[platts] gas daily - 2-sept-2010

Gas Dailywww.platts.com

Thursday, September 2, 2010

The McGraw-Hill Companies

Daily price survey ($/MMBtu)

NATIONAL AVERAGE PRICE: 3.720

Trans. date: 9/01 Flow date(s): 9/02

Midpoint +/- Absolute Common Volume Deals

Permian Basin Area El Paso, Permian 3.475 +0.090 3.40-3.59 3.43-3.52 629 81Waha 3.565 +0.090 3.45-3.75 3.49-3.64 743 104Transwestern, Permian 3.385 +0.075 3.38-3.41 3.38-3.39 13 3

East Texas-North Louisiana Area Carthage Hub 3.640 +0.025 3.55-3.80 3.58-3.70 196 35NGPL, Texok zone 3.665 +0.010 3.59-3.80 3.61-3.72 790 111Tx. Eastern, ETX 3.655 -0.030 3.60-3.72 3.63-3.69 52 16Tx. Gas, zone 1 3.715 -0.010 3.64-3.86 3.66-3.77 380 63

East-Houston-Katy Houston Ship Channel 3.745 -0.050 3.70-3.93 3.70-3.80 865 115Katy 3.740 -0.015 3.69-3.85 3.70-3.78 1078 151

South-Corpus Christi Agua Dulce Hub 3.700 -0.090 3.70-3.70 3.70-3.70 10 2NGPL, STX 3.715 -0.005 3.69-3.76 3.70-3.73 123 17Tennessee, zone 0 3.695 -0.050 3.65-3.85 3.65-3.75 309 59Tx. Eastern, STX 3.740 +0.040 3.65-3.83 3.70-3.79 59 13Transco, zone 1 3.720 -0.060 3.68-3.82 3.69-3.76 178 33

Louisiana-Onshore South ANR, La. 3.745 -0.005 3.67-3.86 3.70-3.79 562 101Columbia Gulf, La. 3.740 +0.000 3.65-3.90 3.68-3.80 250 35Columbia Gulf, mainline 3.710 -0.025 3.65-3.87 3.66-3.77 850 123Florida Gas, zone 1 3.830 +0.045 3.69-3.92 3.77-3.89 37 9Florida Gas, zone 2 3.800 -0.020 3.73-3.90 3.76-3.84 33 8Florida Gas, zone 3 3.755 -0.055 3.70-3.86 3.72-3.80 205 26Henry Hub 3.730 -0.065 3.69-3.86 3.69-3.77 873 125NGPL, La. 3.730 +0.030 3.73-3.73 3.73-3.73 32 4Southern Natural, La. 3.760 -0.035 3.71-3.88 3.72-3.80 418 58Stingray Pool -- -- ----- ----- -- --Tennessee, 500 Leg 3.740 -0.015 3.64-3.90 3.68-3.81 899 122Tennessee, 800 Leg 3.730 -0.025 3.65-3.87 3.68-3.79 578 95Tx. Eastern, WLA 3.745 -0.005 3.71-3.80 3.72-3.77 117 20Tx. Eastern, ELA 3.735 +0.000 3.69-3.82 3.70-3.77 278 45Tx. Gas, zone SL 3.695 -0.025 3.64-3.86 3.64-3.75 196 39Transco, zone 2 3.715 -0.065 3.70-3.84 3.70-3.75 84 14Transco, zone 3 3.740 -0.045 3.70-3.88 3.70-3.79 727 99Trunkline, WLA 3.690 -0.050 3.67-3.69 3.69-3.69 14 5Trunkline, ELA 3.685 -0.030 3.65-3.69 3.68-3.69 16 7

Oklahoma ANR, Okla. 3.500 +0.020 3.45-3.58 3.47-3.53 57 16CenterPoint, East 3.545 +0.025 3.47-3.68 3.49-3.60 338 57NGPL, Midcontinent 3.525 +0.095 3.44-3.61 3.48-3.57 197 42Oneok, Okla. 3.520 +0.065 3.45-3.57 3.49-3.55 239 46Panhandle, Tx.-Okla. 3.510 +0.135 3.45-3.60 3.47-3.55 281 49Southern Star 3.495 +0.040 3.42-3.58 3.46-3.54 205 26

New Mexico-San Juan Basin El Paso, Bondad 3.325 +0.180 3.18-3.39 3.27-3.38 27 6El Paso, San Juan 3.285 +0.015 3.25-3.49 3.25-3.35 674 99Transwestern, San Juan 3.385 +0.095 3.30-3.54 3.33-3.45 210 33

Rockies CIG, Rockies 3.115 +0.160 3.03-3.25 3.06-3.17 173 28Kern River, Opal 3.110 +0.130 2.95-3.25 3.04-3.19 891 135

NYMEX dips; Earl has Northeast traders on edgeTHE

MARKET

Despite a surging stock market and rallying oil prices, the October NYMEX gas futures contract fell 5.4 cents Wednesday to settle at $3.762/MMBtu. Cash price movements were inconsistent, rising as much as 20

cents in some regions while falling a nickel in others. Phil Flynn, an analyst at PFGBest Futures, said the contract’s pullback

was largely the result of the increasingly popular oil/gas spread, where traders go long oil and short gas. He noted that crude oil prices rose near-

(continued on page 2)

Pipeline sues Oregon for blocking LNG projectThe developer of the proposed Jordan Cove liquefied natural gas

terminal and pipeline is suing Oregon in federal court, claiming state regulators have erected unreasonable barriers during permitting and demonstrated “pervasive opposition” to imported gas.

The Federal Energy Regulatory Commission approved plans in December for a 1 Bcf/d LNG terminal on the southern coast of Oregon and a 230-mile pipeline that would carry the gas to Malin, Oregon, on the California border (GD 12/18).


Houston approves drilling program under parksThe Houston City Council on Wednesday agreed to allow a private

company to drill exploratory oil and gas wells beneath three munici-pal parks and a maintenance center — a potential step toward trans-forming America’s corporate energy hub into an energy-producing center as well.

The council signed off on a three-year lease with Houston-based Southern Star Exploration, which allows the company to drill wells from remote locations that would target gas deposits believed to lie beneath Herman Brown Park, Brock Park and Maxey Park, as well as


Enterprise plans gas, oil network in Eagle FordEnterprise Products Partners on Wednesday said it plans to add a

network of gas and oil pipeline facilities to accommodate growing pro-duction in the Eagle Ford Shale of South Texas.

The projects are linked to long-term agreements with independent producer EOG Resources, for which Enterprise will provide a “com-prehensive package of midstream services” using both existing assets and newly built infrastructure. The company did not provide cost estimates for the pipelines or financial details of the agreements with


Gas Daily ThursDay, sepTember 2, 2010

2 Copyright © 2010 The McGraw-Hill Companies

Stanfield, Ore. 3.420 +0.105 3.37-3.51 3.39-3.46 160 25Questar, Rockies 3.045 +0.175 3.00-3.05 3.03-3.05 4 3Cheyenne Hub 3.225 +0.185 3.15-3.33 3.18-3.27 340 47NW, Wyo. Pool 3.140 +0.130 3.08-3.23 3.10-3.18 84 13NW, s. of Green River 3.190 +0.220 3.05-3.24 3.14-3.24 152 24

Canadian Gas Iroquois, receipts 4.415 +0.020 4.35-4.47 4.39-4.45 204 30Niagara 4.275 +0.055 4.15-4.30 4.24-4.30 91 14NW, Can. bdr. (Sumas) 3.340 +0.135 3.30-3.41 3.31-3.37 437 77TCPL Alberta, AECO-C* C3.185 C+0.075 C3.09-3.29 C3.14-3.24 1670 154Emerson, Viking GL 3.590 +0.080 3.52-3.65 3.56-3.62 324 31Dawn, Ontario 4.250 +0.055 4.19-4.32 4.22-4.28 1326 166GTN, Kingsgate 3.325 +0.090 3.29-3.44 3.29-3.36 314 32Westcoast, station 2* C2.920 C+0.120 C2.89-2.95 C2.91-2.94 176 26

Appalachia Dominion, North Point 3.940 +0.010 3.94-3.94 3.94-3.94 11 1Dominion, South Point 3.960 -0.055 3.92-4.11 3.92-4.01 930 135Leidy Hub 4.145 -0.045 4.08-4.20 4.12-4.18 88 14Columbia Gas, App. 3.825 -0.050 3.79-3.95 3.79-3.87 879 132Lebanon Hub 3.880 -0.030 3.84-4.04 3.84-3.93 411 76REX, Clarington Ohio 3.880 -0.040 3.83-4.05 3.83-3.94 377 49 Tennessee, zone 4-Ohio 3.995 -0.035 3.95-4.10 3.96-4.03 263 43

Mississippi-Alabama Tx. Eastern, M-1 30-in. 3.820 -0.030 3.72-3.95 3.76-3.88 573 102Transco, zone 4 3.755 -0.055 3.72-3.97 3.72-3.82 734 96

Others Algonquin, receipts 4.145 -0.075 4.05-4.27 4.09-4.20 55 8El Paso, South Mainline 3.550 +0.015 3.54-3.61 3.54-3.57 171 14SoCal Gas 3.520 +0.055 3.45-3.63 3.48-3.57 443 49PG&E, South 3.495 +0.035 3.41-3.56 3.46-3.53 303 35PG&E, Malin 3.440 +0.075 3.40-3.53 3.41-3.47 465 53Alliance, into interstates 3.760 -0.035 3.73-3.90 3.73-3.80 261 44ANR, ML 7 3.905 -0.125 3.74-4.05 3.83-3.98 38 7NGPL, Amarillo receipt 3.540 +0.110 3.52-3.58 3.53-3.56 50 10Northern, Ventura 3.710 +0.065 3.70-3.85 3.70-3.75 301 41Northern, demarc 3.725 +0.100 3.69-3.82 3.69-3.76 121 32Dracut, Mass. 4.160 +0.010 4.16-4.16 4.16-4.16 1 1Tx. Eastern, M-1 24-in. 3.735 -0.030 3.67-3.84 3.69-3.78 120 16Northern Bdr., Ventura TP 3.705 +0.060 3.70-3.74 3.70-3.72 76 13Trunkline, zone 1A 3.690 -0.040 3.68-3.77 3.68-3.71 95 19

Citygates Chicago city-gates 3.765 -0.045 3.72-3.92 3.72-3.82 1346 196Consumers city-gate 3.845 -0.010 3.80-3.95 3.81-3.88 117 29Mich Con city-gate 3.975 -0.010 3.94-4.07 3.94-4.01 774 123PG&E city-gate 3.705 +0.100 3.63-3.86 3.65-3.76 1209 159Florida city-gates 4.495 +0.130 4.35-4.75 4.40-4.60 164 17Algonquin, city-gates 4.360 +0.005 4.20-4.50 4.29-4.44 396 62Tennessee, zone 6 del. 4.290 -0.030 4.19-4.38 4.24-4.34 437 81Iroquois, zone 2 4.425 +0.005 4.39-4.47 4.41-4.45 232 31Tx. Eastern, M-3 4.195 -0.060 4.09-4.31 4.14-4.25 816 164Transco, zone 5 del. 3.965 -0.075 3.92-4.06 3.93-4.00 275 21Transco, zone 6 non-N.Y. 4.185 -0.040 4.12-4.25 4.15-4.22 320 47Transco, zone 6 N.Y. 4.225 -0.040 4.15-4.35 4.18-4.28 775 108Kern River, delivered 3.525 +0.055 3.48-3.56 3.51-3.55 305 42SoCal Gas, city-gate 3.495 +0.005 3.45-3.60 3.46-3.53 835 92

*NOTE: Price in C$ per gj; C$1=US$0.9527

Volume in 000 MMBtu/day

Daily price survey ($/MMBtu)Trans. date: 9/01 Flow date(s): 9/02

Midpoint +/- Absolute Common Volume Deals

Earl has traders on edge ... from page 1

ly $2/barrel following positive Chinese and US manufacturing reports. “We’ve seen it a lot of times when oil makes an unexpected move

like it did [Wednesday,] natural gas has a tendency to suffer,” he said. “They often use gas as a hedge against more aggressive feel-good posi-tions” such as oil.

Additionally, the gas market is going into the shoulder season, and September can be “a very scary month for natural gas bulls,” Flynn said.

Stephen Schork, president of the Schork Group, said the contract is consolidating in a tight trading range. “The bears have had a nice run and now it looks like the market is about to bottom,” he said. “The bears have had their fun and now it’s the bulls’ turn.”

In the Northwest spot market, prices tacked on more than 20 cents at some points despite little movement in the NYMEX and mild weather in the region. However, unusually hot weather in California has boosted demand there, providing Rockies prices a boost as supplies are shipped west.

At Northwest Pipeline’s south of Green River station, cash prices jumped more than 20 cents to average just under $3.20. Trades were seen in a wide range of about 20 cents, with prices start-ing off low and then strengthening throughout the session on IntercontinentalExchange.

Northwest’s Wyoming pool and the Cheyenne Hub picked up more than 15 cents each, as did Colorado Interstate Gas, despite constraints on its system. CIG operator El Paso declared a strained operating condi-tion due to storage inventories being at unusually high levels. The notice went into effect Wednesday and will continue until further notice.

At the US-Canada border, Kingsgate prices climbed almost 10 cents to average in the low $3.30s. Western Canadian markets followed a similar path. “Everything popped up, but it’s still pretty cheap,” a regional trader said, noting that Westcoast Energy’s station 2 gas was trading below C$3/Gigajoule.

Sable production platform in hurricane’s projected pathSouthwest and West Coast prices climbed as much as 10 cents

as forecasts called for hot weather through the rest of the week. The Pacific Gas & Electric city-gate climbed 10 cents to average in the low $3.70s, and for the second consecutive day volumes at the point topped the 1-Bcf mark. “We’ve got some A/C load that’s playing out over the next few days,” a regional trader said.

In the Northeast, traders were carefully watching the developments of Hurricane Earl, which is expected to propel its way to the East Coast by the weekend. One regional trader said he was already “stocking up on water, cash, ice and cold beer.”

He added that the storm’s current path is expected to cross Nova Scotia, possibly near the Sable Offshore Energy complex, which pro-duces about 400,000 Mcf/d of gas for eastern Canada and New England. The Sable platform was shut in as a precaution during Hurricane Bill in August 2009; as of Wednesday, no evacuations had been announced due to Earl.

Canaport LNG, another major shipper to the Northeast, is also located near the storm’s path in St. John, New Brunswick. Throughput from the onshore liquefied natural gas facility averaged about 120,000 Mcf/d in August.

Meanwhile, cash prices in the Northeast fell a few cents as NYMEX weakness trumped strong cooling demand. Transcontinental Gas Pipe

More information about Platts natural gas market coverage, includ-ing explanations of methodology and descriptions of delivery points, is available at www.platts.com/Natural Gas/Resources/Methodology & Specifications/.

Questions may also be directed to our market editor, Tom Castleman, (713) 658-3263, [email protected].

Market coverage



Line zone 6-New York slid into the lower $4.20s on ICE but saw its premium to Henry Hub top 50 cents for the first time in three weeks.

Algonquin Gas Transmission city-gate prices showed relative strength, hold-ing flat in the upper $4.30s, nearly 10 cents above regional counterpart Tennessee Gas Pipeline zone 6, which shed a few cents from Tuesday. A trader said restric-tions on Algonquin’s sealing nominations at Mendon and Mahwah, New Jersey, fueled the wider-than-normal differential.

In addition, the trader said with the approach of Earl, temperatures are likely to fall from today onward, trimming demand. “The hurricane should take all this hot weather away. Thursday should be the high, [Earl’s] starting to run up the coast Friday and Saturday.”

Along the Gulf Coast, temperatures in the mid-90s pushed Florida city-gate prices up about 15 cents, while other regional points fell as much as 10 cents due to the floundering NYMEX and seasonal weather.

In the Midcontinent, sweltering heat in Oklahoma boosted prices there. Cash at Natural Gas Pipeline Co. of America’s Midcontinent zone jumped nearly 10 cents to average in the low $3.50s. But East Texas points, including Carthage Hub and Natural’s Texok zone, ended the day nearly flat.

In the Upper Midwest, cash at the Chicago city-gates dropped a few cents to average in the high $3.70s. A trader said that the weakness in Chicago was related to falling temperatures expected in the region.

Cash at Michigan Consolidated Gas was relatively flat, trading at about a 20-cent premium to Chicago. A trader said that the MichCon strength was related to storage demand and cash strength at the Dawn, Ontario, hub. — Market Staff Reports

Analyst: Market bears are missing bullish signsVeteran energy analyst Craig Shere said Wednesday that he’s bullish on natu-

ral gas prices going forward, saying market bears are missing some subtle signals that demand will increase while production slows down.

Shere thinks the forward strip could rise as much as $1/MMBtu this year and next and could go as high as $6.25/MMBtu by 2012.

“We’re increasingly convinced the latest bearish move (back below $3.90/MMBtu) has gone way too far,” Shere, the senior energy analyst at Tuohy Brothers Investment Research, said in a report.

“Our thesis has been rather simple — the marginal cost of gas production keeps falling (due to technology and more prolific basins), while the marginal cost of coal keeps rising (due to thinning seams and productivity challenges relat-ing to increased safety/environmental oversight),” Shere said. As a result, utilities are buying more gas than coal, generating the 1 to 2 Bcf/d of demand that will balance the market, he said.

Shere noted that Spectra Energy CEO Greg Ebel told a recent Tuohy Brothers energy conference that gas-fired generation should increase its market share 4% to 5% over the next two years. “This prediction is presumably based on a com-bination of coal-to-gas fuel-switching, outright coal-fired plant retirements and increased demand from economic recovery,” he said.

“Holding gas-fired capacity static (in fact, it’s increasing), this higher utiliza-tion rate would yield about 20% more gas-fired MWh,” Shere noted. “According to the Energy Information Administration, we’re consuming close to 7 Tcf of natural gas in the power stack now, so a 20% increase might yield 1.4 Tcf more annual demand (about 3.8 Bcf/d).”

In addition to cheap gas taking market share from coal, production in the Gulf of Mexico is declining following the drilling moratorium sparked by BP’s Macondo spill, Shere said, adding that output won’t rise substantially even after the ban is lifted. In fact, “Tuohy Brothers’ E&P analyst Phil Dodge sees a poten-tially long-lasting reduction in GOM gas production from a more stringent and

Federal judge denies Interior’s bid to dismiss offshore moratorium suit

A US District Court judge in Louisiana on Wednesday denied a bid by Interior Secretary Ken Salazar to dismiss a lawsuit filed by Hornbeck Offshore and others over the government’s six-month deepwater drilling ban.

In his order, Judge Martin Feldman rejected Salazar’s argument that the initial moratorium, which was issued May 28, was replaced by a second moratorium issued July 12 and therefore rendered the Hornbeck complaint moot.

Feldman in late June granted Hornbeck’s motion for a preliminary injunction against the initial moratorium. That ruling was appealed by the Interior Department, and the Fifth Circuit Court of Appeals in New Orleans subsequently sent the case back to Feldman’s court to determine whether the May 28 moratorium was rendered meaningless by the July 12 one.

Feldman noted in his latest order that the second moratorium “covers precisely the same rigs and precisely the same deepwater drilling in the Gulf of Mexico as did the first moratorium.”

Feldman chastised Interior for stating publicly that it intended to issue a second ban even before the appeals court had ruled on the legality of the first ban. “It is dif-ficult to square such public expressions of resoluteness with the government’s assertion that its rescission of the first moratorium and its issuance of a new moratorium is entitled to solicitude and should not be considered litiga-tion posturing,” Feldman wrote.

An Interior spokesman said Wednesday that the department was reviewing the decision.

Todd Hornbeck, chairman and CEO of Hornbeck Offshore, said the ruling should send a strong message to Interior to end the moratorium. “There have been sev-eral hearings now and several decisions by the courts and I think it’s getting a little redundant,” he said. “The administration needs to move on and lift the moratorium and start issuing permits.”

Contract driller Ensco International on July 20 filed suit over the second drilling ban, saying it was “substantially the same” as the prior moratorium and that it violated US law. That case is pending.

— Gary Gentile, Robert DiNardo

FERC grants three-year extension for completion of Liberty storage project

Liberty Gas Storage on Wednesday was granted a three-year extension to complete and place into service its gas storage and pipeline project planned for Calcasieu and Cameron parishes, Louisiana.

The Federal Energy Regulatory Commission in June 2009 approved Liberty’s plan (CP08-484) to add nearly 19 Bcf of working gas capacity by converting three exist-ing salt dome caverns and building a fourth into a high-deliverability storage system. With the expansion, the facility that FERC first certificated in 2005 would have 35 Bcf of working gas capacity.

The project design also calls for installation of a five-mile, 36-inch-diameter, bi-directional pipeline connecting the field to the Cameron Interstate Pipeline. Other inter-state pipelines already connected to the storage opera-tion give it access to more than 5 Bcf/d of transportation capacity.

Having successfully argued before FERC that it needs more time to contract with potential customers and arrange financing, the company’s deadline was moved back to December 2, 2013. — Chris Newkumet



slower moving permit approval process,” Shere said. Another subtle change in the supply-demand dynamic is that the move to

oilier, liquids-rich drilling is cutting into the amount of dry gas going into the pipeline grid. “ ‘Gas’ drilling in liquids-rich plays tends to produce a smaller dry gas stream (sometimes much smaller),” he said. — Bill Holland

the McCarthy Road Service Center. It also approved a contract to allow the pro-ducer to conduct seismic testing at the sites prior to deciding whether to drill.

Mayor Annise Parker said the drilling contract could open a new chapter in the city’s history.

“One of the interesting things about Houston being the oil and gas capital of the world is, we were never a huge producing center. We are the headquarters of a lot of these companies and we are a trans-shipment center, but there was not a lot of pressure on us to provide an opportunity for oil and gas drilling,” the mayor added.

Under the lease agreement, the city will receive $200,000 from the company, of which $154,000 will go toward maintenance of Herman Brown Park, the larg-est of the three. In addition, the city will receive a 25% royalty on any gas pro-duced from the leased acreage.

The contract calls for the operator to drill directionally from pads located on property not owned by the city.

Parker said the contract would benefit Houston regardless of whether Southern Star discovers commercial reserves of gas or oil. “Whether or not they find anything, there is a lease fee going in and benefitting those parks immedi-ately,” she said in a press conference after the council vote.

Because it has had little history of oil and gas production, Houston does not have an ordinance specifically crafted to regulate drilling within its boundaries, unlike cities such as Fort Worth that sit atop the Barnett Shale gas play of North Texas.

“If they determine there are commercial reserves there, we might have to revisit the idea of a comprehensive oil and gas ordinance,” the mayor said. In the meantime, “the driller will comply with all state environmental regulations that are required for any type of oil and gas drilling operation. The driller will also comply with all of our city regulations. They will not be in the park, so it’s not going to have any impact on kids who are playing in the park.”

Robert Johnson, senior assistant city attorney, said Chapter 31 of the Houston Code of Ordinances does spell out some restrictions for oil and gas wells within the city. For example, it “provides that a well may not be drilled at a location nearer than 400 feet from a residence or building without prior written permis-sion of the owners.”

Although one section was amended in 2003, the ordinance saw its last major revision in 1990, long before the explosive growth of urban gas drilling in the Fort Worth Basin.

Parker said she had visited with Mike Moncrief, the mayor of Fort Worth, to learn what Houston can expect from the experience. “I don’t believe we have the same kind of comprehensive ordinance as Fort Worth does. I also don’t believe that we’re going to be a hotbed of drilling activity,” she said.

Steve Hartzell, co-owner of Southern Star, said that the company plans to conduct seismic surveys of the leased acreage using explosive “mini-charges” and vibration equipment. “I don’t know if we’re going to be drilling under the parks,” he said. “The likelihood is we will find gas, but the possibility of oil is there.”

The three parks are located in a largely undeveloped, primarily industrial area of the city north and east of downtown. Hartzell said public reaction to the pro-posed seismic project has been a “mixed bag,” with some neighbors expressing

Houston approves drilling under parks ... from page 1

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$/MMBtu $/MMBtu

$/MMBtu

Table and graphs are created using Platts–ICE Forward Curve — Natural Gas (North America) data. Forward assessments as basis to the Henry Hub and full values are available forperiods spanning three years. To see a sample and find information on how to subscribe to the full data set go to www.risk.platts.com. For more information on Platts services, pleasecall +1-800-PLATTS8. For editorial questions call Samantha Santa Maria +713-658-3271 or Joshua Starnes, 713-658-3265.

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Sep-1 Aug-24 Aug-16 Aug-6 Jul-29

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Northwest, Sumas: Key packages, last 30 days Northwest, Sumas: Forward curve

Northwest, Sumas: Basis market vs NYMEX

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Sep-1 Aug-24 Aug-16 Aug-6 Jul-29

Prompt month basisPrompt month NYMEX

spot price, last 30 days

Cal 13

Cal 12

Cal 11

Winter 12-13

Sum

mer 12

Winter 11-12

Sum

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Winter 10-11

Nov 10

Dec 10

Oct 10

Oct Summer 11Winter 2010-11 Cal 2011

Platts-ICE Forward Curve — Natural Gas, Sep 1 (¢/MMBtu)

Prompt month:Oct 10

Algonquin, city-gates 31.25

Transco, zone 6-NY 27.50

Texas Eastern, M-3 26.50

Columbia Gas, Appalachia 6.75

Transco, zone 3 -1.25

Transco, zone 4 -1.00

Florida Gas, zone 3 4.00

Trunkline, LA -6.50

Houston Ship Channel -3.50

Chicago city-gates 2.00

MichCon city-gate 17.25

Panhandle, TX-Okla. -36.75

Waha -25.50

El Paso, Permian Basin -35.00

El Paso, San Juan Basin -46.00

PG&E city-gate 12.50

SoCal Gas -21.75

Northwest, Rockies -64.75

Northwest, Sumas -21.25

Dawn, Ontario 36.00

AECO, Alberta -39.25Summer season is April-October. Winter is November-March.

support and others expressing safety and environmental concerns. Southern Star has agreed to set up a hotline to address any concerns that arise.

This is not the first time Houston has entered a contract with an exploration-and-production company to tap hydrocarbons under city parks. Several years ago, the city signed a similar agreement with an operator to explore beneath Cullinan Park on the city’s southwest side, said Estella Espinosa, a Parks Department spokeswoman. “Nothing came from that exploration,” she said. — Jim Magill

Houston-based EOG. “Activity in the Eagle Ford Shale continues to exceed industry expectations as

more than 90 rigs working in the play have drilled more than 175 wells to date,” Enterprise said. “Current production from the play is estimated at approximately 300,000 Mcf/d of natural gas and 40,000 barrels/d of crude oil and condensate.”

Enterprise said it has committed to building 52 miles of gas pipeline to complement its previously announced mainline project in the region. The new capacity will help Enterprise provide EOG with firm gas transportation and pro-cessing and natural gas liquids transportation and fractionation services under seven-year contracts.

Enterprise said it will provide EOG with gas processing services at the partner-ship’s planned cryogenic gas processing facility, which is expected to be in service in mid-2012 with an initial capacity of 600,000 Mcf/d.

The NGL recovered from EOG’s gas volumes at the plant will be transported through Enterprise’s recently announced 127-mile, 12-inch-diameter NGL pipe-line to its Mont Belvieu complex, where Enterprise will construct a fifth NGL fractionator.

Prior to completion of the processing and NGL facilities, Enterprise will use existing capacity in its network of South Texas infrastructure to process EOG’s gas

Enterprise plans network in Eagle Ford ... from page 1

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the Platts-ICE Forward Curves for natural gas and electricity.

Platts-ICE Forward Curve—Natural Gasprovides, every afternoon of every

business day, daily assessments of the financial basis swap market at

21 key trading hubs for trading packages extending through 2011.

The Platts-ICE Forward Curve—Electricityprovides each afternoon daily assessments for

on-peak and off-peak power forwards at 17 key trading hubs for trading packages

extending through 2012.

For a sample data set please call 1-800-PLATTS8. For editorial questions, please call or email

Mike Wilczek (202-383-2246; [email protected]) or Brian Jordan (202-383-2181; [email protected]).

]



Natural gas hub flow, Sep 1

Hub Name Scheduled +/- % Daily --31 Day Average-- Flow Change Price Flow Price

ANR, La. 789 -98 -11.00 3.750 775 4.269Dracut, Mass. 1 -3 -66.71 4.150 8 4.563Florida city-gates 1,895 31 1.69 4.365 1,888 6.632Iroquois, receipts 513 -156 -23.26 4.395 601 4.758Kern River, Opal plant 819 64 8.44 2.980 808 3.314Niagara 145 36 33.29 4.220 130 4.619Northern, Ventura 755 -34 -4.32 3.645 815 4.129Northern, demarc 832 -54 -6.08 3.625 825 4.122Northwest, Can. bdr. (Sumas) 831 -0 -0.05 3.205 839 3.411PG&E, Malin 1,361 -118 -7.97 3.365 1,671 3.672Stanfield, Ore. 0 0 - 3.315 1 3.540Transco, zone 3 1,244 -65 -4.94 3.785 1,351 4.313Transco, zone 6 N.Y. 1,651 -6 -0.38 4.265 1,529 4.657

Volumes in 000 MMBtu; prices in $/MMBtu. For more information, contact Bill Murphy at 720-548-5485.

Source: Platts data

NYMEX Henry Hub gas futures contract, Sep 1

Settlement High Low +/- Volume

Oct 2010 3.762 3.878 3.708 -5.4 120458Nov 2010 4.059 4.174 4.039 -8.9 41530Dec 2010 4.415 4.507 4.384 -7.7 24898Jan 2011 4.584 4.673 4.555 -7.0 23097Feb 2011 4.581 4.666 4.550 -6.6 6511Mar 2011 4.516 4.596 4.487 -6.4 7105Apr 2011 4.439 4.518 4.405 -6.1 6872May 2011 4.465 4.539 4.435 -6.0 3438Jun 2011 4.520 4.590 4.492 -5.9 1982Jul 2011 4.591 4.658 4.562 -6.0 1509Aug 2011 4.641 4.711 4.614 -6.2 1267Sep 2011 4.663 4.732 4.633 -6.1 1294Oct 2011 4.745 4.813 4.719 -5.9 2897Nov 2011 4.998 5.050 4.971 -5.6 311Dec 2011 5.303 5.368 5.280 -5.1 233Jan 2012 5.480 5.528 5.458 -4.9 839Feb 2012 5.443 5.478 5.425 -4.8 192Mar 2012 5.305 5.343 5.278 -4.8 148Apr 2012 5.022 5.057 5.000 -5.1 151May 2012 5.032 5.070 5.010 -5.1 13Jun 2012 5.072 5.110 5.045 -5.1 8Jul 2012 5.124 5.160 5.110 -5.1 37Aug 2012 5.166 5.200 5.150 -5.1 11Sep 2012 5.189 5.224 5.184 -5.3 11Oct 2012 5.272 8.398 5.243 -5.1 36Nov 2012 5.494 5.515 5.470 -5.1 2Dec 2012 5.747 5.790 5.720 -5.1 50Jan 2013 5.919 5.956 5.908 -5.1 4Feb 2013 5.875 5.895 5.875 -5.0 2Mar 2013 5.727 5.773 5.000 -4.6 4Apr 2013 5.347 5.393 5.354 -4.6 5May 2013 5.337 5.380 5.337 -4.6 1Jun 2013 5.367 5.413 5.367 -4.6 2Jul 2013 5.412 5.456 5.412 -4.6 2Aug 2013 5.455 5.773 5.000 -4.6 2Sep 2013 5.480 5.521 5.480 -4.6 3Contract data for Tuesday Volume of contracts traded: 206,089 Front-months open interest: OCT, 196,517; NOV, 147,790; DEC, 60.196 Total open interest: 816,479

($/MMBtu)

Henry Hub/NYMEX spread

3.4

3.6

3.8

4.0

4.2

1-Sep31-Aug30-Aug27-Aug26-Aug

Henry Hub cash priceNYMEX front month close

Platts oil prices, Sep 1

($/b) ($/MMBtu)

Gulf Coast spot 1% Resid (1) 68.25-68.30 10.863% Resid (1) 66.10-66.15 10.52

Crude spot WTI (Oct) (2) 73.90-73.92 12.69

New York spot No.2 (1) 84.92-85.13 14.600.3% Resid LP (3) 77.40-77.50 12.320.3% Resid HP (3) 75.40-75.50 12.000.7% Resid (3) 72.80-72.90 11.591% Resid (3) 70.25-70.35 11.18

1= barge delivery; 2= pipeline delivery; 3= cargo delivery

and to ship and fractionate the NGLs, Enterprise said. Enterprise also plans to build a 140-mile pipeline starting in northwest

Karnes County to its system in Austin County, to send EOG’s crude oil produc-tion from the Eagle Ford. The pipeline is anchored by a 10-year, firm transporta-tion contract with EOG, providing access to the Houston refinery market or the Enterprise-operated Seaway Pipeline that links with a crude oil storage and trad-ing hub in Cushing, Oklahoma.

The pipeline will have a capacity of 350,000 barrels/d, which would be enough to meet EOG’s requirements and accommodate other producers, many of which are in discussions with Enterprise, the company said. Completion is expected in the first quarter of 2012. — Tom Tiernan

“Despite FERC’s comprehensive federal review and approval, Oregon state agencies ... are using state law to unreasonably delay and substantially interfere with the overall permitting and construction of the pipeline project,” the suit said.

Pacific Connector Gas Pipeline filed the suit Friday in the US District Court for the District of Oregon against Louise Solliday, director of the Oregon Department of State Lands, and Richard Whitman, director of the Oregon Department of Land Conservation and Development.

The pipeline said the state has made it impossible to meet local permit-ting demands. “In essence, [the] defendants are employing a legal ‘Catch-22,’” it said.

Before the pipeline can apply for a permit to dig along the route, for instance, the Department of State Lands said it must obtain the signatures of at least 220 affected landowners. At the same time, the Department of Land Conservation and Development said it wouldn’t review its request for a Coastal Zone Management Act certificate until its application to dig is com-plete.

FERC requires the coastal zone permit before signing off on construction and granting the power of eminent domain.

The pipeline said the case reveals a concerted effort by the state to stop any LNG infrastructure. It called the requirement for landowner signatures “a pretext to impose the preferences of certain state policy makers to keep LNG terminals and associated natural gas pipelines from fairly being consid-ered under the laws of the state.”

“The state is effectively imposing certain officials’ political interests over the interests of the region and nation, to the detriment of and in conflict

Pipeline sues Oregon over LNG project ... from page 1



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Officers of the Corporation: Harold McGraw III, Chairman, President and Chief Executive Officer; Kenneth Vittor, Executive Vice President and General Counsel; Robert J. Bahash, Executive Vice President and Chief Financial Officer; John Weisenseel, Senior Vice President, Treasury Operations.

Prices, indexes, assessments and other price information published herein are based on material collected from actual market participants. Platts makes no warranties, express or implied, as to the accuracy, adequacy or completeness of the data and other information set forth in this publication (‘data’) or as to the merchantability or fitness for a particular use of the data. Platts assumes no liability in connection with any party’s use of the data. Corporate policy pro-hibits editorial personnel from holding any financial interest in companies they cover and from disclosing information prior to the publication date of an issue.

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Spot Market EditorsLeticia Vasquez, 713-658-3259 Adam Bennett, 713-658-3254 Eunice Bridges, 713-658-3256

Forwards Markets EditorsJoshua Starnes, 713-658-3265 Samantha Santa Maria, 713-658-3271

Futures Markets EditorsJessica Marron, 202-383-2287 Cheryl Buchta, 720-548-5645 Brian Scheid, 202-383-2147

Manager, Houston gas market reportingMichael Rieke

Editorial Director, Market ReportingBrian Jordan

Global Editorial Director, PowerLarry Foster

Editorial Director, US Gas News Mark Davidson, 202-383-2148 [email protected]

Senior EditorStephanie Seay 865-690-4319

Associate EditorsJim Magill, 713-658-3229 Rodney A. White, 202-383-2143 Bill Holland, 202-383-2286

Markets EditorTom Castleman, 713-658-3263 [email protected]

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Volume 27 / Issue 169 / Thursday, September 2, 2010

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Vice President, EditorialDan Tanz

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0885-5935Gas Daily

with national energy policy as determined by Congress and by FERC,” the complaint said.

The pipeline referred to a January press release from Governor Ted Kulongoski and Attorney General John Kroger objecting to FERC’s approval of Jordan Cove.

“FERC continues to ignore Oregon’s very real concerns about the unknown envi-

ronmental impact of the pipeline associated with the proposed LNG facil-ity,” Kulongoski said in the release. “FERC’s decision to issue a conditional license for a project with such profound potential impacts on the lives of Oregonians was based on woefully inadequate information and demands reconsideration.”

Pacific Connector asked the court to declare that the “remove-fill” per-mitting requirements, including landowner signatures, are unlawful and pre-empted by the Natural Gas Act. — Meghan Gordon

New locations proposed for Platts’ natural gas forward assessments

Platts is proposing to add seven locations to its daily forward assessments for North American natural gas.

The locations, which Platts is proposing to add to the Platts-ICE Forward Curve Natural Gas effective October 28, 2010, are: Columbia Gulf, mainline; Dominion, South Point (Dominion, Appalachia in Platts’ monthly survey); NGPL, Texok zone; Northern, demarcation (also known as Demarc in the forward swaps market); Northern, Ventura; PG&E, Malin; and Tennessee, Louisiana, 500 Leg.

Definitions for these delivery locations are consistent with those for the Platts daily and monthly physical gas survey descriptions, which can be found in the North American Natural Gas Methodology and Specifications Guide on Platts.com. These seven new assessments would be available along with the existing 21 assess-ments in the forward curve add-on to Platts Natural Gas Alert and via Platts Dispatch in category GN. Please provide feedback or submit questions by September 15, 2010 to:Mike Wilczek at [email protected] orBrian Jordan at [email protected] with a cc to [email protected].

Editor’s NoteGas Daily will not publish Monday, September 6, due

to the Labor Day holiday. Gas price information collected Friday, September 3, for the Daily Price Survey to be published in the September 7 Gas Daily will be for gas flowing September 4-7.

[platts] gas daily - 2-sept-2010

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