The Energy Law Blog : Energy Lawyer & Attorney : Liskow & Lewis Law Firm : Gulf Coast, Offshore

The Energy Information Agency reported as follows in its September 13, 2007, report:

Since Wednesday, September 5, natural gas spot prices increased as tropical storms threatened to disrupt supplies and pipeline explosions in Mexico stirred concerns of supply security.  Crude oil recorded yet another record high, increasing over $4 per barrel to nearly $80.

Predictions for LNG markets continue to be mixed.  LNG Week in Review quotes an analysis that predicts that, as warm weather has abated across the United States, LNG import volumes have declined and predicts that gas prices will favor European destinations for LNG until next spring.  Platts LNG Daily quotes another that global LNG supplies will grow by 25% in 2008, spurring a 40% increase of LNG imports to the United States.  Platts also quotes other predictions, however, that emphasizes start-up delays and lag time before U.S. projects meet full output capacity.

The EIA also reports that:

• Storage overview.  Several pipeline companies have issued restriction notices to interruptible storage service (ISS) customers.
• Northwest Pipeline Corporation asked shippers to keep their nominations at or below 440,000 Dth at the Meacham compressor station.

Southern Natural Gas Company announced that the 20-inch Gate 6 Toca Loop line in Louisiana is out of service, and the company anticipates that it will return to service at the end of October. Furthermore, the 20-inch Main Pass Franklinton line, also located in Louisiana, was expected to return to service by September 18.  As a result of the outage on the Franklinton line, the Bayou Gentilly and Delacroix points in Louisiana also will remain out of service for the same duration.

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Since Wednesday, August 29, natural gas spot prices increased in most markets (exceptions were Florida and Rocky Mountain region).  Crude oil was up over $2 per barrel.

Predictions of an underuse of an LNG regasification capacity continue.  One report is that if the 22 LNG terminals that have been approved for construction are built, their combined regasification capacity could reach 349 Bcm/y.  (If US LNG consumption grows 6% annually, consumption will total 46 Bcm/y by 2020.)

The EIA also reports that:

-  Florida Gas Transmission Company (FGT) issued an Overage Alert Day for September 5 with a 25 percent tolerance level as a result of high temperatures in its service territory.  FGT announced that it would not interrupt previously scheduled market area interruptible transportation service below the elapsed-prorated-scheduled quantity.  Furthermore, on September 5, FGT announced maintenance work beginning on September 6, which is expected to last until September 8.  The unscheduled maintenance is on the larger of the two units located in Mississippi at Tennessee Carnes Interconnect, upstream of FGT Compressor Station.  Because of the maintenance, FGT announced that during the outage the company will schedule up to about 950,000 MMBtu/day, whereas, normally, the company would schedule up to 1,150,000 MMBtu/day.

-   Colorado Interstate Gas Company announced on August 30 that it is undertaking maintenance at the Beaver Compressor station located south of Springfield, Colorado. One unit at the station will be out of service from September 6 to 30.  Capacity will be reduced to 250 MMcf/d from 262 MMcf/d. 

-   El Paso Natural Gas Company announced on September 1 that there was potential for high linepack conditions on its system.  The Washington Ranch storage facility located in Eddy County, New Mexico, is currently on maximum capacity for injection.  Furthermore, the company announced a strained operating condition warning, which was cancelled on September 3.

-   Transco Gas Pipeline Corporation released a notice on September 4 regarding firm backhaul transportation service for winter 2007-2008.  During September 4 to 11, Transco will be considering requests for firm backhaul transportation service for up to 200,000 decatherms per day (Dth/d) with a primary path from the Northeast, Station 210 in Zone 6 to Northeastern Louisiana, station 65 in zone 3.  The service period will be from October 1, 2007, through April 30, 2008.

From the EIA

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