News

Beginning April 1, up to 100,000 Consumers Energy gas customersare going to be able to choose their supplier during the first yearof the company’s statewide Gas Customer Choice program. But whileConsumers said in February that 14 companies indicated they willcompete for customers, some on the list are turning up their noses,at least to residential customers.

Despite current crude oil and natural gas price weakness,PaineWebber believes its 1998 wellhead gas price forecast of$2.15/MMBtu is “conservative.” And PaineWebber raised its 1999 spotwellhead price forecast to $2.35 from $2.20. Although the firmacknowledges first quarter producer earnings probably will suffer asetback, over the long term “we’re very very bullish” for eightreasons, said analyst Ronald J. Barone. First of all, despite ElNino’s impact of a 10% warmer than normal winter, spot gas priceshave averaged a solid $2.04/MMBtu so far this year. If temperatureshad been normal, prices would have averaged $2.50, PaineWebbersaid. Secondly, nine of the last 11 summers that followed an ElNino winter have been warmer than normal. Normal to warmer thannormal temperatures next summer would contrast sharply with the 7%cooler than normal temperatures last summer. And warmertemperatures would have an even greater impact on prices if coupledwith near normal hydroelectric power supply – which PaineWebberalso is expecting – rather than the 150% above normal hydro supplyseen in 1997.

Texaco and Chevron are proceeding on a fast track with a $185million subsea production system for their Gemini prospect, asubsalt project in the deep-water Gulf of Mexico expected to yieldup to 300 Bcf of gas and four million barrels of condensate.

Commissioner Curt Hebert Jr. said a decision in a Granite StateGas Transmission case this week signaled a “radical departure” inthe current policy used by the Commission to judge whether aproposed project has sufficient market demand. Since Order 636, theCommission has required pipelines and other companies to show thatmost, if not all, of a project’s capacity was under long-termcontracts to gain a certificate. “All of that changed [last week],”Hebert told NGI in an interview.

Amoco Oil, Enterprise Products, Exxon Chemical and WilliamsField Services announced plans to form a joint venture to build andoperate a 60,000 b/d natural gas liquids (NGL) fractionationfacility near Baton Rouge, LA. Construction has begun, and start-upis expected next March. The joint venture is to be called BatonRouge Fractionators LLC. Enterprise will operate the plant andmanage fractionation services. Amoco will process its PascagoulaGas Plant volumes at the facility. Exxon will process a portion ofits Louisiana area NGLs there, and Williams will contract toprocess its Mobile Bay Gas Plant volumes at the facility.

Given the lofty prices paid for midstream assets recently, SanAntonio, TX-based Aquila Gas Pipeline believes the time is right totest the waters for a possible sale or merger. The Texas andOklahoma gas processing and pipeline company has hired MerrillLynch & Co. to assist in the effort.

PanCanadian Petroleum has established energy marketerPanCanadian Energy Services through the consolidation ofHouston-based National Gas & Electric and PanCanadian’s naturalgas marketing group in Calgary, AB. The company also operatesregional sales offices across the U.S. in Austin, TX, SanFrancisco, CA, Mobile, AL, and Atlanta, GA. Midwest customers areserved by PanCanadian affiliate National Energy Management, inChicago and Madison, WI. Pan Canadian Energy Services is based inHouston.

Six energy companies agreed to form Tri-States NGL Pipeline tobuild a natural gas liquids (NGL) pipeline from Alabama andMississippi to Louisiana fractionators. The line will link threegas processing plants under construction to new and expandedfractionators on the Mississippi River.

Prices ranged from flat to down a few cents Wednesday, with mostof the softness concentrated in the Gulf Coast, Midcontinent andChicago citygates. Columbia-Appalachia joined those points indeclines of mostly 3-6 cents, but CNG and Northeast citygates weredown only a penny or two. The declines tended to be attributed to”tracking the Nymex,” as a marketer said.