Expected

Once again up against a regulator-imposed deadline, SouthernCalifornia Gas on Monday is expected to file its latest attempt ata final, all-parties settlement in California’s never-endingnatural gas industry restructuring, which has been dragging on formore than two years.

Feeding off Monday’s late-day advances, natural gas futurescontinued higher yesterday as traders covered short positions andnotched new longs amid a freshly bullish technical outlook. Theprompt April contract posted new life-of-contract highs for thesecond day in a row, advancing 4.9 cents to finish at $2.963.Somewhat less impressive were the out months, led by May, June,July and August, each of which gained 3.3 cents.

Those who expected the swing cash market to use Mondayafternoon’s cash run-up and continued futures strength Tuesdaymorning as a springboard were not disappointed. Late-March quoteswere moving higher by double-digit amounts at nearly every point inall market areas, although few increases exceeded 10-12 centsexcept in the Rockies and Northeast.

As traders had expected, prices used Thursday afternoon’s andFriday morning’s futures strength as a springboard to achieveincreases that were mostly between a nickel and a dime Friday.

Nearly all points continued to slide a few more cents Thursday,but afternoon rallies by three key April futures contracts (naturalgas, crude oil and heating oil) had many traders believing thatwould spark a rebound in the gas market today.

PG&E Corp.’s National Energy Group began construction on theLa Paloma Generating Plant, a 1,048 MW gas-fired, combined-cyclefacility expected to begin operating in the summer of 2001. Theplant is estimated to burn about 180,000 MMcf/d, and Kern-Mojave isthe closest pipeline source, a spokesman said.

A new Department of Energy (DOE) report is expected to show morenatural gas pipelines are needed to the Northeast. Secretary BillRichardson earlier this week pledged to seek Congressional help inthis area in order to reduce the region’s historic dependence onhigher-priced heating oil.

Unanticipated maintenance on the #3 compressor at Amber Station(Grady County, OK) is expected to limit total West of Ambercapacity to 340,000 Dth/d through Friday, Reliant said.

A winter storm sweeping through the South, along with freezingtemperatures expected to last through the weekend in much of theU.S. from the Rockies eastward, resulted in rising prices at nearlyall points Friday.