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Outages Boost San Juan, California; Heat Drives Rockies
With the exception of Western and Rockies delivery points,natural gas prices began the new week flat or leaning downward acouple of cents. There was support resulting from supplyconstraints in the San Juan Basin and forecasts for above normaltemperatures in the Rockies. However, cash prices for the rest ofthe country appeared to be held back by a weakening Nymex futuresscreen and moderate temperatures in major northeastern markets,sources said.
San Juan Blanco pool prices bucked the general softening trendby soaring more than 25 cents to trade in the low 90s range. Anumber of scheduled maintenance related outages on the El Pasosystem sent prices at the San Juan Basin and the southernCalifornia border on a roller coaster ride, sources said. El Pasoon Monday shut down two compressor stations downstream of its ChacoPlant for scheduled annual inspection (see Daily GPI, July 9). TheChaco plant is also shut down through Wednesday in conjunction withthe two stations and other maintenance work in the area, accordingto an El Paso spokesman. The outages are expected to cut San JuanBasin capacity by 450-500 MMcf/d for today’s flow, 330 MMcf/d onWednesday and are expected to be back to normal on Thursday.
“The Chaco outage is curtailing enough off the market to make itdifficult for gas to move West to the [California] border,” onesource said. “That caused the border-basin spread to blowout to 60cents at times [on Monday].” Gas for delivery at the SouthernCalifornia border gained almost 30 cents from where they left offfor the weekend.
Rockies points also joined the San Juan Basin’s rise, recoveringabout a dime from weekend levels. “Temperatures are forecast to beon the border of 100 degrees in the Rockies all week,” said onearea marketer explaining the price recovery in the region.”Utilities are going to be burning a lot of gas all weekend.” Inaddition, the outage at Amoco’s Hugoton Jayhawk Plant (see DailyGPI, July 13), which will be down all week, will help supportprices.
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