Winter

The cash market ignored the preview of winter that was expectedto permeate nearly all U.S. weather over the weekend, insteadfocusing on another dime-plus screen dive and the fact that thechill is likely to be short-lived and was displacing cooling loadin the South. The result was widely varied price drops betweenabout a nickel and nearly 50 cents Friday.

AGL Resources Inc. has closed on its $533 million acquisition ofVirginia Natural Gas, more than two months ahead of schedule andprior to the start of the winter heating season.

With focus shifting to natural gas prices and supplyavailability this fall and winter, a proposed conversion of the old16-inch-diameter Four Corners oil pipeline to natural gas has runinto a stalemate over a Southern California Gas Co. tariff thatallegedly inhibits the new pipeline from signing up industrialloads in the southern half of the state.

With focus shifting to natural gas prices and supplyavailability this fall and winter, a proposed conversion of the old16-inch-diameter Four Corners oil pipeline to natural gas has runinto a stalemate over a Southern California Gas Co. tariff thatallegedly inhibits the new pipeline from signing up industrialloads in the southern half of the state.

Union Gas Ltd. has declared an open season for peak storage at its Dawn market hub, with injections beginning Aug. 24, and winter 2000-2001withdrawal on an interruptible basis. Union is offering a storage service option that includes unlimited free cycling and a service option for two-or-three year storage.

Union Gas Ltd. has declared an open season for peak storage atits Dawn market hub, with injections beginning Aug. 24, and winter2000-2001withdrawal on an interruptible basis.Union is offering astorage service option that includes unlimited free cycling and aservice option for two-or-three year storage.

Led by heavy buying interest in winter months, natural gasfutures continued to defy gravity yesterday as traders bid themarket up for the seventh straight session. June finished up 5.2cents at $3.448, but the real story was the Nov-Mar. strip, whichnotched an impressive 7.3-cent gain to close at $3.613.

Iroquois extended through Friday an open season for up to 10,000Dth/d of winter-only (December through March) FT from theWaddington receipt point to the Brookfield delivery point. Theservice would commence Dec. 1, 2000 and end April 1, 2003. Iroquoisnoted that Sithe New Boston has right of first refusal for 10,000Dth/d. Call Robin Almond at (203) 925-7274 for information.

Taking into account strong gas futures prices despite thewarmest winter on record, a bleak supply picture and projections ofa very hot summer, PaineWebber reported an increase in its year2000 projection of composite spot gas prices from $2.40/MMBtu to$2.50/MMBtu. The firm’s report, issued yesterday, also indicatedthat the time is right to invest in diversified energy companies.