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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: stevedhu who wrote (81374)	12/11/2000 10:15:45 PM
From: Think4Yourself	Read Replies (3) \| Respond to of 95453

A "must read" for NG related investors. Canada Gas Pipelines Seen Lacking Capacity to Temper Prices By Gene Laverty Calgary, Alberta, Dec. 11 (Bloomberg) -- Natural-gas prices are soaring in the U.S. Northwest, partly because of a lack of Canadian pipeline capacity to bring gas to California and nearby states, analyst Brian Prokop of Peters & Co. said. Canadian natural-gas producers have packed pipelines as prices have risen 12-fold from a year ago. Westcoast Energy Inc., the leading shipper of gas from Canada to the Western U.S., has filled its pipelines to capacity, spokesman Bob Foulkes said. ``They're maxed out, absolutely,'' Calgary, Alberta-based Prokop said. ``It's not a matter of while the price is high the market's going to balance it off by putting more supply there. This is all the supply there is and now they're competing for it.'' Alberta supplies about 15 percent of U.S. gas demand. Pipeline construction to the western U.S. has lagged in the past decade with prices around $2 per million British thermal units . ``Nothing new has been put into California,'' Prokop said. ``Everything was focused to the east and nothing to the west. The higher price will cause people to build, but there's a lag time for people to build the infrastructure.'' Vancouver-based Westcoast, Canada's No. 3 pipeline company, is shipping about 2.5 billion cubic feet of gas a day through its western delivery points, Foulkes said. Gas at the Westcoast's Huntington hub at Sumas, Washington, the main delivery point for California-bound gas, fell $12.50 to $28 a million British thermal units. That's more than $25 above last year's price of $2.32 per million British thermal units. Sumas, about 120 miles north of Seattle, is near Canada's border. At Alberta's AECO hub, where gas is shipped to U.S. Midwest and eastern markets, prices rose $3.97 to $11.97 per million British thermal units, more than six times last year's price of $1.90. A group of companies that includes Houston-based Coastal Corp. and Williams Cos. of Tulsa, Oklahoma, started operating the $3 billion Alliance pipeline to the U.S. Midwest Dec. 1. Westcoast and Enbridge Inc., Canada's No. 2 pipeline, are partners in the 1,857-mile line that carries gas to delivery points near Chicago. Cold weather also hampered Alberta's gas output today. Temperatures that fell to around minus 30 Celsius (minus 22 Fahrenheit) caused gas wells to freeze up, limiting the supply available at major delivery points. Production fell by about 2 billion cubic feet over the weekend, and cold weather is expected to continue for the next week. Westcoast shares were unchanged at C$34, and Enbridge fell C$1 to C$41.25 in Toronto. Coastal rose 63 cents to $79.38, and Williams rose 25 cents to $36.81 in New York. Gas rose 83 cents to a record $9.41 per million British thermal units on the New York Mercantile Exchange.