Facilities

East Tennessee Natural Gas expected to complete final steps towards placement of the Patriot Extension facilities into service Thursday afternoon and thus was accepting nominations for Friday gas flow on Patriot. The project’s service start-up was delayed from last week’s projection of this past Tuesday (see Daily GPI, Nov. 14).

The high average price paid for the gas that now sits in storage facilities across the country will put storage capacity holders in a real tight spot this winter if prices average less than $4.65 at the Henry Hub, according to Scott DePasquale, natural gas analyst at Energy Security Analysis Inc. (ESAI). DePasquale expects storage operators would suffer significant losses at such lower than expected price levels.

The high average price paid for the gas that now sits in storage facilities across the country will put storage capacity holders in a real tight spot this winter if prices average less than $4.65 at the Henry Hub, according to Scott DePasquale, natural gas analyst at Energy Security Analysis Inc. (ESAI). DePasquale expects storage operators would suffer significant losses at such lower than expected price levels.

Pioneer Natural Resources Co. has set a new record for quarterly gas production in North America, announcing ahead of its earnings report that it produced 48 Bcf of gas in the second quarter, a 39% sequential increase. Deepwater Gulf of Mexico (GOM) production from its Canyon Express and Falcon gas projects matched the Dallas-based producer’s expectations, and will put its quarterly worldwide oil and gas production at 14.5 MMboe.

Tennessee delayed a project to abandon certain facilities associated with Line 527A-300 offshore Louisiana until April 28-May 13. The work previously had been scheduled for April 23-May 8 (see Daily GPI, April 10).

Natural gas futures vaulted to new 21-month highs Thursday morning on the news that 136 Bcf was pulled from storage facilities during the week ending Jan. 10. Buying was seen from all market segments and was intensified by the existence of buy-stops that were triggered on the way up. The February contract finished at $5.645, up 21.5 cents for the session and nearly 60 cents above its $5.06 low notched Tuesday. Volume in the gas pit was heavy as an estimated 124,108 contracts changed hands.

El Paso said it was completing installation of pigging facilities on Line 1200 between Gallup Station and Valve City Wednesday. Work on the segment between Valve City and Window Rock Station is still in progress, but should be completed Saturday as originally scheduled. As a result San Juan Basin capacity was increased by 100 MMcf/d effective with Thursday’s Cycle 1 nominations. A capacity reduction of 135 MMcf/d on the North Mainline was to continue as scheduled through Friday. The pipeline also said Bowie Station turbine repairs have been more extensive than anticipated, a 50 MMcf/d capacity cut on the South Mainline at Waha will be extended through Aug. 31.

El Paso’s San Juan Basin capacity is reduced by 100 MMcf/d through Friday due to the installation of pigging facilities on Line 1200 between Gallup and Window Rock Stations. The work also cuts North Mainline capacity by 135 MMcf/d.

After much ballyhoo last year by El Paso Corp. about building six new liquefied natural gas (LNG) receiving terminals in North America, the company has decided that U.S. public sentiment would be too difficult to sway, and has dropped plans for its three proposed U.S. onshore sites. However, in its new-and-improved plan, El Paso is modifying three new LNG tankers that would convert the cargo offshore and deliver it through a subsea pipeline to U.S. markets along the Gulf, East and West Coasts.