NGI The Weekly Gas Market Report

Sen. Maria Cantwell (D-WA), in a recent letter to FERC Chief Administrative Law Judge Curtis L. Wagner, argued that any refund policy adopted by the Commission must not disadvantage utilities in the Pacific Northwest because of the contractual mechanisms that they have used to acquire power to serve their customers. She also asserted that Northwest entities that have been hurt by California’s energy crisis should be eligible for refunds.

Canadians are being assured by their two biggest natural gas transporters that they don’t have to take sides in the contest over the northern pipelines because they stand to gain no matter which project wins. After carrying an estimated C$40 billion worth (US$27 billion) of exports to the United States in the past 20 years, the “prebuild” of the Alaska pipeline, completed by Foothills Pipe Lines Ltd., predicts that far from losing, Canadians stand to gain if the country can build the missing northern link in the Alaska Natural Gas Transportation System (ANGTS).

The Senate last week overwhelmingly voted to retain a controversial oil and natural gas lease sale in the eastern Gulf of Mexico scheduled for December, pushing back attempts by the Florida delegation to delay it until next year, as part of a major energy spending bill. Interior Department’s Minerals Management Service (MMS) last week tentatively scheduled the lease sale for Dec. 5 in New Orleans.

PanCanadian Petroleum said it has taken another step toward developing its Deep Panuke natural gas field offshore Nova Scotia by awarding a contract for the front-end engineering design (Feed) study for the project to the ACCENT-Saipem Energy Joint Venture. “Starting the Feed study is a very important milestone as we move towards production at Deep Panuke. The study will include the preliminary design of process equipment, structures and pipelines, and will enable us to determine optimum development plans,” said Larry LeBlanc, PanCanadian’s vice president East Coast operations. “It will also allow us to achieve accurate cost estimates and will provide a project definition suitable for soliciting bids for the detailed design, construction and installation phase of the project.” Deep Panuke is located 155 miles southeast of Halifax. Since 1999, PanCanadian has drilled four wells in the field, each of which tested at rates in excess of 50 MMcf/d. PanCanadian has a 100% interest in the Deep Panuke development. The company plans to file a development plan application for the prospect with the Canada-Nova Scotia Offshore Petroleum Board in the fourth quarter of 2001.

Michigan Attorney General Jennifer M. Granholm announced last week that her office reached a major settlement with Consumers Energy Co. (CECo) that is expected to save the company’s natural gas customers $190 million over the next nine months.

Houston-based energy marketer Dynegy Inc. is joining an impressive list of companies poised to build U.S.-based liquefied natural gas (LNG) facilities, announcing Thursday it will construct a plant at its existing liquefied petroleum gas terminal site in Hackberry, LA. Because the Gulf Coast site is already developed, the facility could be operational two to three years sooner than a greenfield project, with the first phase of commercial operation set for the end of 2003.

As the Colorado Public Utilities Commission (PUC) considers whether to overhaul or eliminate its integrated resource planning (IRP) requirements for electric utilities in the state, the state commission is being urged to create a process that does not limit the resource options of utilities, while also allowing the PUC to continue its support of demand-side programs, among other things.

While there are “ample” natural gas reserves throughout North America, the cost of developing “frontier” projects is substantially greater than importing additional quantities of liquefied natural gas (LNG) from Trinidad, South America, Africa, the Middle East and Australia, the Zeus Development Corp. said following a symposium on the subject.

Warning that “the impacts of the current energy crisis are just now beginning to be felt in places all across the country,” House Resources Committee Chairman James V. Hansen, R-UT, opened hearings last Wednesday on energy legislation (H.R. 2436) that centers on tapping between five and ten billion barrels of oil from the Arctic Natural Wildlife Refuge (ANWR).