Demand

Anticipating that high system linepack will continue through theweekend due to low gas demand and limited storage injectioncapability, Tennessee Tuesday issued an OFO Action Alert to takeeffect with Thursday’s gas day. Customers under Rate Schedules SA,LMS-PA, LMS-MA and transportation contracts not covered by abalancing agreement must keep deliveries into the system less thanor equal to scheduled quantities plus 2% (or 500 dekatherms,whichever is greater); takes from the system must be more than orequal to scheduled quantities minus 2% or 500 dekatherms. Tennesseeexpects the alert to remain in effect into the start of next week.

The usual softness that accompanies a lower-demand weekendperiod arrived on schedule Friday. Price movement ranged from flatat some Rockies points to down as much as a dime in the Gulf Coast.Once more, mild weather along the East Coast caused Northeastcitygates to register the biggest declines of 15 cents or more,with Transco’s Zone 6-NYC pool again topping the list with a fallof about 30 cents. The Zone 6 slide into the mid $2.30s left ittrading little more than 20 cents above the production area’sTransco Station 65.

Saying it expects high system linepack due to reduced demand andlimited storage injection capability to continue through theweekend, Tennessee is issuing an OFO Action Alert effective withSaturday’s gas day for its entire system. Under the alert, shipperswill be penalized for daily positive imbalances that exceed a 2%tolerance range (or 500 Dth, whichever is greater) from scheduledquantities. Penalties will not apply to customers who underdeliverinto the system or overtake from it, or to customers under RateSchedule LMS-MA who have elected the Storage Swing Option or Swingon Storage. Tennessee expects the alert to remain in effect intonext week.

Citing high market-area demand, Florida Gas Transmission issuedan Overage Alert Day notice Tuesday for the segment east of Station12 (Santa Rosa County, FL). Daily negative imbalances exceeding atolerance of 5% are subject to penalty. The pipeline will evaluatesystem conditions again this morning before deciding whether toextend the OFO.

Due to rising market-area demand following the weekend, Florida GasTransmission found it necessary to reinstate Monday an Overage AlertDay notice that it had lifted Friday after a three-day run (see DailyGPI, Oct. 4). The low-linepack OFOcarries 8% tolerance for negative daily imbalances and applies to thesystem east of Station 12 (Santa Rosa County, FL). FGT also continuedto extend maintenance at Sabine Pass Plant/Johnson’s Bayou insouthwestern Louisiana, which was originally scheduled to end May 17,1999, but said late last week it was increasing allowable volumesthrough the facility by another 10 MMcf/d, raising its total capacityto 110 MMcf/d.

For the second Friday in a row, most points avoided the pricejinx associated with lower weekend demand. Flat to slightly higherwas the general rule, although a few points rose by as much as 8cents. Most of the weaker spots were concentrated in Northeastcitygates and the Rockies, with Iroquois Zone 2 deliveries fallingby almost 15 cents. Prices were down overall, but experiencing alate bounce due to screen strength, a Northeast trader said.

Buoyed by strong demand for physical supplies and aggressivebuying under last week’s price chart gap, the natural gas futuresmarket continued to whittle away at last week’s collapse. Theremaining three months of the millennium received almost equalbuying interest Tuesday, with October, November and Decemberadvancing 11.6, 11.9, and 11.6 cents respectively. Estimated volumewas hefty, with 81,210 contracts changing hands.

Citing significant market-area demand, Florida Gas Transmissionissued an Overage Alert Day notice Friday for the system east ofStation 12 (Santa Rosa County in the Florida Panhandle). A decisionon whether to extend the OFO was not due until Saturday morning.

Florida Gas Transmission, citing significant market-area demand,issued an Overage Alert Day notice Tuesday for the system east ofStation 12 (Santa Rosa County in the Florida Panhandle). The noticehas a 6% tolerance for daily negative imbalances. FGT willre-evaluate conditions this morning before deciding whether toextend the OFO through today’s gas day.