Fields

Natural gas production began moving through the landmark Independence Hub in the Gulf of Mexico Thursday from the first of 15 subsea wells in 10 anchor fields. Producers said they expect to bring production up to the hub’s 1 Bcf/d capacity by late 2007.

While it is no secret that North American natural gas production is on the decline due to declining reserves, newer production fields in Canada and the United States continue to stem the tide. Last week, Halifax, NS-based Corridor Resources reported that its McCully Gas Field in New Brunswick has begun pumping 35 MMcf/d of natural gas into the Maritimes & Northeast Pipeline (M&NP) for delivery in Canada and the northeastern United States. The action marks the first export of gas from an onshore site in Atlantic Canada to New England.

While it is no secret that North American natural gas production is on the decline due to declining reserves, newer production fields in Canada and the United States continue to stem the tide. On Wednesday, Halifax, NS-based Corridor Resources reported that its McCully Gas Field in New Brunswick has begun pumping 35 MMcf/d of natural gas into the Maritimes & Northeast Pipeline (M&NP) for delivery in Canada and the northeastern United States. The action marks the first export of gas from an onshore site in Atlantic Canada to New England.

Southern California Gas said Monday that due to high inventories in its storage fields, it had reduced injection capacity by 60 MMcf/d. Then in a Tuesday update it said another 17 MMcf/d of injection was lost because of electrical repairs to the No. 8 main unit at its Playa Del Rey field.

El Paso Corp. said it placed its West Cameron 75 and 62 new-field discoveries online, adding 52 MMcfe/d (20 MMcfe/d net to El Paso’s interest) to the market. The fields are located about 12 miles offshore of Cameron, LA, in 32 feet of water.

Spot prices at the Henry Hub could drop below $4/MMBtu near the end of the injection season as many gas storage fields could reach their maximum capacity, Energy and Environmental Analysis Inc. (EEA) said Tuesday, echoing the predictions of some analysts and regulators but contrasting with recent comments from analysts at Raymond James & Associates (see Daily GPI, June 20). However, EEA also said gas prices are likely to “rebound significantly as soon as winter heating load develops.”

Southern Union Co. on Tuesday announced an expansion project in Texas on the Trunkline Gas Co. pipeline system to increase access to Texas’ natural gas storage fields, pipelines and liquefied natural gas (LNG) import terminals. The Field Zone Expansion project will be anchored by Energy Transfer Partners LP.

The Energy Information Administration (EIA) reported Thursday morning that a smaller than expected 10 Bcf was withdrawn from underground storage fields for the week ended March 31, the traditional end of the heating season. As a result, the currently range-bound May natural gas futures contract dropped lower to settle at $6.972, down 9.7 cents from Wednesday.

With a 102 Bcf withdrawal from the nation’s gas storage fields last week, according to the latest report from the Energy Information Administration (EIA), working gas inventories hit the highest point for this time of year in the last 12 years, and FERC’s Office of Market Oversight and Investigations (OMOI) said Thursday that even record high withdrawals through the rest of the winter could still result in record high inventories on April 1.