NGI The Weekly Gas Market Report

Williams’ Transcontinental Gas Pipeline (Transco) said Thursday that it has placed the first phase of its $189 million Momentum pipeline expansion into service, increasing capacity on its natural gas system by approximately 269,000 Dth/d.

Flying low under the normal local media and environmental radar screens, Japanese mega-conglomerate Mitsubishi is pushing ahead with preliminary plans for building a liquefied natural gas (LNG) receiving terminal along the Southern California coast in Long Beach Harbor on part of a former U.S. Naval Base. A local official connected to the Japanese giant said it is only a few months away from making formal federal energy and environmental filings.

Florida Gas Transmission Co. (FGT) completed the final stage of its $452 million Phase V expansion project late last week. The Citrus Corp. subsidiary said the entire Phase V expansion project provides 428 MMcf/d of incremental firm gas transportation service for its expansion customers, mainly power generators.

NiSource Inc. last week said cold weather and an asset sale offset the negative effects of a rate review settlement, accounting rule change and higher pension expense during the first quarter, resulting in a 5% hike in net income for the period from a year ago.

Most of the largest U.S. and global producers released first quarter earnings last week, reporting stupendous income almost across the board. However, according to preliminary estimates from Lehman Brothers, U.S. production rose only about 1.3% sequentially and decreased 2.5% from year-ago levels. Canadian production also appears to be down 2.1% sequentially and 2.5% from 1Q02.

NUI Corp. reported higher earnings from continuing operations for both the most recent six month period and the most recent quarter (NUI’s second quarter in fiscal 2003), but the company announced its intention to exit the retail energy marketing business.

Over the next dozen years natural gas prices will average $3.50-60, given $22-$28/bbl oil, according to a base case scenario developed by the New York-based PIRA Energy Group as part of its just-released, in-depth study of the global oil and regional natural gas markets.

Trinidad and Tobago’s Atlantic LNG completed its third liquefaction train, a 3.3 billion cubic meter/year facility that brings plant capacity to 12.8 Bcm/year (453 Bcf/year or about 1.2 Bcf/d). The addition of the third train marks the completion of a US$1.1 billion expansion that started in the first quarter of 2000. The first phase of that expansion, Train 2, was completed on Aug. 12, 2002.

Price spikes for North American natural gas could continue if the exploration and production (E&P) industry does not increase drilling activity, Standard & Poor’s Ratings Services (S&P) said in its latest Oil & Gas Report Card.