Driven

Driven in recent years by a surge of electric power plant construction that is only now subsiding, the accompanying boom in new natural gas pipeline projects and expansions is showing signs of exhaustion, according to a new report from Standard & Poor’s Ratings Services (S&P).

Cash prices zoomed higher by a quarter or more at many eastern points Monday in what one source called a purely screen-led burst of bullishness. Western markets also rose, but by varying amounts; Rockies quotes saw gains on either side of a dime, while San Juan-Blanco joined a couple of Northeast citygates in recording the day’s biggest increases of nearly 40 cents. California, Permian/Waha and Pacific Northwest points tended to match the overall market by rising 20-30 cents.

In a compelling show of proof that it is truly a weather-driven market in winter, natural gas futures gapped higher and shot to new two-week highs Monday as traders returned from the weekend to learn that the rest of November would feature below-normal temperatures for the eastern half of the nation. The December contract finished at $4.263, up 28.2 cents for the session and just off its $4.28 high.

Strong natural gas drilling, driven by healthy oil and gas prices and rising cash flow in the first nine months of 2001, pushed up Canada’s industry average for finding and development (F&D) costs in the Western Canadian Sedimentary Basin by 46% last year, according to a new Ziff Energy Group study. However, through the first eight months of 2002, gas well completions are off 20% from a year ago.

Strong natural gas drilling, driven by healthy oil and gas prices and rising cash flow in the first nine months of 2001, pushed up Canada’s industry average for finding and development (F&D) costs in the Western Canadian Sedimentary Basin by 46% last year, according to a new Ziff Energy Group study. However, through the first eight months of 2002, gas well completions are off 20% from a year ago.

Quotes for Transco Zone 6-New York City deliveries soared as high as $7.50 Monday as Northeast electric utilities struggled to cope with high temperatures that generated heat advisories throughout much of the area. The heat sparked the PJM Interconnection grid operator to issue a plea for emergency supplies and sparked a run-up in Nepool (New England) and PJM-West power prices for Tuesday to averages of about $116/MWh in each pool, according to the IntercontinentalExchange trading platform. New York and PJM websites showed hourly prices spiking occasionally up to the $1,000/MWh price cap.

Buoyed by stronger cash market prices driven by a storm bisecting the country Thursday, natural gas prices floated higher throughout the session as traders cautiously covered short positions initiated in the month-long decline. The March contract finished at $2.138 and by virtue of its 5.8-cent advance secured its third straight up-day. There was less interest in the back months, which limited the 12-month strip to a 1.2-cent gain and $2.518 close. Volume was weak, with 75,990 contracts changing hands.

Westcoast Energy announced an open season for about 175 MMcf/d of additional firm transportation service on its Fort Nelson mainline facilities in northern British Columbia. It is accepting requests from the following receipt points: Fort Nelson Plant, Buckinghorse Plant, Caribou Plant, Jedney #1 Plant , Jedney #2 Plant, Sikanni Plant and Cypress Plant to Compressor Station No. 2 (“Zone 3”). The additional capacity would be made available through an expansion of the line, consisting largely of pipeline looping. The in-service date of the proposed expansion is expected to be April 2002.

Westcoast Energy announced an open season for about 175 MMcf/d of additional firm transportation service on its Fort Nelson mainline facilities in northern British Columbia. It is excepting requests from the following receipt points: Fort Nelson Plant, Buckinghorse Plant, Caribou Plant, Jedney #1 Plant , Jedney #2 Plant, Sikanni Plant and Cypress Plant to Compressor Station No. 2 (“Zone 3”). The additional capacity would be made available through an expansion of the line, consisting largely of pipeline looping. The in-service date of the proposed expansion is expected to be April 2002.