Inch

Western Gas Resources and an affiliate of Colorado InterstateGas announced plans to build a 90-mile 20-inch diameter gatheringsystem and a treating facility to serve the Powder River Basin ofWyoming. The line will be designed to reach the heart of thecoalbed methane development in Campbell and Converse Counties innortheast Wyoming. The system would have an initial capacity of 200MMcf/d, but anticipated participation by third parties will likelycause the system design to be extended and expanded, the companiessaid.

Nymex futures gave an early “head fake” looking to rebound fromlosses registered on Tuesday, but the move was insubstantial,giving way to minor softening before the close Wednesday. That leftthe market still in limbo without a clear signal whether the bottomhad been reached. The August contract slipped 1.7 cents to settleat $1.934 during relatively high volume of 82,830.

Cash prices either remained flat or rebounded a cent or two atmost delivery points across the board on Friday, mainly as resultof recent forecasts of above normal temperatures throughout thecountry, and the fact that the relatively low prices made for anattractive storage play opportunity. In addition to minor losses inthe Northeastern markets, Western and Rockies points, whichdemonstrated the most strength during the past week, alsoregistered declines of between 1-4 cents.

Interstate natural gas pipeline Questar’s desire to buy a16-inch-diameter under-utilized oil pipeline from New Mexico toCalifornia with the intention of converting it to a 120-130 MMcf/d,700-mile interstate natural gas pipeline is drawing mixed responsesfrom Southern California’s two natural gas utilities.

The May Nymex contract continued to slowly rebound from itsmassive price downturn on Monday by closing Wednesday up another2.0 cents at $2.521. Trading was held to an extremely tight range,as the spot month could only post a high of $2.555. Total volumewas estimated at 255,671 contracts.

As of Friday Sea Robin expected to restore flow Saturday (Feb.21) on its 16-inch West Cameron 580 lateral, pending favorableweather conditions. The force majeure implemented Jan. 27 whenrepairs on a leak began (see Daily GPI, Jan. 29) was to be releasedwhen the lateral was declared in service, Sea Robin said.

Depending on favorable Gulf of Mexico weather, Sea Robin expectsto restore flows on its 16-inch West Cameron 580 lateral by Sunday(see Daily GPI, Feb. 3). The force majeure that was implementedJan. 27 because of a leak will remain in effect until repairs havebeen completed.