Started

With record levels of natural gas rigs in the ground, it’s about time the industry started showing results. Canadian Hunter Exploration Ltd. is doing just that, as the company announced on Tuesday an increase in gas production to 523 MMcf/d during the first quarter 2001, a jump of 36% over the similar time period a year ago, and a 7% rise from the fourth quarter 2000. As a result, the Calgary-based producer posted a 485% increase in net income to C$145.1 million, or C$2.38 per fully diluted share for the first quarter 2001.

For the seventh Monday in a row, natural gas futures started the week on a strong note yesterday as traders were greeted back from the holiday weekend to inhospitable weather across the nation. Snow showers in the upper Midwest were giving traders one last taste of winter weather while a cold rain was falling across the Northeast. Meanwhile, rain, hail and strong thunderstorms were battering Houston Monday afternoon. Needless to say, it was not a good time to be a seller.

California’s ever-changing electricity saga ended the firstquarter of 2001 as it started the year – a work in progress. Itsscope widened again last week with regulators, legislators and thecourts working overtime to keep up. Supplies remained tight withthree Stage Two power alerts called during the week.

With temperatures going to highs in the 70s and 80s Tuesday,California started into a second day of rolling blackouts at 9:20a.m. PST, but cut them short in the afternoon as two key generatorswent back online and new supplies arrived from the Western AreaPower Administration (WAPA). At press time the early evening peakdemand was still in doubt, and it was possible blackouts wouldstart again.

Storage companies in the Producing Region apparently started digging into base gas two weeks ago as their working storage levels ran dry, according to the American Gas Association’s report for the week ending March 2. The report confirmed the predictions of the Energy Information Administration, which said last week that storage levels will reach record lows this month and operators may have to dip into base gas to maintain deliveries (see related story this issue).

Storage companies in the Producing Region apparently starteddigging into base gas last week as their working storage levels randry, according to the American Gas Association’s report for theweek ending March 2. The report confirmed the predictions of theEnergy Information Administration, which said this week thatstorage levels will reach record lows this month and operators mayhave to dip into base gas to maintain deliveries (see Daily GPI,March 8).

In their sixth asset alliance, NRG Energy Inc. and Dynegy Inc.are expanding their co-owned generation portfolio in the westernUnited States by purchasing one power plant and buying most of thegenerating capacity of another plant from Nevada Power Co. for $634million. Minneapolis-based NRG will be operator and Houston-basedDynegy will serve as power marketer and fuel supplier.

Bangor Gas said it has started deliveries to Bucksport EnergyLLC located at International Paper’s paper mill in Bucksport, ME.Under a 15-year contract with Hydro Quebec Energy Services, BangorGas will deliver 48 MMcf/d of gas to the new 174 MW cogen, whichwill produce power and steam for the mill. The plant is a jointventure between International Paper and Hydro Quebec. With the mainlateral to serve the plant now in place, Bangor Gas said it willfocus on developing a distribution system to serve residential andcommercial customers in Bucksport

Dynegy Inc. has started full-scale operations at the RockinghamPower Plant, a simple-cycle generating facility in RockinghamCounty, NC. The 800 MW plant, developed in just 12 months, is thethird generation facility Dynegy has put on line this summer.