Point

Sonat lifted two forces majeure Friday. One was related to thecompletion of valve maintenance at the Dalton (GA) #2 delivery point(see Daily GPI, Oct. 15) that had begunThursday; the other had begun Oct. 3 in conjunction with a shut-intest and engine maintenance at the Bear Creek (LA) Storage Facility.

Due to valve maintenance, Sonat shut in the Dalton (GA) #2delivery point Thursday until further notice.

Natural gas futures continued lower in an abbreviatedpre-holiday trading session Friday, adding to losses achievedWednesday and Thursday and stifling the hopes of bulls who werelooking for short-covering buying into the long weekend. The Augustcontract finished down 2.2 cents on the day at $2.287, 13.3 centsless than Wednesday’s high price. Estimated volume was an extremelymodest 28,784.

Nearly every trading point continued to build Wednesday on theslight degree of bullishness established on Tuesday. The majorityof increases were moderate, within the range of 2-4 cents. Therewas “just a little more heat” to raise cooling load a notch higher,said a Midcontinent source, and the futures screen literally put inits 2 cents worth with a rise of a little over that amount.

The April aftermarket was off to a very strong beginning inswing deals done Wednesday. Virtually every point was trading abovebidweek levels and in some cases much higher. For example, a buyerwho paid in the mid $1.70s for April baseload at the SouthernCalifornia border reported a $1.90-95 swing range. Most sourcesagreed that the incremental price strength derived almost entirelyfrom “following the screen” upward.

Sumas was making waves in the gas market earlier in the week bybeing the first point to exceed $3 pricing in this winter season.But it was tsunami time Friday as the $3 level was left way behind.How does paying $25/Mcf for Canadian supplies grab you?

Sumas had the distinction Tuesday of being the first point tosurpass $3 pricing in the current winter heating season, althoughPG&E citygates had gotten as high as $2.92 in the second weekof November (see Daily GPI, Nov. 11). In super-volatile quotes thatranged from the $2.20 area to as high as $3.40 (one source said heheard a $3.50 deal got done), Sumas soared far above an overallmarket that had turned stagnant since Monday’s strong rebound.

The Powder River Basin in Wyoming is expected to become thehottest new gas supply point in the Rocky Mountain region over thenext few years, and multiple pipeline companies are fighting toothand nail to deliver the burgeoning supplies. The basin is expectedto show huge production growth in a relatively short period oftime, leading some observers to compare it with the San Juan Basin,where the benefit of tax credits on coal-seam gas triggered rapiddevelopment. But Powder River producers, such as Barrett Resourcesand Western Gas Resources, are doing the job without federal help.New E&P technologies and finding techniques have enabledproducers to find the reserve sweet spots faster than ever before.

Mojave Pipeline will shut in its Mt. Poso delivery point foreight hours July 28 to modify piping. El Paso’s Monument B Plantwill be down eight hours on July 29 for piping repairs. TheIWARMONU interconnect will be completely shut in while ITEXNEUNwill be limited to 35 MMcf/d.