Commodities

Macquarie Cook Energy LLC and Constellation Energy Commodities Group Inc.(CECG) have urged FERC to grant their request for a 90-day waiver of capacity release rules so the companies can complete the first part of the sale of the Constellation trading group to Macquarie on or about Feb. 23. The companies asked the Commission to put aside for later discussion Dominion’s petition for a policy review regarding waivers.

Thorny issues of foreign ownership of U.S. energy infrastructure assets could arise in the recently announced partnership of RBS Sempra Commodities and the Abu Dhabi national energy Company, TAQA, which is seeking a stake of up to 10,000 MW in U.S. generating assets. An RBS Sempra executive told NGI last Monday the partners recognized the issue loomed and have filed with a multi-agency committee headed by the U.S. Treasury Department for a review of the partnership’s first deal, which was announced Dec. 10.

Thorny issues of foreign ownership of U.S. energy infrastructure assets could arise in the recently announced partnership of RBS Sempra Commodities and the Abu Dhabi national energy Company, TAQA, which is seeking a stake of up to 10,000 MW in U.S. generating assets. An RBS Sempra manager told NGI Monday the partners recognized the issue loomed and have filed with a multi-agency committee headed by the U.S. Treasury Department for a review of the partnership’s first deal, which was announced last Wednesday.

As stock markets rebounded Monday on news of bank rescue plans across the globe, so to did energy commodities, which have been mimicking the financial twists and turns as of late. November natural gas futures climbed 15.3 cents to close at $6.688 while November crude futures added $3.49 to close at $81.19/bbl.

More than 76 Bcf of natural gas, or 240,000 MMBtu/d, was sold to four companies — Constellation Energy Commodities Group Inc., Oneok Energy Services Co., Sempra Energy Trading and Shell Energy North America — in a federal Royalty in Kind (RIK) onshore gas sale conducted in early October by the Department of the Interior’s Minerals Management Service (MMS). Eleven companies submitted 75 bids for RIK gas located on federal lands in the Jonah-Pinedale area in western Wyoming. The gas was sold under five- or 12-month contracts, with delivery scheduled to begin on Nov.1. If current natural gas prices in the area were to remain at $5/MMBtu, the sale would equate to more than $384 million in total gross revenues, MMS stated. Wyoming will receive nearly 50% of the revenues generated by the sale of gas from federal lands in the state.

With no shortage of prognosticators on commodities markets it’s important that traders and energy buyers do their own homework, former trader Tony Kolton told an audience of gas utility executives last Tuesday.

With no shortage of prognosticators on commodities markets it’s important that traders and energy buyers do their own homework, former trader Tony Kolton told an audience of gas utility executives Tuesday.

The natural gas price declines in early July mirrored a broader sell-off in commodities and occurred before bearish data became available, but most of the price adjustments resulted from the “sudden loosening of the supply and demand balance,” which was evident in storage data issued by the Energy Information Administration, Lehman Brothers analysts said Monday. Early in the summer the market appeared tighter than a year earlier, but it’s now “significantly looser” and U.S. inventories are forecast to close the deficit by the end of the injection season.

The Long Beach, CA, municipal gas utility’s 30-year, $900 million natural gas pre-pay supply contract with Merrill Lynch Commodities Inc. closes Thursday, drawing an “AA-” rating for its city finance authority, which marketed two series of revenue bonds to support the deal. Up to 90% of the muni’s long-term supply needs will be satisfied under this deal, the city said. Chris Garner, general manager of the Long Beach Utility Department, received authorization from the city council in August to proceed with the pre-pay deal (see Daily GPI, Aug. 27). With more than 400,000 residents about 25 miles southeast of Los Angeles, the port city has an annual natural gas load of 12 Bcf. Supplies in the pre-pay deal could come from wherever Merrill Lynch can get them and guarantee they can get into the Southern California Gas Co. transmission system, to which Long Beach’s distribution system is connected, Garner said.