Soaring citygate numbers in the Northeast, where a major Nor’easter was forecast to develop during the weekend, ran against the grain of falling prices everywhere else Friday. Weather moderation was expected to begin in some areas early this week, and a prior-day 21.5-cent decline by January futures along with the decline of industrial load that occurs during a weekend contributed further negative guidance for Friday’s cash market.
Outside the Northeast losses were fairly consistent across geographic areas in ranging from a little less than a dime to a little more than 65 cents. Texas Eastern M-3, which rang up the day’s biggest drop, was the only Northeast citygate failing to rise.
The Northeast jumps ranged from about 45 cents to $1.75. Transco Zone 6’s New York City pool topped its previous high price of last week ($23.50 on Wednesday) with a $24 peak Friday and was averaging slightly above $20.
A trading representative for several independent producers said she and her colleagues were too busy shuffling nominations to talk Friday afternoon due to a rupture on a Columbia Gulf 30-inch diameter line.
A Columbia Gulf spokesman could not confirm the diameter, but said the force majeure rupture occurred about 1:50 p.m. CST on Line 100 just downstream of Delhi Compressor Station in northeast Louisiana. Line 100 is one of three coming north from South Louisiana, and all three were shut in for purposes of evaluation, according to a bulletin board posting. Line 300 was expected to be returned to service sometime Friday night.
A fire accompanied the blast but had been put out, the spokesman said, adding that Columbia Gulf received reports of injuries and one fatality but no details could be confirmed from emergency responders as of late Friday afternoon. The pipeline was assessing the situation and information was to be posted on the Navigator bulletin board as it became available. To the extent that upstream pipelines confirmed receipts into Columbia Gulf, Columbia Gulf “will confirm nominations to all delivery points on [its] system until further notice.”
A new storm was descending on the central and southern Plains Friday but bringing more snow than ice this time. It was due to move on into the Midwest and Northeast as the weekend went on. A strong cold front would bring a wintry feel to much of the Southeast by Sunday, but New Orleans was forecasted for a high in the mid 70s Saturday.
A marketer in the region said he expected Northeast prices to stay strong at least part-way into this week because forecasts now indicate that significant warming there won’t begin until about midweek. A lot of pipeline restrictions supplemented the weekend winter storm in driving Northeast citygates higher while prices softened elsewhere, he said.
Dominion declared a pair of OFOs to take effect Sunday due to takes off its system not being matched by sufficient receipts. Tennessee, Transco, Texas Eastern and Algonquin had already warned shippers against creation of due-pipe imbalances.
In other parts of the country MRT declared a System Protection Warning for Saturday, and out in the West LDC Southwest Gas issued a “hold to burn” notice due to excessive drafting on upstream pipelines.
A Midcontinent producer said central Oklahoma could get as much as two to four feet of snow, and levels might reach four to six feet in northern Oklahoma and Kansas. Considering such conditions, “I know it’s a bit baffling that we’re testing $7 support” in January futures again, he said, but remember there is still ample gas in storage and weather forecasts are turning more bearish through Christmas now. But he reported having heard some local private forecasters saying something different about more storms coming.
Storage will drop below last year’s level in the coming week and probably below 3 Tcf heading into January, the producer continued. Keep an eye on the $7 futures support level, he advised. “Remember where January ’07 went off — $5.838. We’re only seven trading days away from the January ’08 settle and about the same in storage, bigger rig count, warmer forecast and much higher oil prices than last year. We’ll see. Should make for a very interesting next few weeks!”
The start of interim partial firm service on Rockies Express (REX) to four downstream interconnects in Nebraska and Kansas (see Daily GPI, Nov. 16) has been further postponed. In an update posted Friday, REX said based upon progress made during the past week, it now anticipates that such service will not become available to firm shippers until late December. A week earlier it had pushed back the original expected date of Dec. 15 to Dec. 21. Regarding full service on the REX-West segment to Audrain, MO, the pipeline continues to estimate that may not be available until early February.
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