NGI The Weekly Gas Market Report

As a result of KN Energy’s acquisition of MidCon Corp. in lateJanuary, mc² said it plans to turn its focus to retail natural gasand electric markets in western states in which its new parent doesa lot of trading.

Six companies are getting behind a gas liquids pipeline fromAlabama and Mississippi to Louisiana fractionators. They’ve agreedto form Tri-States NGL Pipeline to build the pipeline from Alabamaand Mississippi to Louisiana fractionators. The line will linkthree processing plants under construction to new and expandedfractionators on the Mississippi River.

Against a backdrop of enthusiastic support from producers, Rep.William M. “Mac” Thornberry (R-TX) last week introduced the firstpiece of legislation aimed at “completely overhauling the currentsystem” used by the federal government to collect royalties on oiland natural gas produced on federal land.

Union Pacific Resources Group (UPR) last week closed on the $2.6billion acquisition of Norcen Energy Resources, greatly increasingits production foothold in Western Canada, Latin America and theGulf of Mexico, including some deep-water prospects.

The Independent Petroleum Association of America (IPAA) broughta lawsuit in federal court in Washington D.C. last week challengingthe validity of a new regulation that bars producers from deductingthe full cost of transporting natural gas to the marketplace.

One-call pipeline safety legislation moved much closer tobecoming law last week as the Senate voted to add it to omnibustransportation legislation and in the House representatives RichardHugh Baker (R-LA) and Frank Pallone (D-NJ) introduced a bill thatis nearly identical to the one-call legislation already passed bythe Senate.

Recent estimates of natural gas consumption by the EnergyInformation Administration seem to confirm that weather is notalways the determining factor when it comes to energy use. The gasindustry might want to thank God for that. EIA shows consumption isup in the face of much warmer temperatures and much fewer heatingdegree days this winter.

Consolidated Edison announced last week it plans to selltwo-thirds of its New York City dual fuel-fired electric generationplants (5,500 MW) in an auction starting this summer as part of itsongoing electric restructuring plan, which was signed lastSeptember. About 5,050 MW of its total generating capacity isnatural gas- and fuel oil-fired. The rest burns kerosene.

A look at domestic gas production and reserve replacementfigures for eight producers, large and small, gives a mixed bag ofgood and bad news on the supply front.