Closing

Quietly closing the books on about six years of regulatory proceedings and stakeholder negotiations, the California Public Utilities Commission (CPUC) without discussion Thursday approved a program for trading firm capacity rights on Southern California Gas Co.’s transmission system serving the southern half of the state. It addition, the CPUC revised some terms on open season local transmission commitments and expansions, along with rejecting a protest by a coalition of Southern California electric generators.

After taking a breather on Thursday from the up move, natural gas futures traders resumed course on Friday, putting in a high of $6.640 before closing out the week at $6.601, up 30.9 cents on the day and 41.7 cents higher than the previous Friday’s close.

After trading between $7.910 and $8.180 on Monday, December natural gas futures ended up closing at $8.019, down 16 cents from last Friday’s close. Even though the contract stayed firmly within its recent trading range, the drop was a little bit unexpected as the East Coast dipped to more seasonable cold temperatures.

Trading within a 20-cent range on the day, June natural gas futures on Friday seemed content to bounce between $5.880 and $6.080 before closing below $6.000 for the second consecutive session at $5.962, down 3.5 cents on the day and 31.8 cents lower than the previous week’s close.

The trap door remained wide open Tuesday as January natural gas continued to plummet, carving out a low of $10.960 in afternoon trade before closing at $11.022, down $1.261 for the day. The move brings the contract’s three-day decline to $3.249.

After staking out a session low of $13.75 in morning trade, November natural gas futures steadily climbed for the remainder of the session Tuesday, hitting a high of $14.24 before closing at $14.224, up 20.7 cents on the day.

Equitable Resources announced the closing of a $147 million sale of non-core gas properties to NCL Appalachian Partners, a partnership between Locin Oil Corp. and GE Commercial Finance Energy Financial Services. Equitable sold an estimated 66 Bcf of proved reserves, of which 59 Bcf were developed. Equitable expects that no gain or loss will be recorded and reiterated its 2005 supply sales estimate of 73 Bcf.

Natural gas pipeline partnership Northern Border Partners LP said strong gas prices and the gain from the sale of a Canadian pipeline stake will push its earnings forecast for 2004 about 10 cents above Wall Street estimates. Net income for 2004 is expected to range between $141-144 million ($2.81-2.77/unit), including a $3.4 million (7 cents/unit) gain from selling a stake in its Gregg Lake/Obed Pipeline in Alberta. The Partnership sold its interest in the Alberta pipe in mid-December for $13.8 million. Other items affecting 2004 results include favorable pricing of natural gas and natural gas liquids in the Williston Basin; accounting for financing costs; and adjustments to reserves made in the normal course of business. Wall Street analysts had pegged 2004 average earnings at $2.71/unit.

Despite closing almost 2 cents up on the day, some market-watchers considered Tuesday a loss for August natural gas futures as morning trading levels as high as $5.96 could not be sustained. The prompt month tapped out at $5.805 on the downside in afternoon trading before settling at $5.837, up 1.9 cents on the day.