Hands

Natural gas royalties should be valued on the first sale between producers and their “owned or controlled” marketers, not on the downstream resale, if the marketers also purchase “at least some” gas from sources other than their owner-producers, a federal appeals court in Washington, DC ruled late last month. The ruling was a significant victory for gas producers.

Natural gas royalties ought to be valued on the first sale between producers and their “owned or controlled” marketers, not the downstream resale, in cases where the marketers also purchase “at least some” gas from sources other than their owner-producers, a federal appeals court in Washington, DC ruled Friday. The ruling was a significant victory for gas producers.

While natural gas futures trading decisions based on rig counts and data from the Energy Information Administration (EIA) on gas production and consumption may be easy to explain to a corporate chief risk officer, technical indicators, such as moving averages and stochastics, do a far better job of not only signaling when a price trend is about to turn, but also the size of an impending rally or retreat, said Tom Saal of Miami-based Commercial Brokerage Corp.

While natural gas futures trading decisions based on rig counts and data from the Energy Information Administration (EIA) on gas production and consumption may be easy to explain to a corporate chief risk officer, technical indicators, such as moving averages and stochastics, do a far better job of not only signaling when a price trend is about to turn, but also the size of impending rally or retreat, said Tom Saal of Miami-based Commercial Brokerage Corp.

The Process Gas Consumers (PGC), representing end users whose processes require the use of natural gas, has advised FERC Chairman Pat Wood it is “strongly” opposed to the federal government taking a hand in the price reporting process for natural gas, which is currently performed by independent publishers (such as NGI).

The New York Mercantile Exchange (Nymex) has set new annual volume records with 110 million futures and options contracts changing hands through Oct. 25, which exceeded the previous record of 109.5 million set in 1999. Natural gas futures volume set a new record at 20.73 million, which exceeded the previous record of 19.2 million set in 1999. The exchange also broke volume records for, among other things, total options (21.98 million), Nymex Division futures and options (95.78 million), Nymex futures (75.87 million), energy futures and options (95.58 million) and energy futures (75.67 million). Exchange President J. Robert Collins said the records, along with a 30% increase in overall trading volume over the same period last year and record seat values on the NYMEX Division, show the industry’s confidence in the exchange and its method of trading. “Not evident in these numbers is over-the-counter clearing activity, which, since its introduction on May 31, has seen more than $1.1 billion in trades cleared at the Exchange,” he added.

FERC was dealing out pipeline certificates like cards at a Black Jack table last Wednesday at its regular agenda meeting. Recipients included the Georgia Strait Crossing pipeline, Northwest Pipeline for a mainline expansion, Southern Natural for its South System II expansion, South Carolina Pipeline for a new line to the Elba Island LNG terminal, Millennium Pipeline (see separate story), two projects designed to serve Long Island (see separate story), and to Northern Natural Gas for compression expansion in Nebraska. Kinder Morgan Texas also won a presidential permit for a border crossing project.

FERC was dealing out pipeline certificates like cards at a Black Jack table on Wednesday at its regular agenda meeting. Recipients included the Georgia Strait Crossing pipeline, Northwest Pipeline for a mainline expansion, Southern Natural for its South System II expansion, South Carolina Pipeline for a new line to the Elba Island LNG terminal, Millennium Pipeline (see separate story) and two projects designed to serve Long Island (see separate story). Kinder Morgan Texas also won a presidential permit for a border crossing project.

While Wall Street was kicking the natural gas and electric sector in the teeth, the Federal Energy Regulatory Commission played Santa Claus last week and gave most of the regulated energy companies — with the exception of El Paso Corp. — exactly what they wanted for Christmas.