Message-ID: <14681749.1075860898226.JavaMail.evans@thyme> Date: Fri, 8 Feb 2002 09:48:23 -0800 (PST) From: rebrooks@earthlink.net To: rebrooks@rbac.com Subject: GPCM News: 2/8/02: New Deepwater Pipelines Start Up: Nukes SetRecords: EIA Says Prices to Stay Low Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Robert E. Brooks X-To: 'GPCM Distribution' X-cc: X-bcc: X-Folder: \Kim_Watson_Mar2002\Watson, Kimberly\E-mail Bin X-Origin: Watson-K X-FileName: kwatson (Non-Privileged).pst From http://www.enerfaxgold.com : Williams Starts Up New Deepwater Pipelines in Gulf of Mexico Williams has begun receiving oil and natural gas into recently completed deepwater pipelines in the western Gulf of Mexico. First deliveries of oil were received January 28th and first deliveries of natural gas were received January 30th from the Nansen Field in the East Breaks area, located about 150 miles south of Houston in 3,700 feet of water. The pipelines have a capacity of up to 80,000 bpd of oil and up to 360 MMcf per day of natural gas. Initially, deliveries into the line are expected to average about 20,000 bpd of oil and about 10 - 15 MMcf per day of natural gas. Production will continue to increase as new wells are tied in during the 1st and 2nd quarters. The pipelines will also serve a neighboring development in the Boomvang Field. Production from Boomvang is expected to start flowing into the pipelines in May. Williams' $200 million East Breaks project is made up of a 56-mile oil gathering system, a 114-mile gas gathering system, a new state-of-the-art 300 MMcf per day natural gas processing plant in Markham, TX, and a shallow-water platform at Galveston Block A244. The new Markham natural gas plant has been fully operational since the 4th quarter 2001. From http://www.enerfax.com : Nuclear Power Plants Set Reliability and Output Records Invigorated by another year of record operating performance, the US nuclear energy industry believes its prospects for future growth are as good or better than ever. Estimates for 2001 show that the nation's 103 nuclear power plants set an electricity production record for the 3rd straight year, increasing their output to about 762 billion kWh. The plants' average capacity factor--a measure of efficiency--reached a record high for the fourth straight year, climbing 1% to 91%. Other than their ability to reliably produce large amounts of competitively priced electricity, nuclear power plants have several other desirable, valuable attributes, such as providing a high degree of forward price stability, an attribute with significant value in a volatile commodity market. Nuclear plants also have clean-air compliance value. With support from the Bush Administration and nuclear-related provisions included in major energy bills introduced in Congress, nuclear energy is receiving strong bipartisan political support. Nuclear power plants supply 20% of the electricity in the US. EIA Says Natural Gas Prices to Drop Through this Summer Natural gas prices will fall throughout the latter part of winter and continue to decline through the spring and early summer, according to the EIA. But the resulting decline in drilling would likely prompt a price recovery late this year or early next year. Assuming normal weather and barring any major supply disruptions, the average 2002 wellhead price should come be about $1.86 per MMBtu, the EIA reports in its latest short-term energy outlook. That estimate is down $0.19 from last month's forecast and less than half of last year's average. The mild winter and subsequent high storage levels have combined to keep prices down. Spot prices have remained in the $2.30 - $3.00 range. But all that is likely to change later this year, the EIA predictes. Weak industrial demand and excess underground storage levels should keep a lid on spot prices until next fall. Next year as economic growth accelerates and as world oil prices rise, natural gas prices will also rise, averaging $2.39 per MMBtu in 2003. Although, EIA forecasts seem to always be a bit late in responding to market changes and then seem to hang on to the current trend too long. Also, today's Gas Daily has an article discussing EEA's recent natural gas price forecast for the next two years. Bob Brooks GPCM Natural Gas Market Forecasting System http://gpcm.rbac.com