To hasten FERC approval of its Canada-to-Illinois project,Viking Voyageur Gas Transmission said it would be willing to beplaced at-risk for any capacity that is unsubscribed during thefirst 10 years of the pipeline’s operation.
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Analyst: Eight Reasons to be Bullish
Despite current crude oil and natural gas price weakness,PaineWebber believes its 1998 wellhead gas price forecast of$2.15/MMBtu is “conservative.” And PaineWebber raised its 1999 spotwellhead price forecast to $2.35 from $2.20. Although the firmacknowledges first quarter producer earnings probably will suffer asetback, over the long term “we’re very very bullish” for eightreasons, said analyst Ronald J. Barone. First of all, despite ElNino’s impact of a 10% warmer than normal winter, spot gas priceshave averaged a solid $2.04/MMBtu so far this year. If temperatureshad been normal, prices would have averaged $2.50, PaineWebbersaid. Secondly, nine of the last 11 summers that followed an ElNino winter have been warmer than normal. Normal to warmer thannormal temperatures next summer would contrast sharply with the 7%cooler than normal temperatures last summer. And warmertemperatures would have an even greater impact on prices if coupledwith near normal hydroelectric power supply – which PaineWebberalso is expecting – rather than the 150% above normal hydro supplyseen in 1997.
Gemini Partners Moving Ahead in Gulf
Texaco and Chevron are proceeding on a fast track with a $185million subsea production system for their Gemini prospect, asubsalt project in the deep-water Gulf of Mexico expected to yieldup to 300 Bcf of gas and four million barrels of condensate.
Energy Council Against Fuel Mix Mandates; Favors LNG
The Energy Council has unanimously adopted a policy statementvoicing strident opposition to congressional restructuring measuresthat would mandate states to use a specific fuel mix in thegeneration of electric power. It also said it was against federallymandated targets for states to supply power from renewable energysources.
Columbia Buys Canadian Properties
Columbia Natural Resources (CNR) has expanded operations toeastern Canada with the purchase of an interest in gas and oilwells and undeveloped property in Ontario. The US$3.6 millionacquisition from Paragon Petroleum of Calgary includes a 50%interest in 24 wells and 100% of 5,000 acres of undevelopedproperty. The owner of the other 50% of the wells is CanEnercoLtd., which will market gas production. “Our move into Canada isthe second expansion of CNR’s base of operation in less than ayear,” said W. Henry Harmon, CEO. CNR’s $101 million purchase ofAlamco Inc. last August increased reserves by 25% and expandedcompany operations into southern Kentucky and northern Tennessee.
New, Efficient Engine Could Burn Natural Gas
Rolls-Royce has announced a new line of engines that may changethe face of distributed generation. Since 1994 the automotivecompany has been conducting research to design a new generator thatwill help propel the company into the major leagues for distributedgeneration around the world.
Hebert Views FERC’s LNG Decision as Policy Shift
Commissioner Curt Hebert Jr. said a decision in a Granite StateGas Transmission case this week signaled a “radical departure” inthe current policy used by the Commission to judge whether aproposed project has sufficient market demand. Since Order 636, theCommission has required pipelines and other companies to show thatmost, if not all, of a project’s capacity was under long-termcontracts to gain a certificate. “All of that changed [last week],”Hebert told NGI in an interview.
Four Partners Plan Gulf Area Fractionation
Amoco Oil, Enterprise Products, Exxon Chemical and WilliamsField Services announced plans to form a joint venture to build andoperate a 60,000 b/d natural gas liquids (NGL) fractionationfacility near Baton Rouge, LA. Construction has begun, and start-upis expected next March. The joint venture is to be called BatonRouge Fractionators LLC. Enterprise will operate the plant andmanage fractionation services. Amoco will process its PascagoulaGas Plant volumes at the facility. Exxon will process a portion ofits Louisiana area NGLs there, and Williams will contract toprocess its Mobile Bay Gas Plant volumes at the facility.
Aquila Gas Pipeline on the Auction Block
Given the lofty prices paid for midstream assets recently, SanAntonio, TX-based Aquila Gas Pipeline believes the time is right totest the waters for a possible sale or merger. The Texas andOklahoma gas processing and pipeline company has hired MerrillLynch & Co. to assist in the effort.
PanCanadian Launches North American Marketer
PanCanadian Petroleum has established energy marketerPanCanadian Energy Services through the consolidation ofHouston-based National Gas & Electric and PanCanadian’s naturalgas marketing group in Calgary, AB. The company also operatesregional sales offices across the U.S. in Austin, TX, SanFrancisco, CA, Mobile, AL, and Atlanta, GA. Midwest customers areserved by PanCanadian affiliate National Energy Management, inChicago and Madison, WI. Pan Canadian Energy Services is based inHouston.