After several successive days of stagnation, the cash marketfinally was able to use a little bit of screen support andexpectations of colder weather moving into major market areas toget out of its rut Tuesday. Prices ranged from flat in theSouthwest basins to more than a nickel higher at New Englandcitygates and for intra-Alberta and several related western points.Most quotes rose between 3 and 5 cents.
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Bucking the Trend, Futures Claw Higher
Building on Monday’s gains, natural gas futures inched higheryesterday as bulls received a boost from strength in the nearbycash market. After thwarting an early sell-off, buyers weresuccessful in bidding the February contract up 4.4 cents to closeat $2.26. That made it four for four trading sessions in which theprompt month has posted higher highs and higher lows.
GRI Study: Bullish Despite Changing Landscape
In a new study forecasting gas supply and demand over the next15 years, GRI said demand will reach 32.7 Tcf by 2015, but theindustry will have to adapt to changing consumption patterns inorder to take advantage. The results of the report, titled “GRIBaseline Projection of U.S. Energy Supply and Demand to 2015, 2000Edition,” were released Tuesday at the National Press Club.
Questar Files for New Pipeline in Northern Utah
Questar Pipeline Co. filed an application with FERC this week tobuild a 75.6-mile, 272,000 Dth/d pipeline loop running fromnortheastern Utah to north central Utah. The project, called MainLine (M.L.) No. 104, would cost more than $80.8 million and loop aportion of Questar’s existing M.L. No. 40 and the entirety of M.L.No. 41. It would extend from a coal-seam reserve in the area ofPrice, UT to interconnections with the its own Payson Citygate andalso potentially Kern River. Questar requested the Commission issuean order authorizing construction no later than August.
CMS Sells Part of Powder River Gathering System
As part of an asset sales program, CMS Energy Corp. subsidiaryCMS Field Services sold 49% of its formerly 100% interest in theNorthern Header gathering system to affiliates of Enron Corp. andNorthern Border Partners. CMS, Enron and Northern Border Partnersplan to expand the gathering system, renamed Bighorn Gas GatheringLLC, to serve a broad area of northeastern Wyoming’s Powder RiverBasin. CMS Field Services will retain a majority interest inBighorn and act as project manager.
Chevron, Kerr-McGee Optimistic for 2000
Citing confidence in growth prospects, San Francisco-basedChevron Corp. said it plans to spend $5.2 billion this year. Still,that figure, which includes increased investment in Dynegy Inc., isless than estimated 1999 spending. “We’ll devote the majority ofour capital dollars to developing the high potential of ourextensive worldwide upstream portfolio, including recent propertyacquisitions in Thailand and Argentina,” said CEO Dave O’Reilly.
Unocal Sees Production Rising More Slowly
Unocal Corp. said it expects worldwide average net oil and gasproduction to rise 44% to nearly 700,000 Boe/d by 2004. The updatedoutlook reflects a 7.6% annual growth in net worldwide productionfrom an estimated 485,000 Boe/d in 1999. Net Lower 48 U.S.production is expected to rise 44% to an estimated 237,000 Boe/d in2004.
Analysts See Megawatts Multiplying
Traders sweating out the warm winter and wondering how they’regoing to get rid of surplus storage can take heart from a newanalysts report that sees 27,000 MW of natural gas-fired powergeneration capacity being added in the next 12 months.
Reliant Energy: A Case of Sour Grapes?
Reliant Energy Gas Transmission, whose proposal to supplytransportation services to a mega gas-fired generation project wasrejected, is now rapping that very same power project, insistingthat there’s not enough demand to justify the project or thepipeline option that was selected to supply it with natural gas.
Northern Accused of ‘End-Run’ Around FERC
Shippers on the Northern Natural Gas system called on FERC toreject the pipeline’s latest tariff proposal because they say ittries to pass off index-based rates as “discounted” rates ratherthan negotiated rates.