Cycles

Upending the natural gas day will not solve the regional problems of lack of pipeline capacity and, in fact, will undermine the reliability of deliveries, the Natural Gas Supply Association (NGSA) said, responding to FERC’s proposed changes in gas scheduling aimed at serving electric power load (see Daily GPI, March 20).

The different structures of the natural gas and power markets, disparate scheduling cycles and interstate natural gas pipeline constraints are the chief barriers to the efficient coordination of the two markets in the Northeast, regulators and industry officials said Monday.

After accepting limited nominations for two cycles of Sunday’s gas day, Ruby Pipeline said based on current pipeline conditions and imbalance payback quantities, it would be able to increase operationally available capacity for Monday “in excess of firm contracted capacity starting with the Evening Nomination Cycle (Cycle 2) tonight [Monday].” The return to service in excess of firm contract quantities ended the related force majeure event effective for Monday, Ruby added. See the bulletin board for other details on the pipeline’s restoration of service following a system shutdown caused Dec. 10 by a block valve yard fire in a remote area of Utah (see Daily GPI, Dec. 13).

A public commission established earlier this year to guide Marcellus Shale policy in Pennsylvania is recommending that the state consider an impact fee on natural gas drillers and look at conservation statutes that include forced pooling, among 96 total recommendations.

The shift to shales — and the rise in oil prices — has lifted the domestic rig count close to 20-year highs and shifted the landscape, helped several states join Texas, Oklahoma and Louisiana in the chase for natural gas and oil production, according to Headwaters Economics.

As the summer recess approaches, Pennsylvania is flooded with proposals to tax the Marcellus Shale industry.

Due to fabrication problems on Line 1300/1301, a total outage of the San Juan Crossover has been extended through nomination cycles 1 and 2 Friday, El Paso said. Zero capacity on the crossover previously had been scheduled to end after Thursday’s gas day (see Daily GPI, May 14). “Barring any more unforeseen problems, the capacity can possibly be raised to 584 MMcf/d for [Friday’s] Cycle 3…which will include the reduction of 44 MMcf/d due to one section of Line 1301 remaining out of service,” the pipeline said. Restoration of full crossover capacity of 628 MMcf/d is set for Saturday.

Williams Field Services (WFS) told its midstream customers that they would be able to submit all nominations to the GasKit system for all cycles Wednesday, according to a posting Tuesday on the Kern River bulletin board. In announcing the restoration of GasKit service, WFS said it will no longer accept faxed nominations. Unfortunately, the company went on, the data on GasKit reports will not be accurate for the gas days of Dec. 5 through Dec. 12. “We will update this data, including shipper imbalances, as soon as possible and will post a notice communicating when the data is reliable,” it said. Presumably this announcement related to last week’s flooding at Williams headquarters in Tulsa, which knocked out the EDI (electronic data interchange) server for WFS nominations at the Opal Plant, where there has been a dearth of trading recently. However, a Williams spokesman could not be reached for confirmation.

As natural gas prices continue to stay north of $5.50, industry watchers are not sure whether the market is just reaching the peak of another cycle or whether these levels actually are sustainable over a longer term. Consultants at Arlington, VA-based Energy and Environmental Analysis, Inc. (EEA) believe there has been “fundamental shift in the gas market paradigm that is likely to be with us for the next two years or more.”