Sees

Giving interstate pipelines the authority to negotiate terms andconditions of service would pose “significant dangers tocompetitive markets,” Dynegy Inc. says. But it does favor givingsuch authority to pipeline customers – the buyers of recourseservices – to allow them to sell or trade components of theirrecourse services to and among themselves. In short, theHouston-based marketer envisions creating a secondary market forrecourse service components that would compete head-to-head withthe primary market.

The current storage surplus and expected “normal” temperaturesthis summer (14% cooler than last summer) will continue to put adamper on spot prices until the fourth quarter of this year, theEnergy Information Administration predicted last week in itsShort-Term Energy Outlook. The EIA said wellhead prices shouldremain below $2/Mcf until November.

The current storage surplus and expected “normal” temperaturesthis summer (14% cooler than last summer) will continue to put adamper on spot prices until the fourth quarter of this year, theEnergy Information Administration predicted yesterday in itsShort-Term Energy Outlook. The EIA said wellhead prices shouldremain below $2/Mcf until November.

Salomon Smith Barney (SSB) said it is expecting a decline of 400MMcf/d in gas production during the first quarter of this yearcompared to the same period last year and a drop of about 1 Bcf/dby the second half of the year because of the sharp decline indrilling activity. SSB is forecasting gas production in 1999 willbe down 1 Bcf/d compared to last year.

In its weekly outlook on gas storage levels, Salomon SmithBarney (SSB) raised its forecast of expected storage levels at theend of the winter heating season by 117 Bcf from the previous week.The firm, which has grown increasingly bearish because of theclimbing storage surplus, now expects there to be 1,423 Bcf ofworking gas in storage on April 3, which would be 522 Bcf more thanthe four-year average on that date and 364 Bcf more than the sametime last year. Working gas levels in storage as of Feb. 12 were at1,887 Bcf, which is 462 Bcf more than last year on the same date,according to the American Gas Association (AGA).

Salomon Smith Barney (SSB) predicts there will be 405 Bcf moregas in storage at the end of the winter heating season on April 1than the average level of stored gas at the same point over thepast four years. The investment firm raised its forecast forseason-ending storage levels by 72 Bcf last week to 1,306 toreflect lower-than-expected withdrawals for the week ending Feb. 5and 20% warmer than normal weather expected for the week endingFeb. 13. The forecast would put storage levels on April 1 about 247Bcf higher than levels at the same point last year. According tothe American Gas Association (AGA), storage levels currently are428 Bcf higher than they were at the same point last year.

In case anyone hadn’t noticed, profoundly depressed commodityprices have the world oil industry facing serious uncertainty overits future, according to the 1999 edition of World Oil Trends, ajoint report by Arthur Andersen and Cambridge Energy ResearchAssociates (CERA).

Summer power price spikes may have hardly triggered a blip onthe gas spot market last year, but that may not be the case in thenear future. With the expected tremendous growth in gas-fired powergeneration, gas prices are on track to be more closely linked withthe price of electricity than the price of oil, according toCoastal Corp. CEO David A. Arledge.

When assessing the market of an acquisition target, allcustomers are not equal, Columbia Energy Group Chairman Oliver G.Richard told a merger and acquisition symposium this week.