Maintain

If the United States wants to maintain its current standard of living, it will have to become a bigger player in the global gas market by importing more liquefied natural gas (LNG), Federal Reserve Chairman Alan Greenspan told a House panel Tuesday.

The New York Independent System Operator (NYISO) last Thursday called for the approval of 5,000 MW to 7,000 MW of new generating capacity in the next five years to maintain a reliable supply of electricity and keep prices competitive in the state.

Continuing to maintain an ample supply of natural gas in the United States going forward will depend on large, new domestic and imported supply projects, according to the Energy Information Administration (EIA), which last week released the reference case forecast from its “Annual Energy Outlook 2003” (AEO2003). The forecast noted that gas demand in the country is projected to grow 54% by 2025.

Continuing to maintain an ample supply of natural gas in the United States going forward will depend on large, new domestic and imported supply projects, according to the Energy Information Administration (EIA), which released Wednesday the reference case forecast from its “Annual Energy Outlook 2003” (AEO2003). The forecast noted that gas demand in the country is projected to grow 54% by 2025.

While many other producing regions are struggling just to maintain production levels, the Rocky Mountain region continues to see incremental growth, prompting gathering and processing expansions last week by Williams and Duke. Williams completed a $45 million gathering and processing system upgrade in Wamsutter, WY, that will boost processing capacity by 140 MMcf/d and add 70 MMcf/d of gathering. Meanwhile, Duke Energy Field Services completed its third expansion in the Denver-Julesburg (D-J) Basin, adding a new 33 MMcf/d processing plant northeast of Denver.

Despite sharply higher gas prices and an apparent struggle to maintain adequate supply levels, gas producers have more than enough reservoir targets and they are continuing to expand the nation’s gas resource base, according to a biennial report released yesterday by the Potential Gas Committee (PGC). However, committee officials warned that some energy policy changes are needed for the industry to continue expanding the resource and to meet burgeoning demand.

In another topsy-turvy trading session, natural gas futuresfinished well off daily highs, but still in positive territoryyesterday as players bid up the market in the morning only to dumpit lower after fresh storage data was released. The Januarycontract traded within a wide, 50-cent range and closed 22.4 centsstronger at $9.326. Most of the out-months were much more staid,with May through December 2001 contracts only able to tack on a1.5-cent gain. Illiquid trading contributed to the volatility asless than 45,175 contracts changed hands.

El Paso Natural Gas has decided to postpone what it called”routine” maintenance projects on its system in order to maintainthe flow of natural gas into the California market to meet thesurge in demand there. The higher demand has been created by ashortfall in energy imports from the Northwest region, which hasbeen gripped by cold weather.

The cash market showed signs of fatigue Wednesday in strugglingto maintain this week’s upward momentum. Most new gains were in the5-15 cents range, and some western points were beating modestretreats. However, cash may get its second wind today after thescreen reacted quite bullishly to AGA’s first report of net storagewithdrawals this season.