Headed

The United States is headed for a natural gas shortage that could last for the next five to seven years and substantially change the face of the energy industry, according to a new study by Andrew D. Weissman, publisher of Washington DC-based EnergyBusinessWatch (EBW).

El Paso Corp. will be headed to FERC next month with an application for the first U.S. LNG “land bridge” regasification facility located offshore Louisiana. The company, which believes there are limited sites for land-based liquefied natural gas (LNG) import terminals in North America, also hopes to be filing applications for similar facilities located offshore New York City, New England, the Mid Atlantic region and Atlantic Canada.

Adding to the recent flurry of natural gas storage projects headed for Mississippi to serve the Southeast, Petal Gas Storage LLC, a subsidiary of El Paso Energy Partners LP, said Thursday that it is holding a non-binding open season for up to 5 Bcf of firm natural gas storage capacity in order to evaluate market interest in proposed plans to expand its facility in Petal, MS. The capacity is anticipated to be available for use by Jan. 1, 2004.

Natural gas storage a-plenty appears to be headed toward Mississippi in the form of two salt dome cavern projects, both of which are scheduled to come on-line in late 2003. The separate projects sponsored by Bedminster, NJ-based NUI Corp. and Houston-based SGR Holdings LLC, expect to bring a combined 26 Bcf of gas storage to the region.

Natural gas rates in the Carolinas are headed down again, according to Piedmont Natural Gas Co.. As a result, Piedmont said it has filed for a gas service rate decrease that should make its customers in the Carolinas see their gas bills decline by 15-20% this winter compared to last winter, assuming normal weather.

Amid deepening fears that the U.S. economy is headed for a recession, and exacerbated by light trading volume following a bomb threat at Nymex, natural gas futures tumbled to new 19-month lows Tuesday, as institutional traders increased their short exposure. Almost uniform selling was seen across the entire strip of contracts, pressuring the winter strip down 15 cents to $2.99 and the 12-month strip down 13 cents to $2.97. The October contract closed at $2.225, down 14.4 cents for the session.

Despite the desperate need for natural gas currently, long-haulpipeline construction is headed for a temporary lull over the nextfive years, according to Thomas Howard, director of strategicproducts at PIRA Energy Group, a New York City-based energyconsulting firm.

Despite the desperate need for natural gas currently, long-haulpipeline construction is headed for a temporary lull over the nextfive years, according to Thomas Howard, director of strategicproducts at PIRA Energy Group, a New York City-based energyconsulting firm.

In an indication that Mexico may be headed toward privatizing its monopoly-run energy industry, Mexican President-elect Vicente Fox, who takes office Dec. 1 under a vow to make the government more professional and less political, is hearing calls from friends and foes alike to restructure the energy industry and allow more private investment.