Necessary

Energy companies need to embrace trading as a necessary core component of their energy operations and must develop a trading strategy that “encapsulates effective governance and active risk management” in order to survive, according to a new report by PricewaterhouseCoopers titled “Energy Trading – Re-establishing Sound Foundations.”

Citing necessary maintenance on the #3 and #4 compressor units at the Custer OK Station, Reliant limited capacity on Line 2 Monday to 110,000 Dth/day. The work is expected to be completed by the start of Friday’s gas day.

As it had said Tuesday might be necessary (see Daily GPI, Feb. 6), Florida Gas Transmission issued an Overage Alert Day notice for Wednesday’s gas day with 15% tolerance for negative daily imbalances. “Current weather forecasts indicate that cold weather will continue in the Southeast tonight and tomorrow morning, and FGT’s overall linepack is low,” said the bulletin board posting Wednesday morning.

A unit of Williams announced that it has completed facilities necessary to transport natural gas to the Bluegrass Generation Facility being built by Dynegy Inc. about 20 miles northeast of Louisville, KY. Williams said the 500 MW power plant, which is scheduled to begin commercial operation during the second quarter of 2002, will be able to receive up to 165,000 Dth/d of natural gas through a meter station recently completed on Williams’ Texas Gas pipeline system. “We look forward to providing reliable, cost-effective natural gas service to Dynegy’s Bluegrass Generation Facility,” said Dean Jones, vice president of customer services and rates for Williams’ Central and Texas Gas pipeline systems. “Service to this plant is part of Williams’ growing nationwide commitment to the fast-emerging power generation market.”

After it had obtained all of the necessary regulatory approvals, Burlington Resources Inc. said Tuesday that it has received acceptance of its C$53.00 per share cash tender offer to acquire all the common shares of Canadian Hunter Exploration Ltd. by Canadian Hunter’s shareholders. A total of 58.7 million shares of Canadian Hunter common stock were tendered under the offer. The deal represents more than 98% of Canadian Hunter’s shares outstanding. Burlington said it intends to take up the tendered shares immediately. Burlington said it would acquire the remaining shares of Canadian Hunter by compulsory acquisition for C$53.00 per share in cash. “Canadian Hunter’s performance continues to exceed expectations, and the completion of this transaction further establishes Burlington as a significant player in Canada,” said Bobby S. Shackouls, Burlington CEO. “Our combined entities are uniquely positioned for future profitable growth, and we are delighted to welcome Canadian Hunter’s employees to the Burlington Resources family.”

El Paso said it has become necessary to shut down Line 1600 upstream of Casa Grande Station one day earlier than previously announced. The line will be down on Nov. 15, instead of Nov. 16. Capacity of the South Mainline will be reduced by 245 MMcf/d effective for Cycle 2 on Nov. 15. The work will be completed prior to the start of the Nov. 16 gas day. El Paso also said Line 1218 downstream of Bondad Station was taken out of service for emergency repairs Wednesday reducing the capacity through Bondad Station by 190 MMcf/d. The reduction was effective for Cycle 4 and will continue through today. Line 1110 between Keystone and Pecos River Stations will be shut in for repairs on Thursday as well, reducing the capacity through Pecos River Station by an additional 40 MMcf/d to 800 MMcf/d capacity. If you have operational or scheduling questions, call your scheduling representative at (719) 520-4706.

Tennessee reported experiencing unanticipated delays in completing necessary pipeline modifications at the Yscloskey Gas Processing Plant, located near Main Line Valve 529 in southeast Louisiana. This delay does not impact available capacity on the 500 Line, Tennessee said, but the Eloi Bay meter will stay out of service until the modifications are finished. The pipeline anticipated being able to resume partial Yscloskey deliveries Thursday, and expects the plant to be processing about 600 MMcf/d around Sunday. It also hopes to complete the pipe modifications late Sunday, upon which full deliveries to Yscloskey for processing will resume and the Eloi Bay meter will return to service.

Tennessee reported experiencing unanticipated delays in completing necessary pipeline modifications at the Yscloskey Gas Processing Plant, located near Main Line Valve 529 in southeast Louisiana. This delay does not impact available capacity on the 500 Line, Tennessee said, but the Eloi Bay meter will stay out of service until the modifications are finished. On or about today, the pipeline anticipates being able to resume partial Yscloskey deliveries, and expects the plant to be processing about 600 MMcf/d around Sunday. It also hopes to complete the pipe modifications latee Sunday, upon which full deliveries to Yscloskey for processing will resume and the Eloi Bay meter will return to service.

As it had said might be necessary due to processing cutbacks (see Daily GPI, Oct. 29), ANR declared an OFO Monday restricting receipts on its Southeast system to heating value of no more than 1,050 Btus per cubic foot. The OFO becomes effective Nov. 1 until further notice.