6>
Any credit support may be made pursuant to, and in accordance with,
the current (and any successor) credit support arrangement between
National and its subsidiaries (see SEC File No. 70-8251 for the
current credit support arrangements). The maximum aggregate limit
on all credit support by National to the Affiliate and the Special
Purpose Entities will be $175 million at any one time outstanding,
including as necessary for the Interim Financing and the Construction
Financing. National requests that the Affiliate and the Special
Purpose Entities be added to the group of subsidiary companies of
National to which National may give credit support pursuant to the
authorizations in File No. 70-8251.<7> National further requests
that the Affiliate,
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5. Any credit support made by National with respect to obligations
of the Special Purpose Entitities, except for credit support
obligations in connection with the Excess Amount, will be
accompanied by a similar credit support arrangement in equal
amount from Tennessee or an affiliate thereof.
6. Tennessee will not be responsible for the credit support
arrangements necessary for the Excess Amount, if any.
7. As appropriate, various financings and extensions of credit,
by, and among, National, Supply, the Affiliate and the subsidiary
companies, and affiliates, of the Affiliate, in the future will,
or may be, exempt from Commission authorization pursuant to Rules
(continued . . .)
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<PAGE>
either by itself or together with National, be permitted to
provide such credit support to the Special Purpose Entities up to
the $175 million limit at any one time outstanding."
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7. (continued . . .)
16, 45 and 52 under the Act, as in effect, or as they may be
amended from time to time.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Public Utility
Holding Company Act of 1935, the undersigned companies have duly
caused this amendment to be signed on their behalf by the
undersigned thereunto duly authorized.
NATIONAL FUEL GAS COMPANY NATIONAL FUEL GAS DISTRIBUTION
CORPORATION
By /s/ P. C. Ackerman By /s/ David F. Smith
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Name: P.C. Ackerman Name: David F. Smith
Title: Senior Vice President Title: Senior Vice President
NATIONAL FUEL GAS SUPPLY SENECA RESOURCES CORPORATION
CORPORATION
By /s/ Richard Hare By /s/James A. Beck
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Name: Richard Hare Name: James A. Beck
Title: President Title: President
UTILITY CONSTRUCTORS, INC. HIGHLAND LAND & MINERALS, INC.
By /s/David F. Smith By /s/ P.C. Ackerman
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Name: David F. Smith Name: P. C. Ackerman
Title: Secretary Title: President
LEIDY HUB, INC. DATA-TRACK ACCOUNT
SERVICES, INC.
By /s/Walter E. DeForest By /s/David F. Smith
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Name: Walter E. DeForest Name: David F. Smith
Title: President Title: Secretary
NATIONAL FUEL RESOURCES, INC. HORIZON ENERGY
DEVELOPMENT, INC.
By /s/ R. J. Tanski By /s/Bruce H. Hale
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Name: R.J. Tanski Name: Bruce H. Hale
Title: Secretary Title: Vice President
DATED: December 16, 1996
