Analysis

Some Gulf gas deliveries were in limbo Friday after Pogo Producing filed a last minute motion with FERC requesting immediate issuance of an order allocating receipt point capacity on Southern Natural Gas’ pipeline system upstream of the Toca, LA, processing plant, part of which was scheduled to be taken down for maintenance on Sunday reducing processing capability by 750 MMcf/d.

Gas prices are likely to average $6.10 at the Henry Hub this year and catapult over the $7 mark in 2005, according to consultants at Energy and Environmental Analysis Inc. in Arlington, VA. EEA said in a report Wednesday that despite adequate storage injections and average working gas levels, it expects prices for the rest of the injection season to average $6.45 at the Henry Hub.

The director of financial analysis for the Public Utility Commission of Texas (PUCT) recommended last week that $1.95 billion be trimmed from a $4.43 billion request by a CenterPoint Energy Inc. to recover the costs of stranded power plants, environmental controls and transition.

FERC last week issued an order allowing Commonwealth Edison Co. (ComEd) to integrate with PJM Interconnection on May 1, but said that it was “extremely troubled” by recent disclosures that the utility’s parent company was scrambling to procure additional capacity for the bi-directional pathway with PJM. FERC has referred the matter to its division of enforcement for a preliminary investigation.

According to a Lehman Brothers analysis, gas demand hit a 10-year low in 2003 primarily because of the impact of high gas prices on price sensitive end users, such as chemical production companies.

According to a Lehman Brothers analysis, gas demand hit a 10-year low in 2003 primarily because of the impact of high gas prices on price sensitive end users, such as chemical production companies.

The value of electric generating capacity has bottomed out, Energy Security Analysis Inc. (ESAI) concludes in its latest “CapacityWatch” report, a quarterly review of regional generation capacity markets.

Consultants at Energy Security Analysis Inc. (ESAI) said they expect the U.S. gas market to become the “sink” for any unwanted or spillover global LNG supply in the future, which could mean significant downward pressure on domestic gas prices at certain locations.

Consultants at Energy Security Analysis Inc. said they expect the U.S. gas market to become the “sink” for any unwanted or spillover global LNG supply in the future, which means significant downward gas price pressure and a struggle for domestic gas producers. However, not all market experts agree on that assessment. Benjamin Schlesinger, president of Schlesinger and Associates Inc. in Bethesda, MD, said that such fears are unfounded.