Peaking

Weekend and Monday gas surged as expected weather-driven demand prompted traders to score some three-day deals rather than take chances on spot availability over what looked to be a scorcher of a weekend in many parts of the country.

California regulators recently approved the replacement of a coastal natural gas-fired baseload power plant with gas-fired peaking units as a statewide ban on seawater cooling for coastal plants draws closer.

Bellevue, WA-based Puget Sound Energy (PSE) has obtained U.S. Department of Energy (DOE) authorization to bring in up to 1 Bcf annually of liquefied natural gas (LNG) in truckloads for a natural gas-fired electric generation peaking plant in the state of Washington.

January natural gas futures fell hard Monday as weather forecasts were adjusted to a slightly warmer outlook, and the Energy Information Administration (EIA) released higher production figures. At the end of the day January futures were down 18.9 cents to $4.210, and February had skidded 17.8 cents to $4.234. January crude oil surged $1.97 to $85.73/bbl.

With Florida citygate prices peaking at $14 on the Aug. 4 trading date and staying well above the rest of the market since mid-June, FERC said it is aware of the situation but believes “extenuating circumstances” in the state explain the price run-up.

With Florida citygate prices peaking at $14 on the Aug. 4 trading date and staying well above the rest of the market since mid-June, FERC said it is aware of the situation but believes “extenuating circumstances” in the state explain the price run-up.

UGI Corp.’s UGI LNG Inc. subsidiary is holding a nonbinding open season through Feb. 25 for the proposed expansion of its Temple LNG (liquefied natural gas) peaking facility near Reading, PA. The expansion would involve adding a 1 Bcf LNG storage tank and increased deliverability of 150 MMcf/d to provide on-peak supplies for the Mid-Atlantic and Northeast markets. The expansion would connect directly to the Texas Eastern Transmission system and would be in service no later than 2012. The existing 0.25 Bcf Temple facility has operated since 1972. Any party interested in contracting for service must submit a bid by 5 p.m. EST on Feb. 25. For information and a bid package, contact Matt Dutzman at (610) 568-1362 or mdutzman@ugilng.com.

Temperatures in most of the U.S. outside the Upper Plains will be peaking around 90 degrees or higher Tuesday, and cash gas prices responded to the increase in power generation load by recording double-digit price increases at most points Monday. A couple of western points rose less than a dime, and the Rockies saw small losses of up to nearly 15 cents.

An expansion of heat levels high enough to prompt use of gas-fired peaking generation units to meet rising air conditioning demand, abetted by a 20-cent futures advance a day earlier, resulted in weekend price gains at most points Friday. The Weather Channel (TWC) reported that with a cold front being held at bay around the Canadian border, “two-thirds of the states will see highs above 90 by Sunday.”