Monday, January 29, 2007

February natural gas gained 11.5 cents to $7.29 per million British thermal units, with colder-than-normal temperatures expected to remain in the Northeast and Midwest over the next several days. March will become the lead futures contract at the session's end. March natural gas was at $7.28, up 12.2 cents.

Friday, January 26, 2007

Russia and Venezuela have signed an agreement worth US$15 million (€11.5 million) to cooperate in developing Venezuela's natural gas resources, Venezuelan state oil company Petroleos de Venezuela SA, or PDVSA, announced Tuesday.

The pact, which initially covers a period of one year, includes an assessment of Venezuela's natural gas industry and the development of a plan to improve its efficiency.

Venezuela hopes to consolidate its system to transport and distribute natural gas with the agreement, PDVSA said in a statement.

Felix Rodriguez, president of PDVSA GAS, said his company hopes to incorporate the experience of Russian state company GAZPROM through a project that "will allow us to increase production and improve our ability to respond to contingencies."

Venezuela has 147.5 billion cubic feet of proven natural gas reserves, according to official estimates. This would give it the eighth largest reserves in the world and the largest in Latin America.

Thursday, January 25, 2007

Working gas in storage was 2,757 Bcf as of Friday, January 19, 2007, according to EIA estimates. This represents a net decline of 179 Bcf from the previous week. Stocks were 251 Bcf higher than last year at this time and 472 Bcf above the 5-year average of 2,285 Bcf. In the East Region, stocks were 291 Bcf above the 5-year average following net withdrawals of 75 Bcf. Stocks in the Producing Region were 170 Bcf above the 5-year average of 682 Bcf after a net withdrawal of 61 Bcf. Stocks in the West Region were 11 Bcf above the 5-year average after a net drawdown of 43 Bcf. At 2,757 Bcf, total working gas is above the 5-year historical range.

Wednesday, January 24, 2007

A BP PLC-led consortium has again halted production of natural gas at a giant Caspian Sea field off the coast of Azerbaijan because of unspecified technical problems, BP said Tuesday.

Gas from the Shah Deniz field – one of Azerbaijan's largest – has been keenly awaited by both Azerbaijan and neighboring Georgia, both of which have been affected by Russia's decision to increase prices sharply last year.

The operators had already stopped output at the field a week after starting commercial production in December, and only brought it back onstream a month later on Jan. 14.

The decision to cease production again was taken after checks on the effectiveness of that maintenance work, said a spokeswoman for BP's Azerbaijani subsidiary, Tamam Bayatli.

The Dec. 15 halt in production forced Georgia to sign stopgap gas supply deals with Moscow at what it considers to be extortionate prices.

The BP-led consortium, which also includes Norway's Statoil, France's Total, Russia's Lukoil and other companies, has said it plans to produce at least 5.4 billion cubic meters of gas from Shah Deniz this year, with about 2.4 billion cubic meters earmarked for domestic consumption, 2.8 billion cubic meters for export to Turkey, and 270 million cubic meters for export to Georgia.

Tuesday, January 23, 2007

Texas Gas Transmission is proposing a 167-mile natural gas pipeline from central Arkansas to northern Mississippi as a way to get natural gas to market from the Fayetteville Shale deposits.
Texas Gas, which is headquartered in Owensboro, Kentucky, has begun the filing process with the Federal Energy Regulatory Commission.

The commission will be the lead federal agency for conducting an environmental review of the project.

The company expects the line will cost about 360 (m) million dollars.

With regulatory approval, Texas Gas plans to begin construction in 2008 and complete the project in early 2009.

The line would carry gas from the Fayetteville Shale, an underground reservoir of natural gas that was first plumbed by Houston-based Southwestern Energy Company in 2004.

Monday, January 22, 2007

A pipeline to carry gas from Qatar should start supplying Oman on schedule by 2008, Oman's oil and gas minister said.

'Qatari gas will come to Oman by 2008,' Mohammad Al Rumhy said in Muscat.

'They will supply around 200 million cubic feet a day.'

The gas will flow through the Dolphin pipeline, the first cross-border gas line in the region.

Dolphin Energy aims to take up to 3.5 billion cubic feet a day of natural gas to the UAE and then later to Oman.

Doubts about the $3.5 billion project surfaced last July when Saudi Arabia told minority partners in the project, Total and Occidental Petroleum, it had reservations about the pipeline route.

Dolphin said then it had not received any objection from Saudi Arabia and in August it completed the sub-sea line.

The line is scheduled to begin supplying the UAE in 2007.

At present, Oman supplies up to 135 million cubic feet of gas per day to the UAE. But the flow will change direction in 2008 when Oman's gas consumption rises as new gas-consuming industries start.

Oman will boost gas output this year to 60 million cubic metres (2.119 billion cu ft) per day from 50 million cu m/d in the previous year through redevelopment of existing fields, Rumhy said.

Abu Dhabi's state-run Mubadala group owns 51 per cent of Dolphin, while France's Total and US Occidental Petroleum each hold a 24.5 per cent stake.

Friday, January 19, 2007



With an explosively intensifying low-pressure system heading into the Canadian Maritimes, northwest winds are becoming strong and gusty across the Mid-Atlantic and Northeast. The winds will continue across the region Saturday and across New England a final day on Sunday. On Saturday, gusts will be in the 40-to-50-mph range over eastern New York and the 40-to-60-mph range across New England. Some tree damage and power outages are possible.

On Saturday, heavy lake-effect snow will continue for northwest Pennsylvania and parts of Upstate New York with snow totals locally in the 1-to-2-foot range by evening.

By Sunday, the lake effect snow will decrease, but a new winter storm will move into the southern Great Lakes and Ohio Valley. This system will spread a light wintry mix into the southern Mid-Atlantic.

On Monday, rain will douse southeast Virginia while flurries linger from the Appalachians westward.


A developing winter storm is quickly impacting parts of Texas with snow for the far west-central counties and the panhandle, sleet and freezing rain from the Davis Mountains to Lubbock to Childress and rain over the remainder of the state.

As the storm evolves Saturday, heavy snow and sleet will accumulate over 6 inches in parts of far west Texas and western Oklahoma. Sleet and freezing rain will extend from parts of western Texas northward across a diagonal slice of Oklahoma from the southwest to northeast corners including Oklahoma City and Tulsa. Also wintry mix will develop over northern Arkansas.

Steady locally inch-plus rain will develop through central and east Texas and southeast Oklahoma, moving across the Lower Mississippi River Valley into Saturday night.

On Sunday, the storm will rapidly shift eastward with rain moving through the Tennessee Valley and northern Gulf Coast States. By Sunday night and early Monday as the rain enters the Southeast, the western Carolinas could see some sleet and freezing rain.

On Monday, a corridor of heavy inch-plus rain may stall for a time from the eastern Carolinas to southern Louisiana. A new storm in the Southwest will bring a burst of accumulating snow to southwest Texas.
Working gas in storage was 2,936 Bcf as of Friday, January 12, 2007, according to EIA estimates. This represents a net decline of 89 Bcf from the previous week. Stocks were 354 Bcf higher than last year at this time and 491 Bcf above the 5-year average of 2,445 Bcf. In the East Region, stocks were 262 Bcf above the 5-year average following net withdrawals of 52 Bcf. Stocks in the Producing Region were 193 Bcf above the 5-year average of 720 Bcf after a net withdrawal of 20 Bcf. Stocks in the West Region were 37 Bcf above the 5-year average after a net drawdown of 17 Bcf. At 2,936 Bcf, total working gas is above the 5-year historical range.

Thursday, January 18, 2007

Sherritt International Corp. has partnered with the Ontario Teachers Pension Plan to create a $1.5-billion project to produce synthetic natural gas from coal.

Details of the proposed Dodds-Roundhill Coal Gasification Project were released in a public disclosure document on the company's website. The application will be submitted for regulatory approval in 2008.

Sherritt, a Toronto-based natural resource company, plans to build a surface coal mine and gasification facility to process coal and produce the gas about 80 kilometres southeast of Edmonton. The project will be managed and operated by Sherritt. The coal feedstock is owned by the Carbon Development Partnership, which is an equally divided partnership between Sherritt and the OTPP.

''The Dodds-Roundhill coal gasification project represents a key step towards Alberta's future as a global centre of excellence in innovative 'clean coal' technology,'' Barry Hatt, senior vice-president of Sherritt, said in the report.

''This new technology will help preserve natural gas resources for higher value uses and unlock the full energy potential of coal. This new energy source can support the development of Alberta's vast oilsands resources in an environmentally sustainable manner,'' he said.

Following regulatory approval, which the company expects in 2009, construction would begin mid-2009 and the start up of the plant would be 2011, the company said.

The proposed mine and plant are the first stage of the project. The company's long-term plans involve as many as four similar facilities.

Wednesday, January 17, 2007

The Russian natural gas giant Gazprom is partly suspending cooperation with the operator of the Polish segment of a major pipeline after its request for lower transit fees was rebuffed, Poland's state-owned gas monopoly said Tuesday.

The Polish company, Polskie Gornictwo Naftowe & Gazownictwo, or PGNiG, did not specify what, if any, effect the dispute involving the Yamal pipeline, which carries Russian gas to Europe, might have.

The dispute comes as Russia, under President Vladimir Putin, has been putting pressure on other European countries regarding energy resources. Most recently, Gazprom suspended natural gas supplies to Belarus after a dispute over fees. That was resolved Dec. 31 with a new deal on prices, barely avoiding a cutoff to Europe. But Putin said Tuesday that Russia would cut energy subsidies to Belarus.

Gazprom and Rosneft, both state- controlled Russian companies, have also been jockeying for rights to buy out the Russian partners of the British oil company BP. The move might eventually leave BP with a minority stake in the venture; it now owns half.

And in December, Gazprom took majority control of the largest combined oil and natural gas field in the world, Sakhalin-2, when the foreign developers, led by Royal Dutch Shell, agreed to sell 50 percent plus one share to Gazprom. That came after months of pressure on the company and accusations from a Russian environmental regulator. Critics called the sale of the Russian Far East field a forced nationalization.

Tuesday, January 16, 2007

Chevron Corp. and Royal Dutch Shell Plc are delaying construction projects from Australia to Nigeria, and that may raise natural gas prices for years to come.

None of the world's biggest energy companies approved developments last year to increase production of liquefied natural gas, which helps heat homes and run power plants from Tokyo to Boston. The main reason is the cost to build LNG plants has tripled in six years, according to Bechtel Group Inc., the biggest U.S. contractor.

Natural gas prices are three times higher than during the 1990s and consumption of the fuel will outpace the 1.6 percent annual gain in energy demand for the next 25 years, according to the International Energy Agency. Gas is also becoming more popular because it emits 29 percent less carbon dioxide than oil and 45 percent less than coal burned in power stations.

"Costs are going up and they're going up far faster than anybody expected," said Andy Flower, a U.K.-based consultant to the LNG industry and a former BP Plc executive. He forecasts that the world LNG shortage will last until at least 2011.

Gas may become more important than oil in the next 50 years because crude supplies are running out faster, according to the Paris-based IEA. Global oil and natural gas reserves were about the same at the end of 2005, equal to 1.2 trillion barrels of crude, according to data compiled by BP. Oil reserves are being burned almost twice as quickly as gas.

LNG sales rose about 11 percent last year to 157 million metric tons, according to Wood Mackenzie Consultants Inc. in Edinburgh. It may jump about 66 percent to 261 million tons in 2010 and another 87 percent to 488 million by 2020, the group said.

Record LNG prices won't fall for "years to come," said Ari Soemarno, president of Indonesia's state energy company, PT Pertamina, until 2005 the world's largest LNG exporter. Prices under multiyear contracts, excluding freight and insurance, range as high as about $10 per million British thermal units in Asia, assuming $60 a barrel for oil, part of LNG price formulas.

Natural gas deposited near industrialized nations is typically transported through pipelines. The challenge is getting gas from the biggest producers -- Russia, Qatar and Iran -- to consumers worldwide who aren't linked by those networks. Now, gas that can't be transported is pumped back underground to force more crude to the surface, or burned off.

Sunday, January 14, 2007

Cold Brings Increased Natural Gas Usage

A sprawling winter storm system continues to plague much of the nation today with ice, snow and heavy rain.

Ice storm warnings remain posted from portions of western and northern Texas northeastward to the mid-Mississippi Valley. Over the next 12 hours, the most significant icing--up to a quarter of an inch or so--seems likely from north-central and parts of northeastern Texas into eastern Oklahoma. But that's not to say that other areas under ice storm warnings won't experience problems. Even freezing drizzle can be extremely dangerous on roads.

Friday, January 12, 2007

Freezing rain hit Oklahoma on Friday at the start of what forecasters say could be a brutal ice storm.

Millions of people in the Texas Panhandle, Oklahoma and eastern Missouri are being warned that conditions will deteriorate Friday afternoon and the storm could spread as far east as Ohio and New York over the Martin Luther King Jr. holiday weekend.

"This is a one-in-maybe-15-to 25-year event," CNN severe weather expert Chad Myers said Friday of the forecast freezing rain, sleet and snow.

Freezing rain was also forecast for southeast Kansas into central Missouri Friday and is expected to hit I-44 by late Friday afternoon, the National Weather Service said.

Ice up to three-quarters of an inch will be likely by Saturday morning, and some parts could see ice accumulations of an inch and a half by Sunday, all of which could mean widespread power outages, the weather service said.

Temperatures in the week ahead will have highs in the 20s and lows in the teens and possibly single digits, the weather service added, according to AP.

In addition to the central U.S., a cold snap also was predicted this weekend for California, where farmers were preparing to monitor the health of a nearly $1 billion citrus crop, The Associated Press reported.

Crude oil for February delivery rose as much as $1.06, or 2 percent, to $52.94 a barrel in after-hours electronic trading on the New York Mercantile Exchange, its first gain this week. The contract traded at $52.34 at 12:58 p.m. in London.

Brent crude oil for February settlement climbed as much as $1.24, or 2.4 percent, to $52.94 a barrel in electronic trading on the ICE Futures exchange and traded at $52.36 in London.

Some analysts and brokers expect a forecast for colder weather next week to push prices higher. Colder weather will reach the northeastern U.S. Jan. 17 through Jan. 21, according to the U.S. National Weather Service. Temperatures in the region were milder than normal through the first part of winter. New York had its third-warmest December on record.

``The temperature is expected to drop below normal after'' the next five days, said Michael Davies, an analyst in London with broker Sucden (U.K.) Ltd. ``Many traders are expecting OPEC to take action in order to support prices.''

Thursday, January 11, 2007

Working gas in storage was 3,025 Bcf as of Friday, January 5, 2007, according to EIA estimates. This represents a net decline of 49 Bcf from the previous week. Stocks were 401 Bcf higher than last year at this time and 461 Bcf above the 5-year average of 2,564 Bcf. In the East Region, stocks were 241 Bcf above the 5-year average following net withdrawals of 28 Bcf. Stocks in the Producing Region were 182 Bcf above the 5-year average of 751 Bcf after a net withdrawal of 9 Bcf. Stocks in the West Region were 38 Bcf above the 5-year average after a net drawdown of 12 Bcf. At 3,025 Bcf, total working gas is above the 5-year historical range.

Wednesday, January 10, 2007

Chevron Corp., the No. 2 U.S. oil company, reported on Tuesday that its fourth-quarter oil and gas production fell both in the United States and internationally, and it said it expects results in the quarter to be hurt by lower commodity prices.

The company said U.S. liquids and natural gas production fell almost 1 percent from the third quarter as planned project activity in the Gulf of Mexico continued into December.

Combined international liquids and natural gas production volumes were down 3.4 percent from the previous quarter.

Chevron said production volumes reflect the impact of a change in its service agreement with Venezuela's state oil company, which is estimated to reduce volumes by about 90,000 barrels per day.

U.S. crude realizations decreased by $11.72 per barrel, in line with the decrease in the price of West Texas Intermediate crude and California heavy crude, while international liquids realizations fell $11.05 per barrel, in line with the decrease in Brent spot prices.

Chevron said. U.S. natural gas realizations fell by 51 cents per thousand cubic feet.

Chevron said it expects fourth-quarter results to be at or above the high end of its standard forecast for net after-tax charges for corporate and other activities of between $160 million and $200 million.

Tuesday, January 09, 2007

Crude oil fell to the lowest in a year and a half as mild weather in the eastern U.S. curbed heating- fuel consumption, causing stockpiles to increase.

Temperatures in New York will rise to 48 degrees Fahrenheit (9 Celsius) today, 10 degrees above the normal high, the National Weather Service said. The city had its third-warmest December on record. OPEC will speed up a 500,000 barrel-a-day output cut by almost a month to stop the fall in oil prices, Qatar's oil minister said.

``It's hard to be worried about heating-oil supplies when we've seen 60-degree weather this January,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. ``Refiners are shifting to gasoline production, which should leave us with ample supplies when demand picks up. Demand for crude oil should fall as the product stockpiles grow.''

Crude oil for February delivery fell $1.37, or 2.4 percent, to $54.72 a barrel at 10:21 a.m. on the New York Mercantile Exchange. Futures touched $53.88, the lowest since June 13, 2005, prior to Hurricane Katrina, which destroyed oil platforms and refineries along the U.S. Gulf of Mexico coast. Prices are down 10 percent this year and 14 percent from a year ago.

Monday, January 08, 2007

Crude oil rose for a second day on speculation that falling temperatures in the U.S. may boost heating demand in the world's largest energy consumer and as Russian supplies to Poland and Germany were curtailed.

Up to six inches of snow may fall today in parts of the U.S. Northeast, where four-fifths of the country's heating oil is burned, according to forecasting service Accuweather.com. Russian crude oil deliveries to Poland and Germany along a million barrel- a-day pipeline were halted following a dispute between Russia and Belarus, according to the Polish pipeline operator.

``The weather is the main driver of the market now,'' said Gerrit Zambo, an oil trader at BayernLB in Munich. ``Even small signs of cooler temperatures can bring prices back up toward the $60 a barrel region.''

Crude oil for February delivery rose as much as $1.41, or 2.5 percent, to $57.72 a barrel on the New York Mercantile Exchange and traded at $57.46 at 2:41 p.m. London time. Brent crude oil gained $1.35 to $56.99 a barrel on the London-based ICE Futures exchange.

Polish pipeline operator PERN Przyjazn SA and Grupa Lotos SA, Poland's second-largest refiner, said supplies via the Druzhba pipeline that transports Russian crude through Belarus were cut off last night. The Polish segment of the pipeline carries about 50 million tons of oil a year, including 27 million tons to German refiners.

U.S. Weather

Temperatures may drop below normal in the western U.S. this week and cooler weather will spread across most of the country until Jan. 20, according to the National Weather Service.

New York-traded crude rose 72 cents, or 1.3 percent, to $56.31 a barrel on Jan. 5 after dropping almost 9 percent the previous two sessions. Prices fell last week amid mild weather in the U.S. Northeast and after U.S. fuel inventories climbed more than expected.

Last week's price decline was the biggest since April 2005. The price of oil has plunged about 27 percent from the record $78.40 a barrel reached July 14 after Israeli forces invaded Lebanon to fight Hezbollah militants.

``The next move is likely to be back up again,'' said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. ``There could be rising hysteria in OPEC because a number of the countries like Iran and Venezuela have been spending like oil was going to stay at $70 a barrel.''

The Organization of Petroleum Exporting Countries agreed to cut output by 1.2 million barrels a day in November, citing slower-than-forecast demand growth and rising global stockpiles. Members agreed in December to cut another 500,000 barrels a day starting Feb. 1.

Friday, January 05, 2007

Working gas in storage was 3,074 Bcf as of Friday, December 29, 2006, according to EIA estimates. This represents a net decline of 47 Bcf from the previous week. Stocks were 433 Bcf higher than last year at this time and 408 Bcf above the 5-year average of 2,666 Bcf. In the East Region, stocks were 201 Bcf above the 5-year average following net withdrawals of 33 Bcf. Stocks in the Producing Region were 170 Bcf above the 5-year average of 772 Bcf after a net withdrawal of 5 Bcf. Stocks in the West Region were 37 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,074 Bcf, total working gas is above the 5-year historical range.

Wednesday, January 03, 2007

Oil prices plunged below $59 a barrel Wednesday as mild weather persisted in the United States, dampening demand for winter fuels such as heating oil and natural gas.

Light, sweet crude for February delivery on the New York Mercantile Exchange fell to $58.97 a barrel in midmorning trading, a drop of $2.08 from Friday's settlement price.

The Nymex trading floor was closed Monday for New Year's Day and Tuesday for the memorial service for former U.S. President Gerald Ford, although there was some electronic trading.

The Brent crude contract for February delivery fell $1.58 to $60.05 a barrel on the ICE Futures exchange, which was open on Tuesday.

In New York City, temperatures on the first day of 2007 hit a peak of 54 degrees Fahrenheit _ much warmer than normal.

But many analysts expect crude oil futures to stay on average above $60 a barrel this year because of robust demand growth in Asia and the Middle East, efforts by the Organization of Petroleum Exporting Countries to trim supply and market-rattling instability in suppliers such as Nigeria and Iraq.

OPEC's concerns that high global stockpiles and sluggish demand would undermine prices led it to agree on a 1.2 million barrel-a-day crude oil output cut in November and a further 500,000 barrel-a-day cut to take place Feb. 1.

"For 2007, oil pricing is likely going to be stubbornly high, with the OPEC group looking like it will want to defend a $55 floor under prices," said Victor Shum, an analyst with Purvin & Gertz in Singapore. He projected crude futures would trade in the $60-65 a barrel range. "With ongoing geopolitical concerns such as Iran and Nigeria, the market will also tend to have buyers on the high side."

Slower economic growth in the U.S. and a production spurt from non-OPEC countries should keep prices below the 2006 average of roughly $66 a barrel, analysts say.

A survey of energy analysts showed U.S. crude oil stocks were expected to decline for a fifth straight week in data due Thursday from the U.S. Energy Information Administration. The data, which will cover the week ended Dec. 22, have been delayed until Thursday because of the three-day Christmas holiday.

Crude stocks were expected to show a draw of 1.32 million barrels on average, a Dow Jones Newswires survey said, while both distillate and gasoline stocks were predicted to rise.

Distillate stocks, which include heating oil and diesel fuel, are expected to increase by an average of 220,000 barrels while gasoline inventories were seen rising by an average of 590,000 barrels.

Heating oil futures fell 4.72 cents to $1.6010 a gallon, while natural gas prices dropped 11.2 to $6.187 a gallon.