Soaring

Soaring wholesale gas prices this winter forced two Maryland retail gas marketers to cut services to some or all of their customers, and one of the marketers, Maryland Natural Gas & Electric/Operators Energy Services (OES), is now facing potential penalties for dumping customers without the required 60-day notice.

Soaring wholesale gas prices this winter have forced two Maryland retail gas marketers to cut services to some or all of their customers. The Maryland Office of Peoples Counsel (OPC) has issued a consumer alert regarding the gas suppliers, Maryland Natural Gas & Electric/Operators Energy Services and ACN Energy.

Soaring gas prices in two of the last three winters have prompted the Citizens Utility Board (CUB) in Illinois to call for state regulatory action to encourage the state’s utilities to improve their risk management practices.

Soaring gas prices in two of the last three winters have prompted the Citizens Utility Board (CUB) in Illinois to call for state regulatory action to encourage the state’s utilities to improve their risk management practices.

Production companies worldwide have been throwing money at reserve replacement efforts with few results over the past few years, according to a new study by Norwalk, CT-based consulting firm John S. Herold, Inc. Profits were down 21% last year, yet capital expenditures were up 14%. Herold said worldwide oil and gas reserve replacement costs soared by 36% in 2001, but producers should find some relief this year and possibly in 2003 because of higher oil and gas prices.

With gas prices soaring over $5 this month, Cabot Oil & Gas Corp. has locked in prices for more of its 2003 and 2004 natural gas production. It also added to its 2003 oil hedge position during the first two weeks of December.

With Rockies basis soaring into the $2.80s in September, Colorado Interstate Gas sees no better time than the present to relaunch its proposed 400-mile Cheyenne Plains pipeline project (formerly called Coastal Connection), which would provide greater takeaway capacity for growing Rocky Mountain gas production. The pipeline would extend from the Cheyenne Hub in northern Colorado to Midcontinent pipeline markets near Greensburg, KS.

With Rockies basis soaring into the $2.80s in September, Colorado Interstate Gas has picked a good time to relaunch its proposed 400-mile Cheyenne Plains pipeline project (formerly called Coastal Connection), which would provide greater takeaway capacity for growing Rocky Mountain gas production. The pipeline would extend from the Cheyenne Hub in northern Colorado to Midcontinent pipeline markets near Greensburg, KS.

Gas market bulls should be wary of an upcoming trap, according to Energy Security Analysis Inc. (ESAI). Despite the 23-cent jump to $3.305 by the near-month gas futures contract on the New York Mercantile Exchange last Monday, the Boston-based consulting firm predicted prices would tumble back to between $2.25-$2.50 in the near term as storage holders begin to sell off inventories to take advantage of higher forward prices. Although April futures backtracked some on Tuesday and Wednesday of last week, they soared 32 cents last Thursday to $3.431 before losing a little ground on Friday.