Rise

Despite the sharp change in market direction the past twotrading days, with prices falling as much as 12 cents at somepoints Monday, there was no consensus on whether this is thebeginning of a lengthy slide or just a breather before anothersurge upward.

The magical 30 Tcf annual natural gas market goal is very much arealistic prospect on the demand side, but much more problematicfrom a U.S. supply perspective, according representatives of largeand small producers addressing a national meeting of stateregulators this week.

Southern Company Energy Marketing (SCEM), a joint venture ofSouthern Co. and Vastar Resources, said its second quarterelectricity sales jumped 21% to 48.2 million MWh from last year’ssecond quarter. Natural gas sales, however declined by 8% to 4.3Bcf/d.

Columbia Energy Group beat analysts expectations with a 15% jump($3.3 million or five cents per share) in net income during thesecond quarter to $26.1 million, or 32 cents per share. It alsoupped the ante yesterday in its effort to fend off NiSource’s $5.7billion hostile takeover offer by adding $400 million to its stockrepurchase program, which now totals $420 million.

Calgary-based TransCanada Gas Processing Ltd., the generalpartner of TransCanada Gas Processing LP, said processing volumesat the Cutbank Joule-Thompson (J-T) plant have increasedsignificantly since operations began last month due to tie-in ofChevron Canada Resources production four months ahead of schedule.

Canadian producers expect their natural gas prices to rise by asmuch as 60% when the next heating season catches up with effects ofthe 1998-99 drilling slump.

Canadian producers expect their natural gas prices to rise by asmuch as 60% when the next heating season catches up with effects ofthe 1998-99 drilling slump.

With the Houston trade fair ended, the cash market startedreturning to normal Friday. And continuing the pattern seen formost of February, “normal” meant essentially flat pricing. Butsigns of weakening were more evident as small downticks notablyincreased in frequency. Some of the softness was attributable tothe normal weekend drops in gas demand.

Thanks to a strong fourth quarter, San Francisco-based PG&ampECorp. earnings increased slightly in 1998, mainly due toimprovements in its nonutility operations, particularly in theelectricity businesses. Merchant natural gas operations lost moneyoverall because of Texas operations that continued to operate inthe red.