Usually when sources refer to “following the screen,” it meansfutures trading influencing cash prices up or down in the samedirection. Thursday it was a case of cash following the screennowhere. Lack of movement in Nymex’s September contract wasreplicated by general flatness for physical gas.
But although it occurred too late to affect Thursday’s daytrading, a fire at a big San Juan Basin processing plant (seeTransportation Notes) had Southwest traders scrambling to assessits impact on their deals and to line up replacement supplies. TheChaco plant fire in northwest New Mexico took throughput of about450 MMcf/d off the market temporarily
San Juan and Southern California border prices were going uplate in a supply squeeze, a marketer said, but that was before theChaco situation arose. California prices are being propped bycontinuing hot weather in the West, another trader said. Also,storage is not so much a price depressant in the West, he added.While Eastern producing and consuming regions are way ahead of thegame on storage refills, the trader said, the West is laggingbehind, causing some uncertainty for the winter months.
Meanwhile, Southwest and California border prices are expectedto rise today based on the Chaco outage and other constraints onboth El Paso and Tranwestern. A marketer said he was getting callsfrom various producers behind the Chaco plant claiming forcemajeure, and in turn he was making calls to try to source gaselsewhere. It’s a pretty chaotic situation right now, he said, “andwe won’t be able to straighten things until we know more.”
Others had similar reports, but the main question for everybodywas how long the outage would last. Although El Paso Field Serviceshad no estimate late Thursday for when Chaco would return toservice, Daily GPI sources expected the supply loss to continue atleast through the weekend due to the need for thorough inspectionof the plant.
Intra-Alberta numbers were falling about a dime into the upperC$1.80s as Alberta Natural Gas curtailments at Hawkins Creek (seeDaily GPI, Aug. 12) doubled to about 400 MMcf/d due to hottemperatures affecting the equipment, a marketer said. That wasbacking even more gas up into the province. However, the ANG workis scheduled to end by this evening, the marketer said.
Midcontinent traders still can’t be certain when the return ofAmoco’s Hugoton Jayhawk Plant to service will restore about 400MMcf/d to that market. A marketer said Williams had told him itwould be today, as earlier projected by Amoco (see Daily GPI, Aug.11), or Saturday. However, an Amoco spokesman said Thursday hecouldn’t specify a particular day for the plant’s return, only thatit would be “in mid-August.”
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