Contract

The November natural gas futures contract closed down 3.1 centsyesterday at $2.824 after trimming gains notched earlier in thesession. After a spirited sell-off in Tuesday’s Access trading, thenewly crowned prompt month erupted higher Wednesday to print a$2.94 high as buyers picked up contracts which they hope willrepresent bargains heading into the winter heating season. Byafternoon, however, the market banter had turned once again tobearish storage predictions and that pressured the market lower inlight trade.

A room full of producers was asked last week in Houston whetherthey would contract to sell gas for $3 for 10 years, adjusted forinflation. Only a smattering of hands went up. Clearly, optimismhas returned to the industry.

A room full of producers was asked yesterday in Houston whetherthey would contract to sell gas for $3.00 for 10 years, adjustedfor inflation. Only a small smattering of hands went up. Clearly,optimism has returned to the industry.

Cash prices rode a soaring October futures contract,stilll-strong power generation demand and the remote threat ofTropical Storm Floyd to higher levels again Thursday. Gains wereslowing down from Wednesday’s pace but ranged from 2-3 cents at afew points to about a dime at many of them.

Duke/Fluor Daniel has been awarded a contract by West GeorgiaGenerating Co. L.P., a subsidiary of Sonat Energy Services, toprovide engineering, procurement and construction services for a650 MW dual fuel, gas and distillate oil-fired power plant in UpsonCounty, GA. The power plant will be designed to use four PG7241(FA) gas turbines in simple-cycle operation. The $180 million powerplant, which will be built within the Thomaston Industrial Park inUpson County, is expected to be fully operational by June 1, 2000.A significant portion of the electricity from the plant will besold to Georgia Power under an existing power sales agreement.

Cinergy Corp. said yesterday it expects to take a $57 millionafter-tax charge ($0.36 per share) on July earnings because it hadto pay exorbitant prices in the wholesale market to maintaindeliveries during a period of peak demand in late July. The chargealso includes $16 million to settle damage claims related toCinergy’s defaults on several power marketing agreements.

CMP Natural Gas (CMPNG) said it has signed a long-term contract to deliver gas on a proposed pipeline lateral to a 540 MW gas-fired power plant being built in Westbrook, ME, by Calpine Corp. Construction of the $200 million electric generating facility is under way and Calpine said it will require gas service by June 1, 2000.

CMP Natural Gas (CMPNG) said it has signed a long-term contractto deliver gas on a proposed pipeline lateral to a 540 MW gas-firedpower plant being built in Westbrook, ME, by Calpine Corp.Construction of the $200 million electric generating facility isunder way and Calpine said it will require gas service by June 1,2000.

After a spirited rally Tuesday that propelled the Augustcontract to its highest level since July 15, the market took abreather Wednesday as traders elected to wait on the sidelinesahead of fresh fundamental news. The prompt month finished down 0.6cents at $2.394 in choppy, range-bound trading.