Expiring

Kern River Gas Transmission plans to carry out another expansion of its system to California, providing an outlet for more Rocky Mountain natural gas, if California regulators next month order state utilities to turn back capacity on the El Paso Natural Gas and Transwestern pipeline systems in order to provide supply diversity for California consumers, said an official for the pipeline Wednesday.

At the outset, the only clear understanding of California’s prospective two-phase 2004 restructuring of its natural gas market is that nothing is clear.

The market apparently got most of the expiring September futures-related bearishness out of its system Tuesday, because Wednesday’s numbers were close to flat in a majority of cases and weighted slightly toward the higher side, especially in gains of up to 8 cents in the Rockies and San Juan Basin.

Expected to replace the current program expiring at the end of June, Secretary of the Interior Gale Norton said last week that the U.S. Department of the Interior’s Minerals Management Service (MMS) is proposing to schedule 20 lease sales in eight outer continental shelf (OCS) planning areas in the Gulf of Mexico and offshore Alaska as part of a new five-year leasing program. The proposed sale areas are in the Gulf of Mexico’s western, central and parts of the eastern planning areas, as well as Alaska’s Beaufort Sea, Norton Basin, Cook Inlet/Shelikof Strait and the Chukchi Sea/Hope Basin.

Expected to replace the current program expiring at the end of June, Secretary of the Interior Gale Norton said Monday that the U.S. Department of the Interior’s Minerals Management Service (MMS) is proposing to schedule 20 lease sales in eight outer continental shelf (OCS) planning areas in the Gulf of Mexico and offshore Alaska as part of a new five-year leasing program. The proposed sale areas are in the Gulf of Mexico’s western, central and parts of the eastern planning areas, as well as Alaska’s Beaufort Sea, Norton Basin, Cook Inlet/Shelikof Strait and the Chukchi Sea/Hope Basin.

Buoyed by the screen’s late-Wednesday run-up and continuedfirmness in the expiring August futures contract Thursday, cashnumbers made strong gains yesterday that generally ranged betweenabout 15 cents and a little more than 20 cents. The advances tendedto be smaller in western markets, however.

Feeding off late gains notched by the expiring April contractMonday, May kicked off its campaign as the spot month at Nymexyesterday by continuing higher in active trading. And whereas Aprilcontract made its mark in a late short squeeze, May was promptedhigher throughout the day by a steady stream of commercial andspeculative buying. Several sources also pointed to buy-stoporders, which were triggered as the market moved through the$1.93-95 range as a reason for the strength. May finished up 9.5cents at $1.978.