Mike,

Take a look at the comment on AGA.

Vince

 -----Original Message-----
From: 	"Robert E. Brooks" <rebrooks@earthlink.net>@ENRON [mailto:IMCEANOTES-+22Robert+20E+2E+20Brooks+22+20+3Crebrooks+40earthlink+2Enet+3E+40ENRON@ENRON.com] 
Sent:	Monday, August 20, 2001 11:51 AM
To:	'GPCM Distribution'
Subject:	GPCM News: 8/20/01:  RBAC Finalizing Schedule in Houston: Oil Companies Find Output Targets Elusive: NG Futures Dip: Gulf Pines Pipeline Plan: NG Market Ponders Storage Report: Ziff Conference


RBACFinalizing Schedule in Houston
 
Bob Brookswill be in Houstonnext week from Tuesday, August 28 through Thursday, August 30.  A few time slots are available on Thursday the 30th in the late morning and early afternoon.  Please contact Bob at 323-663-4831 or by e-mail at rebrooks@rbac.com  if you would like to schedule an appointment.
 
From http://www.enerfaxgold.com :
 
Oil Companies Find Output Targets Elusive  
    Big oil companies are failing to meet production growth targets because 
they are using up mature fields faster than they can find and develop big 
enough new ones to replace them, according to analysts. ExxonMobil, Shell, 
and Chevron have all missed output targets, despite the incentive of two 
years of high oil prices. ExxonMobil planned a 3% annual growth target last 
year but its output for the second quarter of 2001 was flat versus a year 
ago. Shell reported that its 2nd quarter production increased by only 1%, 
well short of the 5% target. Depletion from existing oil fields runs at an 
average rate of about 5% per year, and that has to be replaced by an 
equivalent amount of new production just to keep output steady. From 1998 to 
2000 the six biggest publicly traded companies largely failed to replace the 
oil and natural gas they produced with new reserves, after stripping out the 
effect of acquisitions and revisions, according to Andersen management 
consulting. BP posted one of the best performances, replacing 200% of its 
natural gas production and 86% of its oil. Shell replaced only 42% of its 
natural gas and 55% of its oil, according to Andersen. BP has set the most 
ambitious production growth target of 5.5% for this year up 7% for the longer 
term.
 
From http://www.enerfax.com (Sunday, August 19, 2001):
 
Natural Gas Futures Dip Lower
    Natural gas futures for September delivery on the NYMEX dipped $0.064 lower Friday to $3.303 per MMBtu as traders squared short positions now that Tropical Storm Chantal will miss the GulfCoast. The October contract lost $0.081 to $3.334 per MMBtu. Tropical Storm Chantal will affect the YucatanPeninsulaearly this week and then move into the central Gulf but is a nonevent. Some traders wanted their positions cleared in preparation for next week's AGA storage report as they do not trust last week's reported build of just 3 Bcf, and believe that the AGA may report a higher build this week to compensate. A lot of traders got burned by last week's report and are beginning to doubt the whole system. But, others look at the data as just a one-week blip brought about by a crescendo of events that no longer exist and do represent not a long-term shift. However, if Wednesday's AGA injection is low again this week, look for the market to rally to a higher level, but in the meantime it will be controlled by the storm entering the Gulf of Mexico. Look for support in the $3.15-$3.20 range and again at $3.00. Resistance is pegged at $3.40 and again around $3.60. Natural gas for next day delivery across the USand Canadawas generally $0.10 - $0.20 lower Friday. Natural gas for next day delivery at the Henry hub dropped $0.20 to $3.24 per MMBtu.
 
Gulf South Hold Open Season for Gulf Pines Pipeline 
    
    Gulf South Pipeline is planning to build a pipeline extending from MobileBayto North Carolinaif it receives enough interest. An open season for capacity on the Gulf Pines Pipeline is being currently being held. Gulf South Pipeline, formerly Koch Gateway Pipeline, is owned by Entergy-Koch. If completed, Gulf Pines would be 600 - 700 miles long, and would extend through Georgia, South Carolinaand North Carolina. Anticipating an in-service date of summer 2004, Gulf South is soliciting binding and non-binding bids for capacity on Gulf Pines through September 19th. The pipeline would offer an interconnection with Gulf South near MobileBay, allowing customers to source supply from Texasand Louisianaas well as from MobileBay. The Gulf South system also offers links to major storage and supply hubs.
 
Gas Daily reports this proposed pipeline may have a capacity of 1 bcf per day.  It also gives the following website for additional information:  http://www.gulfpinespipeline.com .
 
Natural Gas Market Ponders Storage Report
  
    While some were questioning the accuracy of this week's astonishingly low natural gas storage report, others blamed Tropical Storm Barry and higher demands from new power generation load. However, both the futures and cash markets jumped. Futures closed up $0.374 the day the report was announced, and the cash market rose $0.20 - $0.40 the day after. Some chose to not believe the 3 Bcf storage fill reported by the AGA, chalking it up to bad data. The average amount injected during a week in August is over 60 Bcf. The prior week's fill was 80 Bcf. Factoring in Barry and the prolonged heat wave that week, the market had been expecting a somewhat lower number, but all had predicted something above 50 Bcf. There are various reports and theories. Buyers for northeastern utilities said they had all injected and were shocked by the minus 12 Bcf storage number reported for the East. They could not entirely dismiss it, however. They noted that in the last 4 years all the new plants that have been built are natural gas only facilities. Last week could have been a good indication of what that could mean to the market. The AGA says they checked and re-checked when they came up with the unbelievable number. The AGA's numbers have always lined up with the more extensive EIA reports. It is possible that a number of factors came together all at once, with the impact of Barry on production and an higher generation loads because of Eastern heat wave. However, the curve in the cash market has been going down. That may mean that if there is a market opportunity to move volumes from storage to a consumer right now, that could be done, assuming 4 or 5 weeks later it could be replaced at the same price or maybe even less. Also, there is speculation that the pipelines were re-packing their lines with volumes out of storage because of a sudden draw down.
 
Ziff Energy Group to Hold Conference In Portland
 
Current Realities, Future Expectations
Pacific NorthwestGas Strategies Conference
October 2,2001Portland,Oregon(at the Hilton Portland)
Hear Commissioner Wilson Condon, State of Alaska, describe how Alaskagas supply will energize the Pacific Northwestsupply portfolio. And let Joe Marushack, VP, ANS Gas Commercialization for Phillips Alaska, tell you about
the plans to make these supplies a reality.
Get additional gas supply updates from Art Eastly, President & CEO, Canadian Forest Oil Ltd. (NWT) and Lanny Outlaw, President & CEO, Western Gas Resources (Rockies).
Our keynote speaker on transportation will be Michael Stewart, Executive VP,Westcoast Gas Pipeline. Also discussing pipeline expansions will be: Peter Lund, PG&E Transmission, NW; Kirk Morgan, Williams Gas Pipeline West; Donald Zinko, Colorado Interstate Gas; and Randy Jespersen, BC Gas Utility Ltd.
You'll also have an opportunity to hear the latest on Questar's new salt cavern storage facility - available to the PNW - from Questar's Gary Schmitt.
Find out views on future demand growth in the PNW from keynote speaker Dick Reiten, Chairman & CEO, NW Natural. Hear how the Bonneville Power Administration plans to reconnect with its supply contracts from Acting Administrator & CEO, Steve Wright. Also hear what Paula Pyron, Executive Director, NW Industrial Gas Users, has to say about her constituents' needs.
For more information please visit:
http://www.ziffenergyconferences.com
call 1-800-853-6252,
or email us at gasconference@ziffenergy.com 
 
Bob Brooks
GPCM Natural Gas Market Forecasting System
http://gpcm.rbac.com