Revised

Adding to pre-holiday losses notched last Wednesday, natural gas futures gapped lower at the open bell Monday as traders learned that the bearish combination of storage and weather is unchanged from last week. However, after plumbing a $2.61 low shortly after the open, the December contract shuffled higher yesterday to retake a portion of its earlier losses. The prompt month finished at $2.696 down 11.7 cents for the session, but up 8.6 cents from its low Monday.

The Federal Energy Regulatory Commission (FERC) issued certificates last week for multiple new gas pipeline infrastructure projects designed to meet mainly new power generation demand in many regions of the country. It granted final approvals for Transcontinental Gas Pipe Line’s Leidy East expansion in Pennsylvania and New Jersey, a new pipeline by Petal Gas Storage in Mississippi, an ANR lateral extension to serve the 1,050 MW Badger power plant in Kenosha, WI, and Northwest Pipeline’s 9.4-mile Everett Delta Lateral to serve generation and LDC demand in the state of Washington. The Commission also denied rehearing of its orders granting Kern River Gas Transmission certificates to expand its system by about 135 MMcf/d.

El Paso revised its schedule for North Mainline capacity reductions caused by continuing outages of Window Rock Station’s 5A and 6B units along with work on Line 1200 between Williams and Seligman Stations, Navajo Station inspections ordered by the federal Department of Transportation, and Leupp C and D Station modifications. The new dates and volume cuts (in MMcf/d) through the rest of this month are: Sept. 18-19, 150; Sept. 20, 300; Sept. 21-23, 55; Sept. 24-25, 65; Sept. 26-27, 170; and Sept. 28-30, 155. El Paso also postponed Line 1300 pigging between the Roswell and Caprock stations until Sept. 25-28, when San Juan Crossover capacity will be reduced by 50 MMcf/d.

Due to “overstated” revenues at its SouthStar retail marketing joint venture, AGL Resources Inc. has revised its earnings guidance for fiscal year 2001 to between $1.49 and $1.51 per share, from the current First Call consensus of $1.55 per share. SouthStar Energy Services LLC is a partnership among AGL Resources, Piedmont Natural Gas and Dynegy Inc.

Although Avista Corp. has revised its earnings projections for 2001 upward in the wake of positive second quarter earnings results, company executives said that the political and regulatory uncertainty that continues to swirl around western energy markets muddles its ability to forecast how its energy trading and marketing arm will perform over the next year or so.

ANR revised the schedule of capacity reductions that was posted last week for June 4-July 6 maintenance on its Southeast Mainline (see Daily GPI, May 22). Here is the new schedule: June 4-10, 195 MMcf/d; June 11-12, 225 MMcf/d; June 13-24, 60 MMcf/d; June 25-26, 140 MMcf/d; June 27-July 3, 220 MMcf/d; and July 4-6, 25 MMcf/d. ANR also said Michigan Leg capacity will be cut by about 200 MMcf/d while the 22-inch mainline is pigged later this month. Pigging of the Sandwich to Bridgman segment will occur during the week of June 18, while the Bridgman to Woolfolk segment will be pigged during the week of June 25.

Amid revised forecasts calling for warmer-than-normal weatherthrough mid-month, natural gas futures prices plunged yesterday astraders took advantage of a gap lower open and quickly pushed theMarch contract to its $1.00 lock-limit down. After being halted forthe Nymex-mandated 15 minutes, trading resumed at 11:15 a.m. (ET)yesterday with new $2.00 limits on either side of Friday’s $6.743March close. Additional selling was seen at the close, demoting theprompt month to $5.706, a $1.037 loss for the day.

A revised National Weather Service forecast, expanding theprediction of below normal temperatures for the Christmas weekendto the entire United States except for the sparsely populated UpperPlains, kept most prices from softening Friday, as some hadanticipated. Except for the still-most-expensive West Coast market,all other points realized gains from about a dime (San Juan Basin)to a little more than 50 cents (Northern Natural Gas market area).

Fueled by a record-setting storage withdrawal released yesterdayand revised outlooks by both private and governmental weatherforecasters, natural gas futures rocketed higher yesterday toeasily notch new all-time highs.