Favorable

Noting the mild temperatures across the country, favorable arbitrage spreads and “ambitious distributor refills,” the industry continues to “inject a significant amount of natural gas into storage,” said UBS Warburg analyst Ronald Barone last week in his weekly research note. Even though national supplies now stand at 958 Bcf versus 1,117 Bcf a year ago, Barone said he expects to see the storage deficit drop and perhaps post a surplus by this summer.

FERC issued a favorable environmental assessment on Central NewYork Oil & Gas Co.’s (CNYOG) Stagecoach Natural Gas StorageFacility, which is to be located near Binghamton, NY.

Williams announced that the Internal Revenue Service has issueda favorable ruling on the company’s proposed tax free spin-off ofits communications business to Williams’ shareholders. The rulingwould permit a tax-free distribution of Williams Communications’stock to shareholders in what is commonly known as a spin-offtransaction. Under this form of transaction, each Williamsshareholder would get a proportionate number of WCG shares.Williams currently owns 85% of Williams Communications. It soldabout 15% of Williams Communications last October in public andprivate equity offerings. Last month the company’s board voted tobegin the separation process, which is expected to take about 18months. In a statement, CEO Keith Bailey said the company thoughtthe steps were “the best way to ensure that both our energy andcommunications businesses have the efficient and effective accessto the capital necessary to pursue the substantial growthopportunities that each enjoys.”

FERC staff issued favorable environmental impact statements onproposed pipeline expansions by Trans Union Interstate and WilliamsGas Pipeline Central. Both projects primarily will serve new powergeneration in the Midcontinent and Gulf Coast regions. In itsEnvironmental Assessments, Staff said the projects would have noadverse environmental impact if certain mitigating measures wereundertaken. Trans Union Interstate is proposing a 430,000 MMBtu/dpipeline extension to a 2,700 MW combined-cycle, gas-fired powerplant proposed by Union Power Partners near El Dorado, AR. Thepower plant is expected to be operation in spring of 2002. Anapplication for the 42-mile 30-inch diameter pipeline was filedlast December. The Williams project, called the Pleasant HillPipeline, would involve construction of two miles of 24-inchdiameter pipe and 2,890 hp of compression in Franklin County, KS,and Cass and Johnson County, MI. The project would provide 44,200Dth/d of gas in the winter and 88,200 Dth/d of gas in the summer toUtiliCorp United’s proposed Pleasant Hill Power plant in CassCounty, MI, to UtiliCorp’s distribution system in Missouri and toU.S. Energy Services in Pettis County, MI. UtiliCorp also willconstruct its own eight mile pipeline to the Williams facilities.

BP Amoco released what it called strong fourth quarter 1999results, and CEO John Browne had favorable remarks regarding futurenatural gas prices.

BP Amoco released what it called strong fourth quarter 1999results, and CEO John Browne had favorable remarks regarding futurenatural gas prices.

More favorable operating conditions allowed Texas Eastern to cancelMonday the OFO for its M-3 market zone that began a week earlier (seeDaily GPI, Jan. 19). All M-3 OperationalBalancing Agreements that were suspended are back in effect, Tetcosaid, and storage nominations may be restored to pre-OFOlevels. However, a restriction on IT gas sourced upstream of M-3 anddelivered there is still in effect. Due-shipper imbalance gas may betaken in all zones again, Tetco said, as long as it is scheduledproperly and taken evenly through the rest of January. Downstreamaffiliate Algonquin similarly canceled Monday the Critical SystemWarning it had posted Jan. 17 (see Daily GPI, Jan. 19), but left in place restrictions onmainline forward hauls for Authorized Overrun gas, interruptibleservices and due-shipper makeup gas.

Even with favorable momentum at FERC Questar’s Southern TrailsPipeline won’t get very far without California regulatory help inremoving what it views as the main impediment to its locking upmulti-year deals with at least three large end-users who currentlyship gas on SoCalGas.

Even with favorable momentum at FERC (see NGI, Oct. 11), Questar’s Southern Trails Pipeline won’t get very far without California regulatory help in removing what it views as the main impediment to its locking up multi-year deals with at least three large end-users who currently ship gas on SoCalGas.