Sink

A major new pipeline project to serve the California market has fallen by the wayside, the victim of lower demand, according to sponsors Kinder Morgan Energy Partners LP (KMP) and Calpine Corp. The two companies said Friday they were dropping their $1.7 billion, 1,030 mile proposed pipeline that would have run from the San Juan Basin in New Mexico to Needles and Topock near the California border.

With little in the way of fresh fundamentals or technicals in which to sink their teeth, bulls and bears did not stray too far from home Friday, as neither was willing to attempt a move ahead of the weekend. After opening at $2.14, the March contract shuffled sideways for four-and-a-half hours before closing even with Thursday’s settle at $2.138. At 53,618, estimated volume on Friday was extremely light.

With Henry Hub natural gas prices “bouncing” around $2/Mcf, and prices in the Rockies even more lackluster, producers once again are re-evaluating drilling budgets, pulling back on near-term production activity, and “dusting off” plans to shut in production — plans that they haven’t looked at in years, says the Energy and Environmental Analysis Inc. (EEA) in its October gas update.

Prices continued to sink Friday, but by significantly smaller amounts than the day before. Declines mostly ranged between a nickel and 15 cents, but were larger in California largely due to milder weather in the state. A majority of the price drops were in the vicinity of a dime.

No fooling; the April aftermarket remains quite weak in its early days. San Juan Basin/Rockies quotes dipped as low as the $3.20s Monday amid an overall market dive that saw nearly all points dropping by a quarter or more. Only a moderate rise of a little more than a dime at the Southern California border, leaving it only about a dime shy of the April index, went against the overall softening tendency.

Seizing upon a deadline ultimatum recently issued by FERC forthe proposed Independence Pipeline and associated SupplyLinkexpansion, Pennsylvania Rep. Frank LaGrotta has called on theCommission to revoke the certificate for the construction of thecontroversial, multi-state project.

While the American Gas Association (AGA) report loomed at theend of Wednesday’s trading, moderate temperature forecasts and theeasing of New England and New York electricity jams were enough tocause drops of more than a nickel in the Northeast. The New Yorkcitygate ended the day in the mid $2.50s after ascending to the mid$2.70s on Monday.

Most of the cash market continued to sink a few cents lowerMonday in price showings that ranged from essentially flat to downmore than a dime on ANR’s Southeast Mainline, which is experiencinga capacity curtailment of about 100 MMcf/d during May due tocompressor maintenance.

The Rocky Mountain Oil &amp Gas Association (RMOGA) has fallenprey to low commodity prices and industry belt-tightening justshort of its 80th anniversary. The trade group plans to shut itsdoors permanently June 1.