Turnaround

The quick turnaround in U.S. natural gas supplies is another example of energy markets working as has been the case in the regional transmission area for electricity, FERC Commissioner Marc Spitzer said Tuesday at an energy conference in San Francisco, “Energy in California.” Technology advances and the right government policies have made it easier for the gas industry to respond quickly to price signals in recent years, Spitzer said.

While investors, traders and others await the economy’s turnaround, at least one thing has improved since late last year. That would be the market for ethane. Late last year stocks of ethane were building on shrinking demand from the petrochemical sector, leading to negative frac spreads, according to some. However, “inventories…have stabilized,” Enterprise Products Partners LP’s A.J. Teague, chief commercial officer, told NGI recently.

El Paso Corp.’s two-year corporate turnaround is now complete, and 2006 “will cap our return as one of North America’s premier natural gas companies,” CEO Doug Foshee said Wednesday. The company, whose Gulf of Mexico pipelines and platforms were hard hit by Hurricanes Katrina and Rita, also expects to have nearly all of its operated production restored in the second quarter.

TEPPCO has scheduled a concurrent Bird Station shutdown and Pioneer processing facility turnaround in the Jonah Gathering Field to occur both Oct. 5 and Oct. 12. According to the Kern River bulletin board, TEPPCO has estimated that each day’s work will require downtime of approximately 15 hours and an estimated curtailment of 753 MMcf. Because most Kern River supply comes to it either through the Opal Plant downstream of Jonah or the Pioneer receipt points, there will be an impact to Kern River shippers. During TEPPCO’s Oct. 5 maintenance, Kern River will take the opportunity to complete semi-annual maintenance on Fillmore Station’s Unit #2, previously scheduled for Oct. 19, and the Warm Springs Station hot tap, previously scheduled for Oct. 20. The pipeline asked shippers and operators to align their supplies with markets so that no banking occurred Tuesday (in preparation for the Oct. 5 work) and no drafting occurs on Oct. 5.

An $18.5 billion purchase of Unocal by Chinese government-owned China National Offshore Oil Corp. (CNOOC) would mark a turnaround in foreign investment in U.S. energy operations from the steep decline in 2003, according to data released by the Energy Information Administration (EIA).

The oil and gas industry, led by exploration and production (E&P), will be one of the stronger investments in 2003, according to Standard & Poor’s Ratings Service (S&P), which published its year-end equity market wrap-up and outlook on Wednesday. S&P expects the strengthening momentum as the year ends to carry into the coming year.

Except for a major turnaround of previously slumping Rockies prices, Wednesday’s cash market was close to a repeat of Tuesday: flat to a few cents higher at nearly all non-Rockies points. The Midcontinent saw most of the larger non-Rockies increases around 4-8 cents because of snowy conditions returning to its Midwest market area.

Despite the economic downturn and considerably milder weather, NiSource Inc. posted net income of $66.9 million ($0.32 per diluted share) for the fourth quarter of 2001, compared to a net income loss of $4.2 million ($0.02 loss per diluted share) for the equivalent quarter in 2000. The company also had a strong full year, turning a loss in 2000 into a sizeable gain in 2001. The company reported $216.2 million ($1.03 per diluted share) in 2001 net income, compared to $150.9 million ($1.12 per diluted share) in 2000.

Kenneth L. Lay, 59, the chairman and CEO of Enron Corp., resigned on Wednesday night. Although expected by many, Lay’s departure as captain of the company he created in 1985 seemed to signal a new beginning for the now bankrupt energy trader. Enron has begun the search for a restructuring specialist who can move the company from insolvency into the black once again.