Morning

Based on revised weather and demand forecasts received early Monday morning, Sonat issued an OFO Type 3 for eight market-area groups on its system, effective today until further notice. Penalties of $15/Dth apply to any shipper whose deliveries exceed 102% of their daily entitlement at any delivery point within the affected groups. Sonat also will be allocating/limiting IT in three other market-area groups starting today until further notice.

In joint releases Friday morning, Canadian heavyweights PanCanadian Energy Corp. and Alberta Energy Co.(AEC) — the fourth and fifth largest energy companies in the country — announced they are talking about a possible merger. If completed, the company would become one of the largest natural gas producers in North America. Based on Thursday’s closing on The Toronto Stock Exchange, the companies had a market value of C$19.4 billion ($12.1 billion).

In joint releases Friday morning, Canadian heavyweights PanCanadian Energy Corp. and Alberta Energy Co.(AEC) — the fourth and fifth largest energy companies in the country — announced they are talking about a possible merger. If completed, the company would become one of the largest natural gas producers in North America. Based on Thursday’s closing on the Toronto Stock Exchange, the companies had a market value of C$19.4 billion ($12.1 billion).

Citing forecasts indicating that freezing temperatures would be moving into Florida Wednesday night and this morning, and noting that its overall linepack was lower, Florida Gas Transmission declared an Overage Alert Day notice Wednesday for its market area. The notice carried a 15% tolerance for negative daily imbalances.

FERC issued final certificates Wednesday morning to the Maritimes & Northeast Pipeline Phase III expansion project and related HubLine expansion by Algonquin Gas Transmission. The integrated expansions will increase transportation of Atlantic Canadian gas to the Boston area. In addition, Iroquois’ Eastchester project received a final green light from FERC. The $174 million Eastchester project will add 230,000 Dth/d of capacity to the Iroquois system to increase deliveries mainly to New York City power generators.

Saying linepack had stabilized, El Paso canceled Friday an Overpull Penalty Alert that had been issued Wednesday morning. While the OFO was still in place, El Paso postponed repairs on the Dilkon Station’s B turbine until next week. The pipeline had expected to begin the work, which will cause a 30 MMcf/d reduction of North Mainline capacity, last Wednesday.

After extending to fresh four-week highs for the second session in a row Wednesday morning, natural gas futures prices shuffled lower in the afternoon in reaction to the news that a whopping 63 Bcf was added to underground storage facilities last week. The November contract finished almost 30 cents off its $2.69 opening trade, closing 17.4 cents lower at $2.418.

After flirting with new lows for much of the morning on Wednesday, natural gas futures made a break lower in the afternoon as traders continued their mass exodus of long positions on the news that the market was able to post yet another robust storage injection figure. The October contract limped off the board at $1.83, down 9.5 cents for the day and a whopping 56.3 cents less than where it was when it became the prompt contract a month ago.

Con Edison last Wednesday announced the restoration of electrical service to its Cortlandt network in the early morning hours, returning service to all networks in lower Manhattan that lost power because of the recent terrorist attack at the World Trade Center. The company urged customers whose power has been restored to minimize the use of electricity while work continues in the area.