Driven

Secretary of Energy Samuel Bodman last Tuesday said he expects to see “more mergers and partnerships among power providers that are driven by strong business rationales and that do not depend necessarily on geographic proximity.”

The global liquefied natural gas (LNG) business is continuing to grow and is on the cusp of significant changes. Driven by North American demand, the Atlantic basin is poised to balloon to equal the Pacific in volumes traded. While there seems to be no shortage of regasification capacity, at least in North America, liquefaction capacity runs much tighter, and regas project backers that don’t have supply lined up are being forced to wait. It’s a seller’s market. Contracting terms are becoming more flexible, often including provisions for cargo diversion, and the spot market is growing but is not expected to ever rival the amount of LNG that moves under firm contract.

In spite of bearish EIA storage figures, natural gas futures turned tail and headed higher in active inventory report-driven trading Thursday on the New York Mercantile Exchange. The EIA reported withdrawals from working gas inventory tallied a miserly 23 Bcf, below the ICAP options auction consensus of 25.5 Bcf, and short of a Reuter’s survey of 22 analysts and traders that predicted a fall of 31 Bcf. Bentek Energy of Colorado calculated a withdrawal of 40.9 Bcf in its Wednesday Daily Market Summary.

The recent storage- and weather-driven downturn in natural gas prices has given investors pause, but producers remain undaunted, according to Raymond James & Associates Inc.

The recent storage- and weather-driven downturn in natural gas prices has given investors pause, but producers remain undaunted, according to Raymond James & Associates Inc.

After a lull following the post-Enron credit crisis, corporate merger and acquisition (M&A) activity once again is on the rise, driven by interest in regional market scale and rising cost pressures among several other factors, according to a new report by Merrill Lynch analysts Steve Fleishman, Jonathan Arnold and Elizabeth Parrella.

Driven by continuing high wholesale natural gas costs and demand for infrastructure upgrades for both gas and electric utility distribution systems, Bellevue, WA-based Puget Sound Energy (PSE) late Wednesday filed with state of Washington regulators for a combined gas and electric rate increase collectively totaling $200 million in added revenues. This is PSE’s second general rate case filing in less than two years, and the regulatory review process may take up to 11 months.

It remains to be seen whether the effort of California state regulators and the incentives in the new energy law will be sufficient to curb the appeal of California’s consumer group-driven energy reregulation ballot measure in November. Unlike much of the rest of the nation, which will begin seeing cooler temperatures in another three weeks, the Southwest, including California, probably will be broiling and that won’t be good for an already stressed power grid, according to Stephen Conant, senior market analyst at Massachusetts-based Energy Security Analysis, Inc. (ESAI).

With hot weather-driven power generation load remaining high and news surfacing of a low-pressure area in the northwestern Caribbean Sea that could develop into a storm threatening Gulf of Mexico production, prices ranged from flat to about 15 cents higher at nearly all points Wednesday.