Backed

Backed up with a C$1 billion investment to recover at least 1Tcf, PanCanadian Petroleum Ltd. said it would immediately begincommercial development on its Deep Panuke offshore natural gasfield. Located about 250 kilometers southeast of Halifax, plateausales production from the field is expected to be 400 MMcf/dfollowing startup in early 2005.

Backed up with a C$1 billion investment to recover at least 1Tcf, PanCanadian Petroleum Ltd. said it would immediately begincommercial development on its Deep Panuke offshore natural gasfield. Located about 250 kilometers southeast of Halifax, plateausales production from the field is expected to be 400 MMcf/dfollowing startup in early 2005.

State-backed financial bailout options for California’s twocash-strapped utilities were being looked at Friday by the statelegislature and treasurer, including public takeover of the stategrid, as Gov. Gray Davis prepared to divulge his plan today priorto making another trip to Washington, D.C., in search of a federalcap on western wholesale electricity prices later this week.

The cash market resumed its climb Thursday, buoyed by a risingHenry Hub futures contract, a tightening supply situation,spreading cold weather and air conditioning load from Texas throughthe Southeast. A “lean” storage report Wednesday afternoon added tobullish sentiment, a marketer said.

Some sources seemed to think the cash market was manufacturingprice increases out of nothing Thursday. Others, however, said mildsupport from the futures trading pit combined with a cold frontmoving towards the East Coast to generate price firmness rangingfrom flat to up about a nickel. For a change there was nogeographic pattern in the market as the price gains tended to bescattered across all regions.

Producers and distributors last week indicated they generallybacked the thrust of FERC’s proposed rule to expand the blanketconstruction and abandonment certificate authority for pipelinesunder the Commission’s Part 157 regulations, but they – like thepipelines – saw some major problem areas with it.

A Canadian-backed merchant underground storage operator hasraised a red flag in California’s ongoing, but delayed, natural gasrestructuring proceedings by questioning how new energy marketplayers can compete with, but be dependent on, the state’s majorinvestor-owned utilities.

A key FERC official backed away Tuesday from the notion thatauctioning is the only way to market short-term pipeline capacityin the future.

Bulls have not had much to smile about in the last five monthsat the New York Mercantile Exchange, so it was to their surpriseand delight when a trio of factors — storage, technicals, andanother possible tropical storm — combined to lift the marketThursday. The three remaining months in 1998 all received an almostequal boost with October edging out the others slightly byadvancing 6 cents to settle at $1.712 in moderate trading activity.