Takes

Southern Natural Gas declared an OFO Type 6 for long imbalances that takes effect Friday until further notice. No penalty will apply to long imbalances less than 2% or 200 dekatherms (whichever is less) in excess of scheduled volumes. Tiered penalties will be charged for imbalances greater than 2%, topped by $15/Dth for imbalances exceeding 8%. Southern said it was “highly likely” that the OFO will be extended through at least Saturday and Sunday.

El Paso set an imbalance tolerance of 4% in declaring a systemwide Strained Operating Condition Thursday. “Underperforming supplies in combination with takes that exceed scheduled quantities have significantly reduced linepack,” the pipeline said, adding that its Washington Ranch Storage facility is at maximum withdrawal rates. El Paso said it will place performance caps on nonperforming supplies, and will declare a Critical Operating Condition if the situation does not improve.

The spotlight will be on FERC Thursday as it takes up the controversial case involving return on equity (ROE) for the Wyoming-to-California Kern River Gas Transmission pipeline.

High demand combined with takes in excess of receipts has resulted in a loss of 140 MMcf in system linepack over the last 24 hours, El Paso said Tuesday, and its Washington Ranch storage facility was experiencing maximum withdrawals. “Scheduled pigging of the Havasu Crossover is under way, affecting access to San Juan Basin supply to the South System. The EOC [east of California] takeaway is running approximately 100 MMcf/d higher than at this time yesterday [Monday],” the pipeline said.. There is available capacity on the South System from Waha and through Guadalupe, it added. Maintenance on the San Juan Crossover and further pigging of the Havasu Crossover are scheduled for later this week, requiring that sufficient system linepack be maintained, El Paso said. A Strained Operating Condition may be declared unless the situation improves, it warned.

FERC’s upcoming meeting Thursday is expected to be a blockbuster one, as the agency takes action on issues involving gas quality and the interchangeability of liquefied natural gas (LNG) and traditional gas, a joint pipeline-producer petition for broader blanket certificate authority, the agency’s proposed storage rule and a host of new LNG projects and expansions.

Kenneth Lay, the founder and former chairman of Enron Corp., takes the spotlight in a Houston courtroom on Monday to answer charges that he conspired to commit securities and wire fraud in the three months before Enron declared bankruptcy in December 2001. Lay’s testimony comes just a few days after former CEO Jeffrey Skilling took his turn in the witness chair, maintaining his innocence on 28 criminal counts.

In the story titled “El Paso Takes New Precautions in Preparation for Another Active Hurricane Season,” which ran in the April 13 edition of NGI’s Daily Gas Price Index, it was incorrectly reported that El Paso “was forced to sell off assets, issue debt and enter into new credit facilities to maintain liquidity while paying” for hurricane repairs. The hurricane costs were only one of the factors influencing liquidity. Other factors, including oil and gas derivative transactions put in place in prior years, also had an impact, creating the need to sell assets, issue debt and enter into new credit facilities.

The battle for the over-the-counter (OTC) market entered the courtroom on Wednesday as the New York Mercantile Exchange (Nymex) filed a lawsuit against IntercontinentalExchange (ICE) for copyright violations in its use of Nymex natural gas and crude oil futures settlement prices.

Pacific Gas & Electric issued a systemwide Stage 2 high-inventory OFO that takes effect Friday. It carries penalties of $1/Dth for exceeding a 5% tolerance on positive daily imbalances.