Pipe

Due to an expected rise in Alberta’s prices, eastern Canadiangas buyers will save up to 25% off their delivery costs byswitching suppliers, once the major ongoing pipeline expansionsfinish, a study jointly prepared by Energy ERA (Calgary) and A.E.Sharp & Associates (Toronto) said. The multi-client study,which involved a comprehensive evaluation of the entire NorthAmerican natural gas marketplace and focused on the continentalNortheast, said the savings are expected to begin in the 2000contract year and last until at least 2005. The largest savingsyear will be when the Alliance opens in 2001.

New pipeline development and expansions could add 16 Bcf/d ofcapacity to the national transmission network over the next twoyears (1999-2000) at an estimated cost of about $9.5 billion,according to a report by the Energy Information Administration.While all of the proposed projects may not be built, totalexpenditures are expected to far exceed the $5.1 billion investedduring the last major period of pipeline development in 1992-1993.

A combination of copious amounts of gas both in the pipe andground, and very little weather demand had the stage set perfectlyfor the futures market to trend lower Monday. But despite all theominous fundamental news and bearish sentiment, few traders wereprepared for the price erosion that occurred in early tradingyesterday. The January contract gapped dramatically lower on theopen and quickly set a $1.97 low in the first half hour of trading.That left the spot month to trade sideways for the rest of the daybefore settling at $1.976. In doing so, the January contractcrushed its previous life-of-contract low of $2.085.

Yet another gas futures contract could be coming down the pipe,this time in Chicago where a bounty of Canadian gas expected fromNorthern Border and Alliance Pipeline has Peoples Gas Light &ampCoke thinking its system could host the contract’s delivery point.

Williams completed its Cherokee expansion project, increasingcapacity on the Transcontinental Gas Pipe Line (Transco) system by87 MMDth/d to provide additional firm transportation capacity toserve markets in Georgia. The $68 million project consisted ofadding looping and compression.

FERC Chairman James Hoecker yesterday announced that theCommission will hold a conference on Feb. 25 to address therelationship between interstate pipeline competition and retailunbundling at the state level.

A regulatory expert last week called on FERC to impose amoratorium on awarding market-based rates for primarytransportation capacity due to the expected continued “monopoly”nature of major interstate pipelines.

Columbia Gulf Transmission began construction of a new pipelineto serve three Entergy Louisiana generating plants. Columbia Gulfwill deliver up to 100,000 Dth/d to the plants west of New Orleansalong the Mississippi River. Service is to begin in December.

All the gas flowing to the Florida peninsula was cut off overthe weekend after a lightning strike Friday afternoon caused a fireand pipe rupture at Florida Gas Transmission’s Station 15 nearPerry, FL, and knocked out all downstream service. The 24-inch,30-inch and 36-inch mainlines that converge in the station yardwere affected.