Peaking

The recent boom in baseload, intermediate and peaking power generation additions in the United States is now over and capacity additions will be made at a much slower rate over the next decade, according to the latest Fuelcast Long-Term Outlook by Arlington, VA-based Energy Ventures Analysis. A renewed interest in coal-fired generation because of recent gas price increases also is expected to put coal back in a dominant position when it comes to new generation capacity additions.

Lukewarm heating season demand cut sales volumes, but peaking prices increased revenues during the first quarter of the current contract year on the international natural gas market. Canadian pipeline deliveries to the United States during the three months ended Jan. 31 fell 9% to 925.3 Bcf compared to the same period of 2004-05, according to trade records kept by the National Energy Board.

Lukewarm heating season demand cut Canadian gas export volumes but peaking prices increased revenues during the first quarter of the current contract year on the international natural gas market. Canadian pipeline deliveries to the United States during the three months ended Jan. 31 fell 9% to 925.3 Bcf compared to the same period of 2004-05, show trade records kept by the National Energy Board.

After settling near the day’s high on Monday, May natural gas futures wasted almost no time in reversing their course on Tuesday. After peaking at $7.39 in morning trade, the prompt month spent the rest of the session exploring lower, reaching a low of $7.085 just before settling at $7.094, down 21.5 cents on the day. With the recent uptrend now broken, some market experts believe that $7 futures might not be around much longer.

AGL Resources subsidiary Atlanta Gas Light (AGL) has issued a request for bids to contract for incremental, 10-day firm natural gas peaking service in the amount of 68,000 dth/d on its Georgia system. AGL launched the request for bids as a result of the Georgia Public Service Commission’s Oct. 26, 2004 order regarding the company’s 2004-2007 capacity supply plan. Terms of the two-year contract will commence Nov. 1, 2005. For more information on terms and conditions of the bid as well as for bid forms, contact Tim Kennedy, senior analyst, capacity planning, at (404) 584-3290 or tkennedy@aglresources.com. AGL provides delivery service to more than 1.5 million customers in Georgia.

After beginning Friday’s session on a sideways-to-slightly-lower path, April natural gas futures started to tilt upwards ever so slightly beginning at 11 a.m. EST. After peaking at $7.31 in afternoon trading, the prompt month went on to settle at $7.273, up 3.5 cents on the session and a whopping 50.1 cents over the previous Friday’s close.

Sendout capacity at the Trunkline LNG facility in Lake Charles, LA will be limited to 900,000 Dth/d during pump maintenance beginning Feb. 10. Peaking sendout is expected to return to 1 million Dth/d on Feb. 15.

Northeast citygates were peaking above $10 again Friday as the region entered another period of intense cold. But other than Northeast upticks ranging from a little less than 20 cents to about $1.80, gains were few and far between in the rest of the market. Most points fell from about a nickel to a quarter.

Since peaking last year in the second quarter with the top output from the Ladyfern field in British Columbia, Canadian gas production and exports to the United States have been on a slippery slope and that isn’t expected to change anytime soon.