West

While still holding out the carrot of a possible 40-well, 3 Tcf natural gas play in the agricultural fields west of the central California valley town of Delano, Tri-Valley Corp. of Bakersfield announced Wednesday that it has a letter of intent to sign a deal with an unnamed, privately held international energy company that wants to develop the prospective gas field in conjunction with building a baseload merchant electric generating plant. Tri-Valley called the field its Sunrise Natural Gas Project.

The Wyoming Interstate Co. system west of Rawlins will be shut down for 16 hours Aug. 14 to upgrade the pipeline to meet new class code requirements. The Overthrust, Questar-WIC, Red Sand, Wapiti and Lost Creek points must be shut in for the duration of the work. A reduced capacity schedule will be coordinated with affected parties for that day, WIC said. Throughout August, the new Medicine Bow Loop will be connected at various locations to the existing Medicine Bow Lateral. No impact to service is anticipated except when Cheyenne Compressor Station is removed from service for one day for construction work, cutting lateral capacity to about 400 MMcf for the day.

Eastern prices ranged from flat to down as much as a quarter Monday, with most points registering declines between a nickel and about 15 cents. But western markets tended to rebound strongly as hot weather and higher power prices gave a boost to gas.

In an effort to assist the Northwest meet its needs during the current energy shortage out West, the Bonneville Power Administration plans to establish a short-term policy that will encourage the immediate addition of electricity generation to help the region until planned long-term generation can be built. While the BPA will not fund construction of the generators nor buy the output, BPA said that the policy complements the load reduction strategy it has with its customers. In addition, BPA noted that customers who reduce their load on BPA by 10% would be allowed to use temporary small generators to supply a small portion of their needs. The agency has asked its customers to reduce their demands on BPA so that it can avoid expensive large power purchases in the wholesale market. Such purchases could lead to a triple-digit wholesale rate increase this October, according to BPA (see Daily GPI, April 11). The temporary policy would run from June 1, 2001 through Sept. 30, 2002. But the BPA said that before it implements the policy next month, it wants to hear from the public on the details of the plan. A public meeting on BPA’s proposed policy is scheduled for May 24 at BPA headquarters in Portland, OR.

A shroud of desperation enveloped California officials Monday, stretching from the state Capitol in Sacramento, west to San Francisco, and south to Los Angeles as regulators and a federal bankruptcy judge wrestled with the state’s electricity crisis, but with no indication of when and how the battle will end.

The week’s market activity came to a quiet close Friday with prices at most eastern points and Permian/Waha hovering on either side of flat, but with a slight bias to the upside. Western markets were generally softer, with California once again way out in front, leading a downhill charge.

The frenzied pace of pipeline expansion in the West clearly is not over yet. PG&E Gas Transmission Northwest (GTN) is planning another major expansion, potentially 500 MMcf/d, with a targeted in-service date of November 2003.

The frenzied pace of pipeline expansion in the West clearly is not over yet. PG&E Gas Transmission Northwest (GTN) is planning another major expansion, potentially 500 MMcf/d, with a targeted in-service date of November 2003.

Pockets of firmness in the West went against the grain of overall price declines ranging from about a nickel to 15 cents elsewhere Wednesday. Most of the declines were around a dime.