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Cash prices Monday recovered all or most of the territory theyhad lost on Friday-and even more in some cases. Buoyed by a sharplyhigher screen and even a bit of re-emerging air conditioning load,cash numbers moved up by about a dime or more at virtually allpoints except Northern California, topped off by scattered gains of20-21 cents. Even crude oil futures, which had been in free-falllate last week, added a little psychological strength by clawingtheir way back above $21/bbl.

While most natural gas customers in Floyd-ravaged areas of theEast Coast were expected to be back on line by today – over a weekafter the hurricane struck – recovery for some in North Carolinawill be a long term project.

The 1 Bcf/d Vector Pipeline project continued moving ahead asthe most likely new Midwest pipeline project to break ground andbegin construction. Westcoast Energy decided to grab a 30% equitystake and committed to take 240 MMcf/d of firm capacity in the $500million project. The transaction gives Westcoast a major stake ineach of three new gas pipeline projects that will form a newdelivery corridor to the Midwest, Northeast and eastern Canada fromthe Western Canadian Sedimentary Basin.

Cash prices continued this week’s slide Wednesday, although thedescent wasn’t as steep as on the day before. Most of the newdeclines were around a dime or slightly more. The few pipes fallingless than a dime tended to be clustered in the Midcontinent.

Just as what could be remembered as one of the most intensehurricanes ever to make landfall on U.S. soil gradually turned tothe north and away from production assets in the Gulf of Mexico,natural gas futures turned south yesterday as traders priced stormconcerns out of the market. After gapping lower to open at $2.69the October contract never looked back, tumbling 14.5 cents on theday to finish at $2.636.

CMS Oil & Gas announced last week the start of commercialoperations at the Fort Union Gas Gathering System, one of its mostimportant Powder River Basin assets, and the opening of a newoffice in downtown Denver to manage the company’s activities in thebasin. Gas started flowing through the Fort Union system Sept. 1.

After previously estimating that an outage of most production onMatagorda Offshore Pipeline System due to a line leak would last untilnext Wednesday (see Daily GPI, Sept. 10), MOPS operator Northern NaturalGas said leak repairs were completed Friday morning, two days afterthe outage began. Only about 15 MMcf/d remained shut in, a spokesmansaid, and that was expected to be restored late Friday afternoon.

Houston-based Reliant Energy Services Inc. will supply most ofthe gas needed by the Los Angeles Department of Water and Power(LADWP) and maximize the municipal utility’s gas assets. A one-yearagreement calls for Reliant Energy to provide a minimum of 9Bcf/year as well as administer the department’s interstate gastransportation agreements. The gas to be purchased is worth about$25 million.

Fourteen consecutive months of declining drilling rigutilization came to an end in July, according to Global Marine’smost recent SCORE report, or Summary of Current Offshore RigEconomics. And the Gulf of Mexico appears to be leading theturnaround.