NGI The Weekly Gas Market Report

Responding to FERC’s concerns that key customers may back out of its Greenbrier Pipeline project, Dominion Transmission Inc. reported to the agency Thursday that approximately 90% of the transportation capacity to be created by the proposed natural gas pipeline has been subscribed by power generators and local distribution companies (LDCs), a company spokesman said.

Following on the heels of a hurried state report on natural gas and gasoline winter wholesale price spikes that revealed no alleged gouging or market manipulation, California Gov. Gray Davis last Wednesday formally asked the state’s two principal energy agencies to continue investigating prices for both fuels, which are critical to the state’s economy. Davis ordered follow-up reports every 30 days through the end of the year.

The Interior Department on Wednesday proposed new incentives for energy companies to increase deep natural gas production in the Gulf of Mexico (GOM), which, among other things, would provide royalty suspension incentives for nearly 2,400 existing leases in the area targeted for relief.

UniSource Energy Corp. and Citizens Communications Co. (CCC) said that they have reached an initial agreement with state officials that would clear the way for UniSource Energy’s planned acquisition of Arizona gas and electric system assets from CCC.

In response to the strong interest in siting multiple liquefied natural gas (LNG) terminals along the northern-most Pacific Coast of Baja, Mexico, North Baja Pipeline is holding an open season to solicit shipper interest in a potential expansion of the 220-mile international natural gas transmission pipeline, which runs from the Arizona-California border south and west into Mexico. The open season runs through May 5, 2003.

Upper Midwest combination utility NorthWestern Corp. revealed Tuesday that it will take about $880 million in special charges in 2002, which is $180 million more than previously announced. It expects to post a $900 million net loss for the year compared with net earnings of $37.5 million in 2001.

The staff of the Federal Energy Regulatory Commission has given preliminary environmental clearance to Dynegy’s proposed Hackberry liquefied natural gas (LNG) terminal in Louisiana — the first new LNG terminal scheduled for construction in the United States in 25 years.

Burlington Resources Inc. said last week that it is raising its first quarter production guidance and has resumed repurchasing shares of its common stock under an existing $1 billion repurchase authorization.

Falcon Gas Storage Co. Inc. will hold an open season in April for a new high-deliverability, multi-cycle (HDMC) natural gas storage hub to be located in the southeastern United States. The MoBay Storage Hub in Mobile County, AL, scheduled to be in service by the fourth quarter of 2004, would offer 20 Bcf of working gas capacity along with 450 MMcf/d of injection and withdrawal capability.