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To: Ed Ajootian who wrote (80666)	12/3/2000 5:59:56 PM
From: Second_Titan	Read Replies (1) \| Respond to of 95453

AGA data and Disaster on the Horizon Ed the point you made has been predicted by many. Two variables critical to these predictions have been weather and new incremental NG production. Both of these factors are supporting, so far, a disaster come February. Recall some of the points I believe from Simmons? At low storage levels the ability to deliver is hampered. I wonder how companies like CPN are managing fuel costs during commissioning. The risk for fuel cost during commissioning and start up can be placed on the OEM to some extent(GE, SWPC, MHI) or can be accepted by the owner. Also some times if a project may get zero revenue during testing and commissioning. It will be interesting to see how gas prices effect start up of new plants for projects that did not fully protect their fuel costs. Trying to commercialize a new plant during periods of maximum NG prices and maybe way off peak electric prices could be a disaster for some.

To: Ed Ajootian who wrote (80666)	12/3/2000 7:15:22 PM
From: excardog	Read Replies (2) \| Respond to of 95453

Ed you write: <Here's an interesting tidbit from the table. The cumulative draw from the coming week's storage in the prior year, to the low point for the winter (1008 on 4/14/00) was 1924. Let's just say Wednesday's storage number comes in at 2400, a draw of 102 BCF for the week (this is a conservative guess based on what I've been hearing). If you subtract 1924 from 2400 you get only 476 BCF projected to be left at the end of this winter, a dangerously low amount. And that 1924 BCF of draw happened in one of the warmest winters on record! The cumulative draw from the same date two years ago to the winter low was 1769, not much less than last year.> Now if you combine your thoughts with these: Re: question seventycents per gallon by: seventycentspergallon 11/29/00 1:12 pm Msg: 423 of 426 Since gas in California is trading $15.00 per mmbtu (day to day at present), those producers who can do so will shunt gas south instead of into Alliance. Now, IF Alliance starts as promised on Dec 1 after two "hold it!'s" in the past 60 days, then NG could make it to the Chicago area via Alliance. I'll believe Alliance when I see it. Currently, traders are selling gas off Alliance but they are not promising the gas will show up. Caveat emptor. Plus, if it gets real cold in Canada, that gas won't show up in desired amounts. But, because NG is so high priced now, ethane and maybe even propane rejection could start soon. Result: more NG in the market and less NGLs. That's bullish for NGLs if the weather gets cold as predicted. Demand during winter is about 76 BCF/day of gas. Currently, US produces 52 and we import 10 from Canada. So, 62 produced -76 consumed =s a -14 BCF a day we'll have to pull from storage. Winter has 151 days, so 151 X 14 =s 2,114 BCF needed from storage. We started with 2,700 bcf in storage, so 2,700 minus 2,114 ='s 586 bcf in storage at March 31, 2001. In order to not "run out" of gas before March 31, 2001, industry will have to quit burning gas for periods of time. Price makes industry quit burning gas as part of their process engineering. My calculations are that to "ration" gas via price means that the winter prices will have to AVERAGE higher than $6.80 for the winter. That means you're likely to see (no promises made here, however,...) $8.00 + natgas on the Nymex. Cold weather will speed up the withdrawals. It's a bad year to be a natural gas consumer. ---------------------------------------------- Ed your draw amounts should be closer to the truth at least for the next few weeks. Should winter hit more normal or lets say harder IMO we have a recipe for disaster. Rationing may be the least of our worries. Lets hope for some relief at least weather wise. Scott