Facilities

The Port of Houston Authority commissioners, who manage the public facilities along the Houston Ship Channel, have voted to appeal a January ruling by U.S. District Judge Lynn Hughes who ruled that the Port, and not companies, should pay the cost of lowering pipelines to accommodate the deepening of the channel. At least 87 pipelines, containing chemicals, petroleum products and natural gas, may be involved at a cost of $1 million each.

A unit of Williams announced that it has completed facilities necessary to transport natural gas to the Bluegrass Generation Facility being built by Dynegy Inc. about 20 miles northeast of Louisville, KY. Williams said the 500 MW power plant, which is scheduled to begin commercial operation during the second quarter of 2002, will be able to receive up to 165,000 Dth/d of natural gas through a meter station recently completed on Williams’ Texas Gas pipeline system. “We look forward to providing reliable, cost-effective natural gas service to Dynegy’s Bluegrass Generation Facility,” said Dean Jones, vice president of customer services and rates for Williams’ Central and Texas Gas pipeline systems. “Service to this plant is part of Williams’ growing nationwide commitment to the fast-emerging power generation market.”

Natural gas storage facilities are busting at the seams right now after the American Gas Association (AGA) reported the industry was still putting in more inventories during the third full week of November in reaction to mild weather, low prices and lack of demand. With the 12 Bcf injection AGA reported, storage is at a new record high of 3,144 Bcf and the year-on-year storage deficit is at a crushing 642 Bcf, leaving a glut of gas supply on the market that will put severe downward pressure on spot prices for months to come, according to analysts.

Natural gas storage facilities are busting at the seams right now, causing analysts to be increasingly bearish about December prices. The American Gas Association (AGA) reported last Wednesday the industry was still putting in more inventories during the third full week of November in reaction to mild weather, low prices and lack of demand. With the 12 Bcf injection AGA reported last Wednesday, storage is at a new record high of 3,144 Bcf and the year-on-year storage deficit is at a crushing 642 Bcf, leaving a glut of gas supply on the market that will put severe downward pressure on spot prices for months to come, according to analysts.

Over two-and-a-half years after the project was announced, Gulfstream Natural Gas System LLC reported that it has received FERC approval to commence mainline pipeline construction in Florida. With this approval, Gulfstream said it now has all major segments of its 753-mile pipeline project under construction and on schedule to deliver natural gas in June 2002.

The American Gas Association reported a 95 Bcf injection into the nation’s natural gas storage facilities last week, which compares to a 72 Bcf injection during the same week a year ago. The injection came in slightly above consensus estimates around 85 Bcf and should be a bit of a reality check for traders caught up in the hype surrounding the impact the terrorist attacks might have on international crude supplies. However, the New York Mercantile Exchange remains closed and there was still no word yesterday evening on whether the exchange would attempt to open its doors on Thursday (see related story).

The Massachusetts Health and Educational Facilities Authority (HEFA) PowerOptions energy program reported on Wednesday that it has entered into a second major energy contract with Select Energy Inc. of Berlin, CT. The two-year agreement to supply natural gas to HEFA members extends through Oct. 1, 2003 and is expected to provide Select Energy, the retail energy marketing and services subsidiary of Northeast Utilities, with revenues of $25 million over the length of the contract.

Pacific Gas & Electric Co. signed five-year agreements with 131 of its qualifying facilities (QFs) last week, ensuring the utility and its customers will receive a reliable supply of electricity at an average energy price of 5.37 cents/kWh. The contracts represent nameplate capacity of 2,950 MW compared to PG&E’s total QF contract nameplate capacity of 4,400 MW. On an average annual basis, the company receives 2,400 MW from all of its QFs, and the 131 QFs represent 1,600 MW of the total amount.

The Ohio Power Siting Board (OPSB) recently approved construction of two new gas-fired electric generation facilities within the state in an effort to keep ahead of the region’s growing demand. The projects include an enormous 2,700 MW plant in Summit County and a 704 MW facility in Sandusky County.