April

Southern California Gas did not extend a high-linepack OFO beyond Wednesday.

The average monthly wellhead natural gas price fell from a record high of $10.35/Mcf in October 2005 to $5.03/Mcf in October 2006, which was the lowest monthly average since April 2004. But when one steps back a bit and looks at the market on an annual basis the 2006 roller coaster looks a bit smaller.

The average monthly wellhead natural gas price fell from a record high of $10.35/Mcf in October 2005 to $5.03/Mcf in October 2006, which was the lowest monthly average since April 2004. But when one steps back a bit and looks at the market on an annual basis the 2006 roller coaster looks a bit smaller.

PetroLogistics Natural Gas Storage LLC is holding an open season through April 11 for 1 Bcf of firm gas storage service at its proposed 6 Bcf salt dome storage cavern, which will be located at the Choctaw storage facility in Iberville Parish, LA. The open season will offer contracts for up to 20 years. BG Energy Merchants LLC is the anchor customer of the project, and it has executed a precedent agreement under which it will contract for a minimum of 5 Bcf of firm storage capacity and associated injection and withdrawal rights, according to PetroLogistics. BG has agreed to purchase any firm capacity remaining after the open season is completed. PetroLogistics intends to file for a facility certificate with the Federal Energy Regulatory Commission following the open season. Certificate authority is expected by Nov. 1, and facilities could be in service by Sept. 1, 2008, the company said. The facility and header pipeline will be capable of receiving and delivering gas from and to Southern Natural Gas Co., Texas Eastern Transmission Corp., Florida Gas Transmission Co., Bridgeline Pipeline System and CrossTex LIG Pipeline Co. The facility will be capable of storing up to 6 Bcf, receiving 150-375 MMBtu/d for injection and delivering up to 300 MMBtu/d. To review the offer sheet and bid information, click here. For more information, contact Nathan Ticatch, PetroLogistics Natural Gas Storage LLC, 909 Fannin, Suite 2630, Houston, TX, 77010; or via email at ticatch@petrologistics.com.

With expectations rising for a projected natural gas storage surplus of nearly 600 Bcf (versus 10-year norms) by late April, the gas-to-resid spread should range between minus 50 cents/MMBtu to plus $1.00, implying a “likely” May Henry Hub bidweek price of $5.75-7.25/MMBtu, according to Stephen Smith Energy Associates.

The cash and natural gas futures markets read like a”A Tale of Two Cities” Wednesday as most cash points dropped while the April futures contract staged a quarter rally to close at $7.160. Moderating temperatures expected to swoop in for the remainder of the week allowed the Northeast to record declines ranging from just shy of a nickel to 43 cents, the latter of which was recorded by Dracut putting gas for delivery on Thursday at that location at $7.18.

With expectations rising for a projected natural gas storage surplus of nearly 600 Bcf (versus 10-year norms) by late April, the gas-to-resid spread should range between minus 50 cents/MMBtu to plus $1.00, implying a “likely” May Henry Hub bidweek price of $5.75-7.25/MMBtu, according to Stephen Smith Energy Associates.

Gas storage withdrawals last week may have broken the weekly record set Jan. 17, 1997 at more than 260 Bcf, according to a number of forecasters. Not only did the severe cold early in the week send gas demand to peak levels on some northeastern local distribution systems, but the extended cold also sustained high withdrawals for multiple days.

AGL Resources’ Jefferson Island Storage & Hub (JISH) said it is taking bids on 1.1 million Dth of firm storage capacity that will be available starting April 1, 2007 at its 7.2 MMDth salt dome gas storage facility in Erath, LA, near the Henry Hub. The company also is testing the market for interest in a fourth storage cavern at the facility that would be in service in 2011.