Found

FERC said last week it has found Chicken Littles in the Y2Kplanning departments of several gas pipeline companies. TheCommission berated pipeline Y2K planners for crying “the sky isfalling” without any solid evidence that it is. To those pipelinesseeking a complete shut-down of multiple nomination periods justprior to and after Jan. 1, FERC explained that so far they have notprovided convincing arguments why such drastic methods would berequired.

FERC said yesterday it has found Chicken Littles in the Y2Kplanning departments of several gas pipeline companies. TheCommission berated pipeline Y2K planners for crying “the sky isfalling” without any real good evidence that it is. To thosepipelines seeking a complete shut-down of multiple nominationperiods just prior to and after Jan. 1, FERC explained that so farthey have not provided convincing arguments why such drasticmethods would be required.

Natural Gas Pipeline Co. of America (NGPL) contends a FERCdecision that found a recent auction to be “unreasonable and undulypreferential” would “nullify” its negotiated-rate authority and”aggravate” its decontracting problems.

Due to rising market-area demand following the weekend, Florida GasTransmission found it necessary to reinstate Monday an Overage AlertDay notice that it had lifted Friday after a three-day run (see DailyGPI, Oct. 4). The low-linepack OFOcarries 8% tolerance for negative daily imbalances and applies to thesystem east of Station 12 (Santa Rosa County, FL). FGT also continuedto extend maintenance at Sabine Pass Plant/Johnson’s Bayou insouthwestern Louisiana, which was originally scheduled to end May 17,1999, but said late last week it was increasing allowable volumesthrough the facility by another 10 MMcf/d, raising its total capacityto 110 MMcf/d.

After a choppy week of range-bound trading, bulls foundthemselves in the driver’s seat Friday at the New York MercantileExchange when weather forecasts and technical factors came intoagreement. Given the opportunity it didn’t take long forspeculators, comprised mostly of local traders, to become buyers inan attempt to push the August contract through resistance tobuy-stop orders that they knew were waiting in the $2.21-22 area.However, what they failed to realize was that there wasconsiderable commercial selling waiting there as well, it proved tobe more than enough to satiate the buying demand. The Augustcontract notched a $2.225 high shortly after 1 p.m. (EST) only tocome crashing back to settle at $2.187, an 0.8-cent advance for thesession.

El Paso found unexpected damage in its inspection of the WhiteRock No. 2 turbine. The unit remained down through Friday, cuttingSan Juan Basin capacity by 200 MMcf/d. The pipeline expected tocomplete repairs by late Friday afternoon, but said because itcould not raise San Juan capacity until the unit could be tested,the constraint would remain in effect for Cycles 1 and 2 ofSaturday’s gas day.

A 270 MMcf/d reduction in San Juan Basin supply persisted intothe weekend-and possibly beyond-as El Paso reported it had founddamage to internal rotating components in its Blanco Plant’s “D”turbine that would require removal and inspection. The plant hadbeen scheduled to resume full operation Thursday. If the parts canbe repaired and reused, the turbine should return to service May31, El Paso said. But if the parts must be replaced, the projectedreturn date is June 5.

After posting 7.3 cent rally to kick off the week Monday, thefutures market found itself in a spirited see-saw battle pittingprice-optimistic bulls versus price skeptical bears Tuesday. In theend however, the market sided with the trend as the bulls came awaywith their fifth gain in as many days by nudging the May contract3.2 cents higher to $2.331. The May contract expires today at 3:10EST.

It should come as no surprise to anyone following the gasindustry that a recent survey of companies found the gas world tobe of “two minds” when it comes to supply-demand issues.