The Federal Energy Regulatory Commission approved an expansion of Columbia Gas Transmission Corp.’s pipeline to provide 125,000 Dth/d of additional capacity for a new power plant at the Pennsylvania-Delaware border. The project will provide service to FPL Energy’s 750 MW Marcus Hook power plant. The plant would be built in both New Castle County, DE, and Delaware County, PA. The $22.3 million pipeline expansion project, which is expected to be completed this fall, would involve adding an extension from the company’s mainline to the plant and upgrading compressor stations. Two 6,000 hp compressors will be added to the Eagle and Downingtown stations on its mainline in Chester County, PA, and 1.3 miles of 20-inch diameter lateral will be added from Columbia’s Delmarva meter station on Line 1-345 in New Castle County DE. FERC said Columbia could roll in the expansion and replacement project costs with it existing rates, given that this will result in a reduction in rates for existing customers. The replacement phase of the project calls for Columbia to remove two aged compressors at its Downingtown station.
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Modest Storage Withdrawal Prompts Additional Short Selling
Breaking out of the extremely-tight, 4-cent trading range that corralled prices for much of the session, natural gas futures moved lower Wednesday afternoon on the heels of a disappointing (for bull traders) announcement that only 124 Bcf was pulled from storage last week. The selling pressure was felt immediately after the 2 p.m. EST release and by 2:30 p.m. February had sunk to a new, life-of-contract low at $2.04. A slight up-tick at the closing bell lifted the prompt month to a $2.076 settle, down 3 cents for the session.
XTO Hedges Approximately 80% of 2002 Volumes at $3.88
Fort Worth, TX-based XTO Energy Inc. announced that in order to provide stability in the future, it has hedged additional natural gas volumes. The company reported it has now locked in approximately 80% of its projected 2002 natural gas production at an average NYMEX price of $3.88/Mcf.
More Duke Power Plant Workers Come Forward
Two additional former San Diego Gas & Electric employees who worked at Duke Energy’s South Bay Power Plant in Chula Vista, CA, came forward Thursday in a press conference in Sacramento hosted by California’s Lt. Gov. Cruz Bustamante, adding to allegations that the merchant generator manipulated the power plant’s operations to drive up wholesale prices earlier in the year.
Green Canyon Deepwater Discovery Surpasses Estimates
Though additional wells need to be drilled before the total proved reserves are accurately measured, Murphy Oil Co. announced Thursday that its Front Runner South prospect in Green Canyon Block 339 offshore Louisiana has exceeded expectations. The reserve estimate is expected to be more than the pre-drill projection of 40-60 MMboe.
Critics Cite Mystery of ‘Unused’ Capacity on El Paso
More than 1 Bcf/d of additional transportation capacity on El Paso Natural Gas was available to serve the gas-starved California market last year, but it went unused, claimed a witness for Southern California Edison during a FERC hearing yesterday exploring price-manipulation charges against the pipeline and its merchant power affiliates.
FERC Offers Additional Guidance On CA Mitigation Order
Seeking to flesh out several key points of a sweeping market monitoring and mitigation plan for California’s ailing energy markets, FERC recently said that it expects California’s Independent System Operator (Cal-ISO) to ensure the presence of a creditworthy buyer for all transactions made with any generator that offers power in compliance with a must-offer requirement included in the monitoring and mitigation plan.
FERC Offers Additional Guidance On CA Mitigation Order
Seeking to flesh out several key points of a sweeping market monitoring and mitigation plan for California’s ailing energy markets, FERC last week said that it expects California’s Independent System Operator (Cal-ISO) to ensure the presence of a creditworthy buyer for all transactions made with any generator that offers power in compliance with a must-offer requirement included in the monitoring and mitigation plan.
Industry Brief
As the moratorium on utility service terminations for low-income customers came to an end, Baltimore Gas and Electric (BGE) vowed that its customers can expect additional assistance from the utility to keep their service on. The Maryland Public Service Commission’s winter service protection was lifted on March 31, BGE said it will continue to work with customers after the deadline “We know the end of the moratorium might cause more concern for our customers already in a difficult situation,” says Frank O. Heintz, president of BGE. “We want these customers to know we will remain flexible in helping them find the best solution for their circumstances.” Customers having trouble handling their winter utility bill should call BGE at 410-685-0123.
Gas-Rich Independents to Attract Buyers,
Other analysts covering Barrett also said they expect to seeadditional consolidation of U.S. independents with a heavy gasportfolio, especially now that the majors and larger independentsare flush with cash from through-the-roof commodity pricing in thepast year.
