Except for falling San Juan Basin and Malin numbers, prices sawfairly substantial rebounds in post-weekend trading Monday. Coldweather prevailing throughout most of the eastern U.S., highlightedby a potentially severe winter storm developing in the Northeast,plus a large loss of offshore production, were primarilyresponsible for the firmness, sources said.

A huge chunk of Gulf of Mexico gas is off the market temporarilyafter Destin Pipeline had to shut down operations due to asuspected leak being found in a liquids line downstream of BPAmoco’s Pascagoula Gas Plant, into which Destin throughput feeds(see story, this issue). Destin volumes have averaged around 600MMcf/d in recent weeks.

Although Northeast citygate gains were among Monday’s largestoutside of the Southern California border, prices tended to beginthe morning near their high points and fall from there, a utilitybuyer in the region said. “I think people started to realize thatthe weather won’t get quite as cold as some predicted,” he said.However, he added, the brunt of the storm wasn’t due to be feltuntil toward Monday evening and today.

“We’re doing as much as we can with storage,” but flexibility iswaning, the buyer went on. His utility hit its peak withdrawalperiods during February, but inventories are ratcheting down now,he said. “That means customers can withdraw less and less gas eachday as storage pressures drop.”

After warning shippers several times in the past couple of weeksabout potential Underage Alert Day notices because of mildtemperatures in its market area, Florida Gas Transmission cited”near freezing temperatures in Florida” Monday in advising that anOverage Alert Day might become necessary today for the market areaeast of Station 12 in the western tip of the Florida Panhandle.

California border quotes continued to climb to an average ofmore than $29 and a peak of $36 due to field capacity restrictions,high demand as another storm besieged the area, a new Stage OneElectrical Emergency issued by Cal-ISO, and customer concerns ofSoCal Gas storage running low.

A major contributor to higher border prices is a today-onlycapacity cut of about 615,000 MMBtu/d on Transwestern’s San JuanLateral due to pigging (see Daily GPI, March2). Also, El Paso continued to extend through at least Monday alow-linepack OFO that had been issued last Wednesdayafternoon. However, a weekend shutdown of El Paso’s Keystone MainlineStation affecting 400 MMcf/d will end today.

SoCal Gas said it had 13.5 Bcf of working gas left in storagefacilities at the beginning of Monday’s gas day. The big LDC doesnot have a 100% daily balancing provision, as one Daily GPI sourcehad indicated last week. However, when a “peak day minimum” storagelevel is reached, SoCal’s tariff allows it to divert non-coresupplies to meet the needs of core customers as necessary, aspokesman said. The minimum is not a specific volume, but isestablished based on the utility’s evaluation of system operationsand demand, he said.

Non-core suppliers are paid for diverted gas at SoCal Gas’bidweek WACOG for the month, the spokesman continued. Although thesuppliers may worry about paying nearly $30 for swing gas currentlyand risking losing some of it for less than $13-14 in return, hesaid, “we don’t anticipate that any diversions will be necessary atall this winter.”

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