Deliveries

Even as cash prices plummeted 25 cents or more for weekenddeliveries the futures screen managed to push higher Friday astraders looked past the unseasonably warm weather outside theirwindows and focused instead on short and medium range forecasts.After a strong opening at $2.56 the December contract caught a waveof technical buying from both trade and local shorts, allowing itto peak at $2.71 before settling up 12.7 cents at $2.649.

First Energy has won a whopper $15 million power supply contractwith the U.S. General Services Administration (GSA) coveringdeliveries to 843 federal accounts in New Jersey, including theStatue of Liberty and Ellis Island, U.S. landmarks operated by theNational Park Service.

Foothills Pipeline CEO Robert L. Pierce said yesterday it won’tbe long before Alaskan natural gas is absolutely necessary to meetU.S. demand. And he remains convinced that the long-proposed AlaskaNatural Gas Transportation System (ANGTS) from Prudhoe Bay alongthe Alaska Highway and eventually to Alberta is the best way tomake it happen.

With possible national implications, California has proposed astate law that would impose “public goods” surcharges on all gassold for consumption within the state, including gas delivered byseveral proposed federally-regulated interstate pipelines that seekto bypass local distributors and directly serve large industrialcustomers. The fees would support energy efficiency,weatherization, public interest energy research and development,and low-income programs. The proposed change undergoes its firstpublic scrutiny in a legislative committee hearing in Sacramento onApril 19. If passed it is sure to splinter the gas industry betweenintra-and interstate interests.

Amid a sea of minor changes elsewhere, deliveries into theChicago and Northeast were conspicuous Wednesday with gains ofaround 15-20 cents or more. A market-area OFO issued by NGPL (seeTransportation Notes) seemed rather innocuous at first by beinglimited to 6 a.m to noon each day, but a marketer said that set offa scramble by traders to adjust their Chicago balancing situations.It also pushed up NGPL Iowa-Illinois Line quotes by more than 20cents. And quotes for Northern Natural-Ventura, where the pipelinehas had a System Overrun Limitation in effect for market zonessince before Christmas (see Daily GPI, Dec. 24), soared by asimilar amount.

Amoco Energy Co. of Trinidad and Tobago completed an 18-monthproject to increase its gas capacity by 40% to support growingdomestic industrial demand at Point Lisas and Point Fortin. Amocoincreased its ability to provide gas locally to about 700 MMcf/d,primarily due to two successful new wells at the company’s existingFlamboyant structure off the southeast coast of Trinidad.

Tennessee Gas Pipeline has signed precedent agreements for over1 Bcf/d in new deliveries through its Eastern Express Project 2000in New England and its Express 500 Project from the Gulf of Mexico,according to John Somerhalder, pipeline president.

With all regulatory approvals in place at both Federal andProvincial levels, sponsors of the Sable Island Offshore EnergyProject last week signed both their key commercial agreements andthe Facilities Alliance Agreement to engineer, construct andinstall production and gathering facilities to handle delivery of 3.5 Tcf of gas from offshore Nova Scotia. This formally commits theowners to the $2 billion first phase, which will deliver the firstgas in late 1999.