|
|
Enron Mail |
FYI.
---------------------- Forwarded by Rebecca W Cantrell/HOU/ECT on 05/25/2001 09:46 AM --------------------------- "Tracey Bradley" <tbradley@bracepatt.com< on 05/25/2001 08:36:47 AM To: <Jeff.Lam@BCHydro.bc.ca<, "Aryeh Fishman" <afishman@bracepatt.com<, "Andrea Settanni" <asettanni@bracepatt.com<, "Charles Ingebretson" <cingebretson@bracepatt.com<, "Charles Shoneman" <cshoneman@bracepatt.com<, "Deanna King" <dking@bracepatt.com<, "Dan Watkiss" <dwatkiss@bracepatt.com<, "Gene Godley" <ggodley@bracepatt.com<, "Kimberly Curry" <kcurry@bracepatt.com<, "Michael Pate" <mpate@bracepatt.com<, "Marc F. Racicot" <mracicot@bracepatt.com<, "Neil Giles" <ngiles@bracepatt.com<, "Paul Fox" <pfox@bracepatt.com<, "Ronald Carroll" <rcarroll@bracepatt.com<, "Randall Rich" <rrich@bracepatt.com<, "Scott Segal" <ssegal@bracepatt.com<, <agold@coral-energy.com<, <mdpalmer@coral-energy.com<, <rreilley@coral-energy.com<, <ccopat@e-z.net<, <susan.ginsberg@elpaso.com<, <joe.hartsoe@enron.com<, <Rebecca.W.Cantrell@enron.com<, <smara@enron.com<, <bkostiner@exchange.ml.com<, <Jlimone@exchange.ml.com<, <pat.cradock@huskyenergy.ca<, <kmagruder@newpower.com<, <doug.little@powerex.com<, <sheena.macdonald@powerex.com<, <jwade@sidrichgas.com<, <jcardell@tca-us.com<, <tabors@tca-us.com< cc: Subject: Reuters -- FERC told Calif natgas to reach limit this summer FYI Thursday May 24, 4:11 pm Eastern Time FERC told Calif natgas to reach limit this summer By Julie Vorman WASHINGTON, May 24 (Reuters) - Natural gas supplies will be stretched to the limit this summer in California, but demand will ease during the next four years as utilities become more efficient and hydropower supplies resume, a state regulator told the Federal Energy Regulatory Commission Thursday. FERC staff held a technical conference to gather information about California's natural gas demand outlook from state officials, intrastate pipelines, interstate pipelines, marketers and others. A spike in wholesale electricity prices in the nation's most populous state has been blamed partly on a bottleneck in natural gas pipelines. Many of California's electricity generation plants are fueled with natural gas. Bill Wood, the chief natural gas forecaster for the California Energy Commission, said demand would be about 6.9 billion cubic feet (bcf) per day this year. That compares with 6.7 bcf per day last year and 5.5 bcf in 1995, he said. The state's thirst for natural gas will fall slightly in 2002 and remain flat for four years as utilities become more efficient at squeezing electricity out of gas, he said. Hydropower imported from the Pacific Northwest should also return to normal levels after this year's drought and displace some of the gas now being used, Wood told the conference. NATGAS STRANDED AT BORDER Forecast demand of 6.9 bcf this year means interstate pipelines bringing natural gas supplies into California will be pushed to their limit. The interstate pipelines feeding the state with gas from the Rocky Mountains, New Mexico and other out-of-state fields have a capacity of 7 bcf per day, Wood said. But California's intrastate pipelines that pick up the gas can receive a maximum of 6.7 bcf per day, leaving 3 million cubic feet of gas ``stranded at the border,'' he said. Wood and other officials said Sempra Energy's (NYSE:SRE - news) Southern California Gas Co, which serves San Diego and the southern portion of the state, had especially tight supplies. Lad Lorenz, director of SoCal Gas capacity and operations, told the FERC conference the company had ``adequate'' transmission capacity for its customers. Although the lack of hydropower imports from the Northwest has increased gas demand by 600 million cubic feet per day on SoCal Gas' system, the firm still has enough capacity to handle it, he said. ``We don't anticipate any problems meeting electricity generation demand this summer,'' Lorenz said. ``We don't project any curtailments.'' To help cope with this summer's tightness, SoCal Gas is awaiting state approval of its plan to add capacity of more than 50 million cubic feet per day by salvaging its Montebellow storage field, Lorenz said. It also plans to convert about 14 bcf of ``cushion'' gas -- which is used to maintain adequate pressure in a storage facility -- into working gas. The company also has up to 200 million cubic feet per day of interruptible capacity, he said. SoCal Gas is spending $55 million on four projects to expand capacity by a total of 475 million cubic feet of firm backbone transmission capacity to its system, he said. The projects should be completed by year-end, if they received quick environmental approvals. INTERSTATE PIPELINES HURRY TO EXPAND Interstate pipelines said they were planning ways to get more natural gas to the California border, through upgraded compression equipment and brand-new pipelines. El Paso Pipeline is planning to convert the All-America oil pipeline to natural gas, said Patricia Shelton, president of El Paso's western pipeline group. That line, which was recently approved by FERC, will ship about 230 million cubic feet per day of natural gas from Texas to the California border by autumn. ``We're doing this on our dime to loosen up our system,'' Shelton said. A major new interstate line, the Sonoran Pipeline, has been proposed in a joint venture by Calpine Corp and Kinder Morgan. The 1,000-mile pipeline would ship 1.5 billion cubic feet of gas each day from Blanco, New Mexico to the San Francisco Bay area. The companies are trying to get 20-year contract commitments from customers to determine if the nearly $2 billion pipeline is economically feasible, said Craig Chancellor of Calpine. Kern River Gas Transmission, a unit of the Williams Cos (NYSE:WMB - news) , is planning an expansion of its interstate pipeline to add 906 million cubic feet per day of gas. The project, due to be completed by May 2003, will cost more than $1 billion, said Kirk Morgan, director of business development for Kern River Gas Transmission. Kern River also plans a temporary expansion of its pipeline to add 135 million cubic feet of capacity. The extra capacity will be available in July through next year, due to air quality restrictions. FERC's three commissioners, who are wrestling with other California power issues, did not attend the technical conference.
|