Likelihood

Taking seriously the likelihood that gas supply will remain tight and prices volatile, California’s two major gas utilities late Tuesday outlined their visions for opening up the market and infrastructure for more gas-on-gas competition. The details were filed at the California Public Utilities Commission (CPUC) as part of the CPUC’s Order Instituting Rulemaking (OIR).

Taking seriously the likelihood that gas supply will remain tight and prices volatile, California’s two major gas utilities late Tuesday outlined their visions for opening up the market and infrastructure for more gas-on-gas competition. The details were filed at the California Public Utilities Commission (CPUC) as part of the CPUC’s Order Instituting Rulemaking (OIR).

A feasibility study on a Mackenzie Delta pipeline won’t be ready before the middle of 2003, and a completed project’s timing now falls between 2007-2010, said a Shell Canada Ltd. executive last week. Shell Canada is one of the partners in a consortium to move natural gas from the prolific region, but despite the delay, the company has begun buying more land and developing the frontier basin in anticipation of laying a pipe.

A feasibility study on a Mackenzie Delta pipeline won’t be ready before the middle of 2003, and a completed project’s timing now falls between 2007-2010, said a Shell Canada Ltd. executive Monday. Shell Canada is one of the partners in a consortium to move natural gas from the prolific region, but despite the delay, the company has begun buying more land and developing the frontier basin in anticipation of laying a pipe.

Dynegy’s President Steve Bergstrom told analysts in New York Thursday that there’s a higher likelihood now for an energy market expansion rather than a consolidation. Speaking at UBS Warburg’s Global Energy and Utilities Conference, Bergstrom said the massive 25% market share of Enron currently is being dispersed among other existing energy players, but there’s room for more big players in this growing market.

While the shock of the probable demise of Enron monopolized conversation in all trading rooms (see related story), swing prices continued to shoot higher Wednesday as winter storms raged through much of the nation’s midsection and parts of the West. Cold temperatures were prevalent almost everywhere except in the Southeast and Mid-Atlantic states.

The likelihood of friction between state and federal regulators increasing over deregulation plans if states slow or walk away from retail competition is just one of several important implications resulting from the ongoing shockwave that has rolled through the Western energy markets, according to a new report issued Tuesday by Andersen.

A property swap announced yesterday by Anadarko Petroleum andAEC Oil and Gas illustrates the increased activity in the far Northand the likelihood that the North Slope in Alaska and the MackenzieDelta in the Northwest Territories of Canada are equally importantfuture supply sources for the U.S. marketplace.

Removal of a 4% import tariff on natural gas July 1, new openaccess transportation rates and the likelihood that Mexico willbegin privatization of its electric industry this year are makingthe country a more attractive business target for the U.S. energyindustry, and California-based Sempra Energy is taking immediateadvantage of the opening.