Generation

An estimated 600 Bcf decline in industrial gas demand (not related to power generation) in the first six months of this year, coupled with soaring gas storage levels and rising production has led to a dramatic turnaround in the gas market and should keep average wellhead gas prices “well below” $3 through 2002, the Energy Information Administration said in its Short Term Energy Outlook.

A 600 Bcf decline in industrial gas demand (not related to power generation) in the first six months of this year, coupled with soaring gas storage levels and rising production has led to a dramatic turnaround in the gas market, the Energy Information Administration noted in its Short Term Energy Outlook. EIA expects average wellhead prices to remain “well below $3 in 2002” as a result of the current market fundamentals.

With PanCanadian’s Deep Panuke prospect lined up on the supply end and new gas fired generation piling up in New England on the demand side, Maritimes & Northeast Pipeline said last week it is ready to move forward with its plans for a major expansion. The company expects to increase the capacity of its system to 1 Bcf/d and is holding an open season for its Phase IV expansion through Sept. 21.

The Northeast moved a step closer to getting a major new power transmission line, linking surplus generation in Maine and Atlantic Canada with rapidly growing demand in Boston, New York and the Mid Atlantic region. FERC last Wednesday conditionally approved the transmission project filed by Neptune Regional Transmission System LLC consisting of several thousand miles of undersea high-voltage direct transmission. Among other things, the Commission said that its approval was contingent upon Neptune joining the Northeastern regional transmission organization (RTO).

Continuing his nonstop photo opportunities to flip the switches on new electric generation sources, Gov. Gray Davis Monday opened the 90 MW Larkspur Energy Project, built by InterGen and billed as the largest natural gas-fired power plant to come on-line in San Diego in more than 40 years. InterGen also signed an 11-year contract with the state for the plant’s output.

A FERC administrative law judge has issued an initial opinion, dividing the allocation of generation capacity costs to interruptible load on the Entergy Corp. system into pre-1995 and post-1995 time periods to reflect Entergy’s change in its system planning in the latter period to exclude interruptible load.

With plenty of new gas-fired generation firing up this summer, Houston-based Purvin & Gertz, an international energy consulting firm, is expecting prices to firm up, particularly in the U.S. Gulf Coast region with the average bidweek delivered-to-pipeline prices predicted to average $4.80/MMBtu in August, dropping in September and then peaking at $6/MMBtu in December.

Natural gas demand will rise with growth in electric generation, but gas supply appears to be growing at an even faster pace, according to Energy Security Analysis Inc.(ESAI). The firm said it now expects “continued downward pressure” on gas prices through 2002. It estimates that domestic production, Canadian imports and liquefied natural gas (LNG) will equal an increase in supply of 3.6% in 2001 and 4% in 2002.

Natural gas demand will rise with growth in electric generation, but gas supply appears to be growing at an even faster pace, according to Energy Security Analysis Inc.(ESAI). The firm said this week it now expects “continued downward pressure” on gas prices through 2002. It estimates that the expansion of supplies from domestic production, Canadian imports and liquefied natural gas (LNG) will equal to an increase of 3.6% in 2001 and 4% in 2002.