Facilities

The rapid pace of gas injections into the nation’s storagefacilities this spring (9.4 Bcf/d, or 5.4 Bcf/d greater than overthe same period last year) and the current massive surplus ofstored gas (331 Bcf) compared to levels at the same time over thepast four years prompted Wefa Inc. to turn extremely bearish onspot prices. The additional storage this year is equal to 5% ofdemand for the remainder of the non-heating season, Wefa said inthe May edition of its Natural Gas Monthly.

New Energy Ventures won a huge four-year power supply contractwith the Department of Defense that covers 1,200,000 MWh ofelectricity annually is worth $300 million. Among the servicesincluded in the contract are energy procurement and access to dailyincremental electric usage and demand data for each site via NewEnergy Ventures’ customer service Web site,http://www.nevservice.com.

There will be no shortage of natural gas to fill the new wave ofCanadian export pipeline projects or a future generation offacilities yet to be born, according to veterans of the supplysector north of the international border.

It has been argued the emergence of storage facilities in thenatural gas industry has robbed cash prices of some of theirvolatility during summers and winters and replaced it duringshoulder months. Perhaps a similar affect has happened this pastyear because of mother nature. The El Ni¤o winter, which helpedkeep volatility in check this weekend, may very well be behind theextremely high volatility seen at the New York Mercantile Exchangethis past week.

Electricity buyers with multiple facilities are eager toconsolidate power buying activities from myriad suppliers to just ahandful when competition comes, according to a recent survey.