Daily GPI

Similar to other recent forays above the $3.00 mark, Wednesday’s price surge in the natural gas pit at Nymex was short-lived as locals and speculative accounts liquidated new longs and reinitiated short positions. After topping out at $3.04 at 10:15 a.m. EDT, the September contract shuffled lower throughout the session, ending down 6.5 cents at $2.91. Estimated volume was moderate, with 93,329 contracts changing hands.

The current crisis in the energy trading market largely will have blown over by the time 2003 rolls around, predicted John Olson Wednesday. He is probably best known as the industry analyst who suspected something was rotten in the state of Enron well before anyone else, earning himself an unfavorable reputation in the Enron executive suite prior to the company’s collapse.

In a blistering attack on another energy company on Wednesday, Apache Corp. Chairman Raymond Plank called The Williams Companies an “Enron Clone” that used monopoly power to manipulate Gulf Coast gathering rates levied on producers.

Enron Corp.’s relationships with El Paso Electric, Avista Corp. and affiliate Portland General Electric were so cozy that it was impossible at times to distinguish who was calling the shots at the companies’ energy trading desks, according to the FERC staff report on the status of the agency’s probe into energy price manipulation and trading irregularities.

Despite being the target of multiple federal investigations into potential trading irregularities, the majority of energy companies reported Wednesday that they certified the accuracy of financial information contained in their second-quarter 10-Q filings and their annual 10-K filings for 2001 in compliance with the Securities and Exchange Commission (SEC) regulations.

Embattled Nicor Inc. said Wednesday the Securities and Exchange Commission (SEC) has opened an informal inquiry into the accounting practices of its retail joint venture with Dynegy Inc. and a natural gas supply cost plan that already is under investigation by Illinois regulators.

Kern River Gas Transmission officially kicked off construction on its $1.2 billion, 900 MMcf/d 2003 expansion project, which received a final certificate from FERC on July 17 (see Daily GPI, July 18). The project will more than double Kern River’s current transportation capacity, providing much needed market access for burgeoning gas supplies coming from supply basins in the northern Rocky Mountain region.

Zeus Development Corp. said Tuesday that after extensive research it has concluded that compressed natural gas (CNG) ocean transport is competitive with liquefied natural gas (LNG) and subsea pipelines for gas reserves containing 0.3 to 3 Tcf and located 300 to 1,500 nautical miles from market. The Houston-based independent energy research firm said conclusions were drawn from analysis conducted during a joint industry project by18 companies completed earlier this month.

Natural gas prices just aren’t what they used to be, according to Denver-based Western Gas Resources Inc., which reported net income for the second quarter down, despite a dramatic increase in production.