Deep-water gas from the Gulf of Mexico has begun moving ashore,but without the pressure of a cold winter or the incentive of highprices the gas stream so far has been little more than a trickle.Two projects, Discovery Gas Transmission and Nautilus Pipeline,have begun some deliveries and a third, the extension of DauphinIsland Gathering System (DIGS), is expected to start up this month.
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The Federal Energy Regulatory Commission gave the go-ahead lastweek for two New England Electric System (NEES) utility companiesto sell their fossil fuel and hydro generation business to USGenNew England Inc. (USGen), a subsidiary of PG&E Corp.
Prices for the last day of February were mostly softer Friday,but quotes for the Southwest basins, Rockies and intra-Albertareflected flatness. And Canadian exports into Northwest at Sumas,which had been languishing in the low to mid $1.10s at the start ofthe week, climbed to the $1.30 area. The big exception to Westernfirmness was a fall of about a dime at the Southern Californiaborder in wide-ranging numbers.
Electricity buyers with multiple facilities are eager toconsolidate power buying activities from myriad suppliers to just ahandful when competition comes, according to a recent survey.
After a pause for consideration by one potential taker,TransCanada PipeLines, Canada’s second-biggest pool of natural gassupplies is again looking for new owners. Pan-Alberta Gas’president, Ross Weaver, confirmed, “we are still for sale.”
The April Nymex contract gained 3.7 cents to settle Friday at$2.321, thanks to what one broker called strong fund buying.However, April may be hard pressed to add much more to that.According to the latest Commitments of Traders report,non-commercials extended their net long position by 7,649 contractsto 9,543 during the last two weeks. The broker estimates that 60%of those positions are in April, which would mean these speculatorswould have to wind out of approximately 5,700 April contractswithin the next four weeks. However, if April breaks out of itsrecent technical trading range within the next several days, it islikely funds will add to their overall long position, meaning moreselling pressure would mount on April and May as we approach theApril expiration, a source argued.
The American Gas Association’s “shrewd” new President and CEODavid N. Parker has discovered a period of calm, but continuedstreamlining is the best thing right now to keep AGA in goodstanding with its members. In an interview with NGI last week,Parker said he has made a commitment to the AGA board to furtherreduce expenses and hold down membership dues.
Nova Gas Transmission continues to handle about 80% (4.5 Tcf in1997, or 12.3 Bcf/d) of Canadian gas on its provincial gatheringgrid because Alberta remains both the biggest producer and centerof growth in output. But expectations of serious growth in BritishColumbia showed clearly when the National Energy Board visited theprovince’s resource development frontier of Fort St. John forregional hearings on the Alliance Pipeline Project.
Prices continued to rise Thursday in trading for both lateFebruary and March. It was mostly a response to the screen’sbelated run-up Wednesday, sources said, but there was enoughblizzard-like weather spreading out from the Upper Plains region togive prices a little extra boost.
The April Nymex contract got off to a fast start Thursday byopening at $2.32 and quickly moving to $2.34. However, strongtechnical selling kicked in at that point, so much so that Aprilslid back to settle the day down 3.4 cents at $2.284.