Daily GPI

FERC at its Wednesday meeting issued Kern River a certificate to build its long-awaited 2003 expansion project, which would more than double the existing capacity of the Wyoming-to-California pipeline. The move opens the door for the construction of a huge new conduit for nearly 900 MMcf/d of additional natural gas to exit the Rocky Mountain region and head to the flood of new power plants in Nevada and California starting next May.

A moderate amount of strength in the Rockies was the major exception Wednesday to a generally mixed bag of prices. Non-Rockies numbers were mostly flat but also ranged up to about a nickel higher or lower in some cases. Transco Zone 6-NYC took the only big fall of a little more than 50 cents.

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.