Keep

Destin Pipeline continued to keep about 600 MMcf/d of offshore gasshut in Tuesday and today. The latest word Tuesday from BP Amoco,operator of the Pascagoula (MS) Gas Plant into which Destin feeds, wasthat repairs of a leak in a downstream natural gas liquids line (seeDaily GPI, March 6) likely would not becompleted before late this evening, according to a Destinstaffer. However, Williams Field Services, which has a unit thatoperates the liquids line, said the line had been cleared andexcavation was starting Tuesday afternoon. “We should have a muchbetter picture of the work Wednesday morning,” a WFS spokesman said,adding that line service could be restored at any time during the day.

In a last ditch effort to keep prices above the longterm trendline, bulls in the gas pit at Nymex battled back yesterday,propelling April prices higher throughout the morning hours. As itturns out, that buying pressure would not be tested, and from thatpoint forward prices chopped sideways throughout the afternoon.With that, the April 2001 contract concluded its first session asprompt month with a neat, 18.2-cent gain to finish at $5.279.

Operating under a two-week extension of emergency orders to keeppower and gas supplies flowing, courtesy of the new Bushadministration, California government leaders last week conductedthe state’s first-ever power auction for long-term contracts, andcontinued to work on new legislation to revitalize its crumblingpower structure.

The rapid pace of development in the Powder River Basin ofWyoming and Montana has surprised everyone, and regulators arehaving a little trouble keeping up with the demands of productiongrowth. A period of regulatory catch-up could hinder short-termdevelopment and production growth, but observers believe thelong-term outlook on this prolific basin is extremely positive.

While not plunging quite as steeply as the day before, pricesfor the weekend continued to record double-digit declines Friday.There was considerably more consistency across all markets than onThursday as virtually all points fell between 15 cents and about aquarter.

Finding Friday’s customer-specific OFO (see Daily GPI, Sept. 22) insufficient to keep itsprojected linepack from rising well above target levels over theweekend, Pacific Gas & Electric expanded it to a systemwide Stage3 high-linepack OFO for Saturday. The order carried $5/Dth penaltiesfor positive daily imbalances exceeding a 2% tolerance.

It’s not just the price of natural gas that’s going up; “Growthin natural gas consumption will increase the average marginal valueof pipeline capacity and keep gas prices high throughout theremainder of this decade,” according to a report by Energy andEnvironmental Analysis (EEA).

As it continues to assuage concerned landowners and perhaps keepa positive image in front of regulators, Houston’s Coastal Corp.yesterday touted the benefits of its proposed Gulfstream NaturalGas System LLC affiliate, saying that the Florida pipeline willpump $1.2 billion into the Sunshine state’s economy, most of thatcoming during the construction phase.

Cash quotes continued to rise Wednesday in both swing deals fortoday and in what little bit of bidweek business remained to bedone. However, doubt was growing about how much longer theunprecedented recent price strength can be maintained after futuresreacted negatively to a storage report for the first time in morethan a month.