Generally

Prices continued to fall at nearly all points Friday due to generally mild weather forecasts and the previous day’s 9.4-cent decline by May futures. The typical weekend decline of industrial load was an additional bearish factor.

California’s natural gas producers stepped up drilling in recent years in response to high commodity prices; however, output has generally remained flat. And holding production at even flat levels will be a challenge, according to a California Energy Commission (CEC) natural gas analyst, given today’s lower commodity prices.

Constricted and expensive capital markets have not stifled natural gas pipeline development, and analysts predict projects generally will move forward, driven by producers’ need to get gas to market and supported by investors’ appetite for “more reasonable returns and greater certainty.”

Constricted and expensive capital markets have not stifled natural gas pipeline development, and analysts predict projects generally will move forward, driven by producers’ need to get gas to market and supported by investors’ appetite for “more reasonable returns and greater certainty.”

Supermajor and large independent producers generally enjoy strong liquidity positions, but tighter capital markets will crimp the purchasing power of smaller players at a time when some properties would likely become available at “distressed prices,” Standard & Poor’s Ratings Services (S&P) analyst Thomas Watters wrote in a recent note.

Supermajor and large independent producers generally enjoy strong liquidity positions, but tighter capital markets will crimp the purchasing power of smaller players at a time when some properties would likely become available at “distressed prices,” Standard & Poor’s Ratings Services (S&P) analyst Thomas Watters wrote in a recent note.

Amid generally upbeat financial results reported for the third quarter San Diego-based Sempra Energy divulged that its Liberty Gas Storage Project in Louisiana may have to be shelved if it can’t find an engineering solution to cavern development problems. Separately, cost increases and delays are plaguing two other major gas and power projects.

Amid generally upbeat financial results reported for the third quarter Monday (see related story), Sempra Energy divulged that its Liberty Gas Storage Project in Louisiana may have to be shelved if it can’t find an engineering solution to cavern development problems. Separately, cost increases and delays are plaguing two other major gas and power projects. CEO Don Felsinger said Liberty in a worst case scenario might have to be written off at about $65 million to cover Sempra’s share of the salt dome storage project.

The market had been able to rise in most cases Thursday despite declining cooling load, but it had to face up to the reality of generally weak weather fundamentals Friday. Prices fell by double-digit amounts across the board, and by half a dollar or more at a majority of points. The previous day’s 20.2-cent drop by September futures and the weekend loss of industrial load were additional factors contributing to the cash softness.