East

Texas Eastern said it had finished valve repairs on its Venice Lateral in the East Louisiana Zone (see Daily GPI, July 26) and brought the line back into service Thursday morning, allowing affected production to resume at scheduled volumes. Shipper imbalances incurred during the brief outage may be made up through the end of the month, Texas Eastern said.

Most eastern markets drifted mildly lower Monday, with most declines in single digits and only a few barely surpassing a dime. The West tended to range from flat to moderately higher in the Rockies and Southwest basins, accompanied by larger California gains. It wasn’t that the West was so strong, sources said, but rather that the region was climbing back out of the deep price holes it had dug for itself Friday.

Eastern prices ranged from flat to down as much as a quarter Monday, with most points registering declines between a nickel and about 15 cents. But western markets tended to rebound strongly as hot weather and higher power prices gave a boost to gas.

A diving screen set a softer tone for most points Monday in eastern swing markets. Anticipation of another AGA storage injection report in the vicinity of 100 Bcf contributed to bearish feelings. However, most of the eastern downturns were fairly mild at about 15 cents or less, and much of the West was climbing back up strongly from the price depths seen in Friday’s trading for the weekend.

Traders returned to a fairly quiet market Monday in which prices increased by about a dime or less at most eastern points but by considerably larger amounts in the West. California was heating up rapidly and registered triple-digit recoveries from weekend softness.

FPL Energy LLC, a subsidiary of FPL Group Inc. announced that it will construct a 517 MW gas-fired power plant in Blythe, CA. Located 200 miles east of Los Angeles, FPL said the new plant will be one of the largest independent power generation projects in the state. Electricity generated at the Blythe plant will have the capacity to power more than 500,000 homes will be sold in the state’s wholesale market. Given the plant’s proximity to Arizona and Nevada, its power could be sold into those adjacent markets as conditions warrant. Construction of the combined-cycle facility began in May and the plant is expected to begin commercial operation in early 2003. “We are pleased to do our part in helping to alleviate the power shortfall in California by providing efficient, clean energy from this new plant,” said Lew Hay, FPL Group CEO. “The Blythe plant complements quite well our existing power generation portfolio in the region.” Participating in the project will be Caithness Energy LLC, the original developer of the project.

Cabot LNG, currently the only active liquefied natural gas importer on the East Coast, has entered into a second 20-year charter agreement with Norwegian shipping giant Bergesen for a 138,000 cubic meter LNG carrier. Cabot’s first carrier agreement was completed in November 2000 and both vessels are scheduled for delivery in 2003.

Despite turning downward again Friday, the screen’s uptick of nearly 15 cents the day before had a residual supportive effect for Friday’s cash prices in eastern and Permian/Waha markets. They ranged from flat at a couple of Northeast points to 15 cents or so higher (Gulf South was a rare softer point in Louisiana), with most gains between a nickel and a dime. Most western points declined by various amounts ranging from small to huge.

The swing market continued to move higher Tuesday in the East and the Southwest basins, but at significantly reduced momentum. Most points ranged from flat to up about a nickel with only scattered points, mostly in the Northeast, realizing gains of more than a nickel.