Turned

Major pipeline-only companies for the most part turned in”better-than-expected” performances during the first quarter of theyear, while integrated pipelines took some big hits – particularlyin the oilpatch, gas analysts said. Fortunately for someintegrateds, the bigger profits from their unregulated activitieshelped to offset the losses.

Enron’s retail energy provider, Enron Energy Services (EES), hasnot turned a profit to date but is expected to do so by the fourthquarter of this year and “from then on,” said Marty Sunde, EES’senior vice president of sales and marketing.

Natural gas futures turned lower yesterday when a mixed bag ofspeculative and non-speculative selling more than offset light fundbuying. After gapping lower at the open, the February contractquickly mapped out its small, 5-cent trading range and moved verylittle for the remainder of the session. But the price damage hadalready been done, leaving the prompt month 9.6 cents lower tofinish at $1.975 and putting an abrupt halt to a 3-day, 29 centprice spike.

El Paso Energy’s two pipelines combined lost $2 million, but thecompany still turned in improved earnings. Third quarter earningswere 43 cents/diluted share, an increase of 16% from 37 cents in Q31997.

Nation Fuel Gas Supply Corp. is holding an open season for19,100 Dth/d of long-term firm transportation capacity that hasbeen turned backed to its system. The open season will terminate onSept. 11.

FERC turned the heat on pipeline competition in the Colorado andWyoming markets up a notch or two last week when it gave KNWattenberg Transmission the go-ahead to start work on its proposed109-mile Front Runner pipeline project, and gave competitorsWyoming Interstate (WIC) and Colorado Interstate Gas (CIG) thegreen light to carry out the construction of new compression andmetering facilities.

Anyone who thought that the meager 0.1 cent gain the June Nymexcontract turned in on Tuesday would lead to a boring expiration daywas dead wrong. June managed to spew out one more major pricedecline on Wednesday, as the contract went off the board down 7.8cents for the day to settle at $2.017.

The recent tightening of Henry Hub-New York basis can beattributed to a number of factors: the large amounts of capacitybeing turned back to the pipelines, high inventory levels,competitive residual fuel oil prices and new liquefied natural gasprojects, according to a prominent energy trader.

The March Nymex contract turned in another heavily tradedsession on Tuesday, but once again, volatility was virtuallynon-existent. Although the spot month managed a 3.7 cent gain to$2.216, the contract was held to a relatively tight 5.5 centtrading band. Not even the expiration of options yesterday couldpersuade traders to push March out of its recent rigid tradinglimits.