Northwest said it would not issue an Operational Flow Order fortoday’s gas day even though repairs to Unit #1 at the Snohomish(WA) Compressor Station were continuing Wednesday. The pipelineexpected to complete the work by Wednesday night, but said an OFOstill might be possible should the maintenance continue throughtoday. Northwest credited cool weather and customer cooperation onbalancing with allowing it to meet demand for Sumas/SIPI gas overthe weekend. But with warming weather and continued high demand itis having difficulty meeting Primary Firm nominations without theSnohomish #1 unit
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Early May Price Rally Falters
May cash prices made a stab at climbing a little higherWednesday, and indeed, one trader said he was “still struggling” tobuy Sonat gas with offers in the low $2.30s. But other sources,while agreeing there was an early push for higher prices, said thenumbers were starting to soften again in the afternoon. “Everybodywent to lunch and then things fell apart,” as a marketer put it.
Storage Data May Push June Futures Lower
The June Nymex contract made its debut as the spot month byslipping 1.3 cents to settle $2.298 on Wednesday. Volume wasmoderate, with an estimated 40,133 contracts changing hands.
May Prices Rise a Bit After Expiry, But Will It Last?
It seemed reasonable to expect that with the Henry Hub futuresprice barely budging on its last day of trading, cash numbers forMay wouldn’t be moving much in either direction either, as a coupleof sources said prior to the screen expiry Tuesday. Yet tradersreported prices rising a few cents in several markets in afternoondeals. A marketer whose Chicago citygates were in the low $2.30sMonday submitted quotes in the mid to high $2.30s Tuesday. AndPermian Basin gas traded at $2.08-09 most of the day but bumped upto $2.11-12 after the screen closed, a producer said.
May Futures Expire Lower, Rest of Strip Higher
After all the volatility surrounding the May Nymex contract oflate, the spot month spent what is typically one of any contract’smost volatile trading days (its expiration) by slipping only 0.4cents to settle Tuesday at $2.262. A trader said late strengthpushed June and the rest of the outmonths up a couple of cents forthe day, and noted May would have expired with a gain, had it notbeen for a fund dumping a large position within the last 30 minutesof trading.
Tetco Offers to Bear Risk for Turned-Back Capacity
Texas Eastern Transmission (Tetco) on Tuesday submitted to FERCan offer of settlement that it insists will save pipeline customersmore than $260 million over the next five to six years.
More Pipeline Audits on the Way in May
FERC said it plans to begin audits of three additionalinterstate pipelines next month as part of its stepped-up effort tocrack down on abuses involving marketing affiliates. The on-siteaudits of Columbia Gas Transmission, Great Lakes Gas TransmissionL.P. and CNG Transmission are expected to get underway around May18, according to a spokeswoman.
EnergyOne Rethinks Strategy Amid Competition Lag
Disappointment with the development of retail gas and powermarket competition nationwide prompted another major player toannounce it is rethinking its plans and redirecting marketingefforts. EnergyOne LLC, the 50-50 marketing alliance of UtiliCorpUnited and Peco Energy, is being restructured in order to implementnew joint strategies tailored to deal with “a competitivemarketplace that refuses to show up,” the partners said yesterday.Their announcement follows by only a week Enron’s statement that itis ceasing residential marketing efforts in several states becausecompetition has been so slow to develop.
BGE Transport Customers Burdened with Sales Tax
Retail gas marketers got some good and bad news from BaltimoreGas & Electric Co. yesterday. The bad news was transportationcustomers have to start paying the state’s 5% sales tax for thefirst time starting in May so alternative suppliers will have amuch tougher time beating the regulated gas sales price. Thecompliance division of the state Controller’s office informed BGEof the tax change in January.
Signs Point to Higher Gas Prices, Producer Says
Four factors will continue to tighten the future domestic gassupply picture, Randy Mundt, executive vice president of marketingfor producer Burlington Resources, said Tuesday at Ziff EnergyGroups’ New Gas Dynamics 2000+ conference in Houston. The twobiggest factors are producers’ difficulty in replacing productionand accelerated decline rates in the Gulf of Mexico. Also, Mundtsaid, Canadian imports are not an immediate threat to domesticproducers, and the current supply-demand scenario is roughly inbalance.