Remain

The end is in sight for the long winning streak chalked up by Canadian natural-gas exporters, as deliveries remain consistently off their formerly torrid pace in setting 14 consecutive annual sales records in the United States. Canadian gas deliveries to the U.S. fell by 5.3% to 2.745 Tcf in the first three-quarters of the current gas contract year that ends Oct. 31 from 2.9 Tcf in the same period of 2000-01, the National Energy Board reports.

The end is in sight for the long winning streak chalked up by Canadian natural-gas exporters, as deliveries remain consistently off their formerly torrid pace in setting 14 consecutive annual sales records in the United States. Canadian gas deliveries to the U.S. fell by 5.3% to 2.745 Tcf in the first three-quarters of the current gas contract year that ends Oct. 31 from 2.9 Tcf in the same period of 2000-01, the National Energy Board reports.

Due to unforeseen problems with the #4 unit at Custer Station (see Daily GPI, Aug. 27), Reliant’s capacity on Line 2 will remain limited to 110,000 dth/day for an undetermined amount of time, the pipeline said Thursday. It also declared a force majeure due to unscheduled repairs on Delhi Compressor Station, which have limited deliveries to Columbia Gulf at Delhi to 240,000 Dth/d since Wednesday morning. Reliant estimated the Delhi repairs could take up to two days.

For the fourth week in a row, the natural gas futures market was unable to eke out much follow-through on the heels of a big move Thursday. However, in sharp contrast to the weeks ending July 26 and Aug. 2, when prices finished on a bearish note, the last two weeks have ended on a decidedly positive note, as traders have resisted the temptation to take profits ahead of the weekend. At $3.149, the September contract ended Friday up 2.2 cents for the day, and 40.4 cents for the week.

While U.S. power markets remain in “fair to good condition,” FERC’s Office of Market Oversight and Investigations (OMI) remains concerned about “continued deterioration in the financial health of market players,” and what that is doing to market liquidity, OMI Chief Bill Hederman said last Wednesday.

A financial community audience hosted by Standard & Poor’s in New York City was told last Wednesday that in the wake of this year’s energy industry credit and credibility crisis, electricity reserves look adequate for North America through 2008, but energy price volatility is expected to continue, particularly in regard to natural gas. On average, however, gas prices should stay in the $2.75-$3.50/MMBtu range, according to a presentation by Boulder, CO-based researcher Douglas Logan, a principal in Platts Research & Consulting/RDI.

FERC Chairman Pat Wood last Wednesday said that it is getting tougher for him to remain committed to the voluntary nature of the Commission’s landmark Order 2000, which spelled out the agency’s expectations that transmission owners will join regional transmission organizations (RTOs), against the backdrop of several RTO membership rosters remaining in a state of flux several years after that decision was issued.

The Gulf of Mexico is expected to remain one of the most prolific natural gas supply regions over the next two decades, with production levels projected to rise by nearly 30% to 6.4 Tcf in 2010, and by more than 40% to 7.2 Tcf in 2020, according to an INGAA Foundation-commissioned study that was forwarded to Senate Energy Committee Chairman Jeff Bingaman (D-NM) last week.

The sale of natural gas in Nova Scotia will remain open to competition. However, now the distributor will be allowed to sell natural gas directly during a seven-year development period — and others may market natural gas as well. Also, large industrial users will be able to connect directly with an offshore supply of gas before it goes into the Maritimes and Northeast pipeline.