$7.49 is January 2008 Natural Gas Price

Natural gas in storage in the U.S. fell last week but is about 9.3 percent above the five-year average for this time of year, a government report said Thursday.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states fell by 12 billion cubic feet to 3.53 trillion cubic feet for the week ending Nov. 23.

The inventory level was well above the five-year average of about 3.23 trillion cubic feet in underground storage, and ahead of last year's storage level of 3.42 trillion cubic feet, according to the government data.

In morning trading, natural gas for January delivery rose 0.5 cent to about $7.49 per 1,000 cubic feet on the New York Mercantile Exchange.

Four Corners Natural Gas Plant Fire is Re-Routed

Williams Partners L.P. today provided an update on the status of its Ignacio Gas Processing plant following the fire at the facility earlier today.

This morning around 3:30 a.m. Mountain Standard Time, a cooling tower at the plant caught fire, damaging it and a few adjacent buildings. The plant has been shut down and the fire has been extinguished. There were no injuries as a result of this incident.

The Ignacio plant is part of Williams Four Corners LLC, which is owned by Williams Partners. Williams (NYSE: WMB) operates the facility, which is located near Durango, Colo., and has a processing capacity of approximately450 million cubic feet per day (MMcfe).

The partnership and Williams have re-routed approximately 100 MMcfe of the plant's normal production capacity to other facilities in the San Juan Basinand continue to work on re-routing additional production capacity. Inaddition to the Ignacio plant, the Four Corners gathering system is connectedto the Kutz and Lybrook natural gas processing plants and the Milagro andEsperanza natural gas treating plants in northwestern New Mexico. The FourCorners system's normal volumes are in excess of 1.5 billion cubic feet perday (Bcfe) and approximately 350 MMcfd has been affected as a result of thisoutage.

Alberta Royalty Increases Discourages Another

Canadian Natural Resources (TSX: CNQ) has cut its Canadian conventional crude oil and natural gas capital budget by one-third to $1.7 billion for 2008, citing the impact of higher Alberta royalties on energy production.

"Of the reduction in capital spending, 78 per cent or $645 million is due to a reduced drilling program in Alberta largely as a result of the impact of the royalty review changes," the Calgary-based company said Tuesday.

In October, Alberta Premier Ed Stelmach said the province would go ahead with some of a royalty panel's recommendations, choosing to take $1.4 billion in additional revenues instead of the proposed $2 billion.

Several major energy companies had warned that royalty increases would discourage their investment in Alberta's resources.

"The new royalty regime introduced by the province of Alberta, effective for 2009, will take the vast majority of any increases in natural gas prices for most of our natural gas wells," John Langille, vice-chairman of Canadian Natural Resources, said in a release.

"As such, the ability to increase natural gas drilling activity with increasing gas prices is severely impacted."

He said the natural gas side of the business is faced with eroded economics due to low prices, along with a new royalty regime that reduces the returns on certain types of drilling.

Shotgun Natural Gas

Shotgun Energy Corporation (OTCBB: SGNE) owns an undivided 85% working interest in the giant gas field lease in the prolific natural gas producing Uinta Basin, located in the U.S. Rockies, Utah. The lease comprises 13,189 acres with a potential 4 trillion cubic feet recoverable gas and is over-pressured by a 0.55 - 0.85 gradient.

According to available data in the area, the prospect property has been delineated using several hundred miles of seismic data. The results of the 2D Seismic program which was recently completed will be processed along with available data from a previous Texaco Seismic shoot which will add to the confidence in the interpretation of the data. "We feel the data supports a basin-wide deep gas accumulation covering the entire field," states Robert Klein, President of Shotgun Energy Corporation.

This giant gas lease borders other leases owned by EOG Resources Inc., EnCana Corp., and Bill Barrett Corporation, nearby. Major energy companies today recognize that tight gas reservoirs, where geological formations make production complex, and coal-bed methane, where gas is extracted from coal deposits, are two of the more important near term sources to boost North American production of natural gas as demand outstrips supply and drives up prices.

The U.S. Geological Survey estimated (in 1995) basin-center and deep-basin gas resources in the Rocky Mountain Laramide basins to be 250 TCF. The Drunkards Wash Field, just south of the prospect area, is estimated to be between 2-4 TCF of recoverable gas. The Jonah Field Overpressured Gas Plain, which is analogous to our prospect area, has similar over-pressuring, depth, reservoir rocks and is estimated to be 2.5+ TCF. Several similarities exist between the Elmworth field in Alberta, Canada (one of the most prolific gas fields in North America) and the Company's Uinta Basin Over-pressured Gas Prospect. In addition, Shotgun Energy Corporation has a 0.70% (0.70 of 1%) proportionate, reducible, Gross Overriding Royalty interest in the LAK Ranch Oil Project located in Newcastle, Wyoming. This royalty interest equates to $0.63 per barrel based on a price of $90.00 per barrel for Shotgun.

Turkmenistan Natural Gas

Turkmenistan plans to increase its natural gas price for Russia by 30% from US $ 100 to US $ 130 per 1000 cubic meters, Kommersant newspaper quoted Gasprom chief executive Alexei Miller as saying following the talks with Turkmen President Gurbanguly Berdimuhamedov yesterday.

"Our Turkmen partners raised the issue of the need to increase purchase prices for its gas at least by 30% as early as 2008," the head of Gasprom said. He noted that the supplier's initiative is understandable and said it was "not surprising".

According to Kommerstan, the price hike will cost Ukraine who buys all Turkmen gas from Gasprom extra US $ 1,26 billion as minimum.

Alexei Miller explained that the European Commission and the US state administration insisted that the purchasing price for Turkmen gas should be increased and that according to Gasprom estimates the average wholesale price of gas for European consumers will grow to US $ 354 per 1000 cubic meters of gas by the end of 2008.

Natural Gas Drilling Requires Neighborhood Approval

More than 300 Grand Prairie homeowners packed into a sweltering school cafeteria recently, seeking information about natural gas drilling in the western portions of Dallas County's Barnett Shale.

Before companies can start drilling under neighborhoods, they must get approval through leases from a majority of residents. But the firms may face one of their most unlikely obstacles yet: 63-year-old Doranna Corley.

Mrs. Corley is the leader of a grassroots movement to assemble Grand Prairie's underrepresented neighborhoods – some of which haven't organized in decades – to inform residents about gas well drilling. Spurred by a bad experience with a drilling company, she launched her door-to-door campaign, issuing fliers and planting yard signs. The first meeting drew more than 400 people.

Her plan is to organize a committee that will represent Grand Prairie residents who are not in a homeowners association.

"I'm actually working for the underdog right here," said Mrs. Corley, who recalled the unpleasant moment when she was escorted out of a recent lease-signing event after asking questions about her own lease offer. "We have no money behind us; we don't have professionals behind us. We're just out here trying to do the best we can for these people who don't have anybody helping them."

LNG from Nigeria to Germany

E.ON AG's (NYSE:EONGY) Ruhrgas unit plans to import liquid natural gas (LNG) to Germany from Nigeria to lessen its dependence on Russian gas, Westdeutsche Allgemeine Zeitung reported, citing Dietrich Gerstein, who is in charge of LNG purchasing at E.ON.

Nigeria may be the most important market in western Africa for E.ON Ruhrgas, Gerstein told the newspaper.

Iran, which also has a high priority for E.ON, is currently not a viable natural gas market for E.ON due to unfavorable political circumstances, he said.

Other countries which may be interesting the company are Egypt, Libya, Algeria and Mauritania, all of which have large natural gas reserves and are geographically close to Europea, he said.

Some 35 pct of natural gas in German last year came from Russia, Westdeutsche Allgemeine said.

Chevron Selling Natural Gas Storage Business

Chevron, the listed US oil major, has engaged CIBC World Markets to assist with the potential sale of its natural gas storage business, a source close to the situation told mergermarket. The sale information memorandum for the business, which could fetch more than USD 1bn, will be sent out this week, a source with knowledge of the situation said. First round bids will likely be received before Christmas, and the deal should be finalized in early to mid Q1.

Based in northeastern British Columbia, Canada, the Aitken Creek Gas Storage facility has a current working gas capacity of 71Bcf, with expansion potential to approximately 118 Bcf.

The business previously belonged to Unocal, and does not fit with Chevron’s exploration and production focus in Canada, the person familiar said. The facility generates more than USD 100m in EBITDA, the person familiar said, and gas storage assets have been selling for around 10x – 11x EBITDA, according to several industry sources.

The facility will appeal to commodity trading groups, as it provides market information, and is not an annuity asset that would attract a typical midstream master limited partnership (MLP), the person familiar said. A buyer will need a large amount of working capital and a strong tolerance for market risk, the person added.

UBS received the teaser, a source with knowledge of the situation said, and will look at the deal. Goldman Sachs, a major commodity trader, looks at natural gas storage facilities, a second source with knowledge said, but declined to comment further. A Calgary-based attorney noted Goldman Sachs looks at “everything that moves” in Canada, particularly since its oil and gas group opened an office in Calgary.

Natural Gas Up in the U.S. of A.

Natural gas in storage in the U.S. grew last week and is about 8.7 percent above the five-year average for this time of year, a government report said Wednesday.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states grew by 4 billion cubic feet to 3.54 trillion cubic feet for the week ending Nov. 16.

The inventory level was well above the five-year average of about 3.26 trillion cubic feet in underground storage, and ahead of last year's storage level of 3.45 trillion cubic feet, according to the government data released a day early due to the Thanksgiving holiday.

In afternoon trading, natural gas for December delivery rose by more than 14 cents to about $7.62 per 1,000 cubic feet on the New York Mercantile Exchange.

Canadian Natural Gas Reserves Up in 2007

Western Canada's natural gas reserves have not gone into decline yet, according to the Canadian Association of Petroleum Producers' (CAPP) latest estimate.

The group's annual tally shows Canada's natural gas reserves as of Dec. 31 last year increased marginally to 58.2 trillion cubic feet, with additions replacing about 104% of 2006 production.

In fact, Canada's natural gas reserves have remained relatively flat for the past seven years, despite rising production.

Natural Gas Report from Rice University

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated natural gas is already an important fuel in the United States, representing 22 percent of total primary energy use in 2006. About 20 percent of that gas was imported, the vast majority from Canada. Liquefied natural gas (LNG) imports have risen from virtually zero in 1986 to just in excess of 0.5 trillion cubic feet (tcf), or 2.9 percent of total U.S. natural gas consumption in 2006. The United States imports LNG from a variety of countries, including Trinidad and Tobago, Egypt, Nigeria and Algeria.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated according to the new study, under a business-as-usual scenario, where U.S. lands are not opened up for drilling, by 2030, U.S. consumers could be relying on LNG imports for as much as 30 percent of total supply. This has strong implications for security of natural gas supply, as the United States becomes more reliant on LNG from the Middle East and Africa. U.S. end-use natural gas demand is expected to climb to 23.9 (tcf) in 2015 and 26.9 tcf by 2025, up from 20.0 tcf in 2006, according to study forecasts. This represents a gain of about 1.3 percent per year.

"Studies of the market outlook show that our high cost domestic production will increasingly have to compete against a swath of more competitively priced imports," said Kenneth Medlock, fellow for energy studies at the Baker Institute and a key author of the study. "In the short term, the net impacts on U.S. supply security are not all that worrisome. But long term, as our demand grows, we will have to worry more about security of supply."

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated in recent years, environmental and land-use considerations have prompted the United States to remove from energy development significant acreage that was once available for exploration. Twenty years ago, nearly 75 percent of federal lands were available for private lease to oil and gas exploration companies. Since then, the share has fallen to 17 percent.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated given the importance of the changing outlook for North American natural gas supply and U.S. oil and natural gas prices, the Baker Institute embarked on a two-year study, "Natural Gas in North America: Markets and Security," to investigate the future development of the North American natural gas market and the factors that will influence security of supply and pricing.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated the Baker Institute Energy Forum developed a world gas trade model. The Baker Institute World Gas Trade Model (BIWGTM) simulates future development of North American natural gas trade based on the economics of resource supply, demand and commodity transportation, and it determines a market-clearing price in the process.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated to determine whether the United States and its allies will become vulnerable to increasing market power of major international natural gas suppliers, like Russia and countries of the Middle East, and the role that existing drilling restrictions in the United States play in this question, scenario analysis is utilized to determine the possible effects of a complete lifting of restrictions on drilling in the Rocky Mountains and Outer Continental Shelf (OCS). The aim of these scenarios is to examine whether the impact of the increase in natural gas production from these now blocked U.S. regions would reduce the monopoly power of any potential large supplier or group of large suppliers and, similarly, would ameliorate the impact of a major accidental disruption of natural gas supply.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated the Baker Institute's scenario analysis shows that opening restricted areas in the OCS and Rocky Mountains to drilling and natural gas resource development will not render the United States energy independent nor will it even lower U.S. dependence on liquefied natural gas (LNG) imports in 2015 by a significant volume. Price impacts are also limited, with U.S. prices only registering marginal reductions.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated but longer term, the study concludes, an opening of restricted areas to drilling and the contribution of expanded OCS and Rockies natural gas production could, nonetheless, be geopolitically important in combating the rise of a cartel in the international natural gas market, a so-called "GasOPEC." According to the study,

"Reducing U.S. demand for LNG helps lower global natural gas prices and enhances available supplies for other major buyers in Europe and Northeast Asia. The wider swath of alternative supplies for Europe and Northeast Asia translates into significantly reduced market power of producers in Russia and the Middle East. Furthermore, the higher elasticity of supply from alternative sources as a result of allowing greater access to resources in the United States also reduces market power in the sense that a larger reduction in cartel supply would be needed to achieve any given increase in price." The study also notes that development of alternative energy could play a similar role.

A new report was released on November 20, 2007 from Rice University and its Baker Institute for Public Policy that stated one more surprising key finding of the study is that an opening of restricted areas for drilling for natural gas could have significant impacts on the flow of natural gas from Alaska to the lower 48 states. Under a business as usual scenario, where there is greater access to resources in the lower 48, the study finds that there would be delays in the development of the Alaska gas pipeline, reducing Alaskan production by as much as 0.95 tcf in 2025 (or a 40 percent reduction) relative to the case where access restrictions remain in place.

Saudi Natural Gas Explosion

A gas pipeline exploded today in Saudi Arabia killing 28 workers.

“The fire broke out while contractor workers were linking a new pipe [to the pipeline during maintenance late Saturday,]" Aramco said in a statement.

The blaze was extinguished early Sunday and occurred on the Haradh-Uthmaniyah pipeline about 18 miles from the Hawiya Gas Plant, Saudi Aramco, the state oil conglomerate.

According to the Wall Street Journal’s web site, “Aramco is building a natural gas liquids, or NGL, plant at Hawiyah, about 170 miles east of Riyadh, which will have the capacity to treat 3.8 billion cubic feet a day of natural gas to produce dry gas, NGL and ethane, all of which will be used to feed nearby industries, notably petrochemicals.”

The Aramco statement also said emergency response teams were immediately mobilized to deal with the explosion and that the lines that were involved have been isolated. Yet it seems gas supply was not interrupted by the incident.

The Reuters web site elaborated on the cause of the incident. “The state oil company said in a statement the fire was caused by a gas leak in the pipeline around 30 km (18 miles) from the natural gas liquids plant.” The site also gave more information on those who perished in the conflagration. “Western diplomats said most of the dead appeared to be Asian workers along with at least one Lebanese national. They said no Western victims had been identified.”

China & Russia Natural Gas Nearing Completion

China's largest oil and gas company CNPC and Russian gas giant Gazprom have reported a major progress in their natural gas negotiations, Gazpom's deputy chairman Alexander Medvedev said here Saturday.

The negotiation, which touched on rising prices of crude oil and gas pipes on the international market, was constructive but the two sides hadn't agreed on specific prices, said Medvedev.

However, big progress was made in the negotiation, which paved the way for a future agreement on specific prices, he said.

"I believe we will finally get a result that is acceptable to both sides."

Medvedev said earlier in the day that the negotiation on the Russian gas prices would not be influenced by the low prices at which China had imported natural gas.

CNPC and Gazprom entered into a strategic partnership in October 2004. The two companies signed a deal in march 2006 to export natural gas to China.

Under the deal, Russia will pipe 68 billion cubic meters of natural gas to China each year by 2020.

Natural Gas China Up 50%

China raised ex-factory natural-gas prices for some industrial users by about 50% to curb growing demand by chemical companies and power generators for the clean fuel, the country's two largest gas producers said Thursday.

The rise in the prices that producers charge buyers of natural gas is in line with government efforts to prioritize use of limited supplies of the gas in order to reduce urban pollution.

It also reflects government efforts to narrow the gap between relatively low domestic gas prices and much higher external gas prices, a task driven by China's growing use of imported liquefied natural gas.

Fertilizer companies, which are heavy users of gas, are excluded from the price increase, possibly because the government wants to protect low-income farmers, who are the main users of fertilizers.

United States Natural Gas Storage Down Today

The amount of natural gas in storage in the U.S. fell last week and is about 8.4 percent above the five-year average for this time of year, a government report said Thursday.

The Energy Department''s Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states fell by 9 billion cubic feet to about 3.54 trillion cubic feet for the week ending Nov. 9.
The inventory level was well above the five-year average of more than 3.26 trillion cubic feet in underground storage, and ahead of last year''s storage level of 3.45 trillion cubic feet, according to the government data.

In morning trading on the New York Mercantile Exchange, natural gas for December delivery fell 13.8 cents to $7.702 per 1,000 cubic feet.

GE Financial Buys Into Natural Gas

Southwestern Energy Co (SWN.N: Quote, Profile, Research) said it agreed to sell its natural gas distribution unit to an affiliate of GE Energy Financial Services and Alinda Investments LLC for $224 million.

The unit, Arkansas Western Gas Co., serves about 151,000 residential, commercial, and industrial customers in northern Arkansas and owns more than 5,700 miles of gathering, distribution and transmission pipelines.

Natural Gas Stocks Up

Some natural-gas stocks received a boost Tuesday as Banc of America initiated coverage of the sector at "Neutral" but highlighted as top picks companies with infrastructure investments, liquefied natural gas assets and master limited partnerships.

"We favor stocks with transparent, low-risk, project-driven growth that can benefit from changing industry dynamics," analyst Elvira Scotto said in a note Monday evening.

Scotto issued "Buy" ratings for Sempra Energy, Spectra Energy Corp., Equitable Resources Inc., Cheniere Energy Inc. and Northwest Natural Gas Co.

Sempra shares rose 25 cents to $59.51 as Spectra rose 50 cents to $24.66; Equitable rose $1.34 to $53.35; and Northwest rose 84 cents to $48.90. However, Cheniere fell 45 cents to $39.25.

Scotto expects Sempra earnings to rise by about 7 to 8 percent through 2011, based on its "fairly predictable" growth catalysts. Spectra has the "right assets in the right locations," Scotto said, with pipelines and storage facilities in high-growth areas across the U.S.

Equitable's drilling program will be a catalyst for its growth as Cheniere, an LNG company, benefits from expansion of the LNG market, Scotto said. Northwest's advantages as a utility are that it has a strong outlook for customer growth and a favorable regulatory environment, she added.

Of "Neutral"-rated companies, Oneok Inc. and Southern Union Co. "face the greatest earnings risk," Scotto said, due to overexposure to volatile commodity prices.

Oneok shares rose 13 cents to $48.82 as Southern Union ended flat at $30.95

El Paso Natural Gas - Speaks Today

Byron Wright, vice president, Corporate Development, of El Paso Corporation , will present tomorrow, November 13, at the Wachovia Liquefied Natural Gas Conference in Houston, Texas at 8:35 a.m. Central Time. An audio webcast and presentation slides will be available on the Investors page of El Paso's Web site at http://www.elpaso.com. Presentation slides will be available about one hour before the presentation.

El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner. The company owns North America's largest interstate natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com.

Natural Gas Choice of Home Owners

It's a bad time to be a heating oil customer.
Not only are they paying record-high prices to heat their homes, they're also being blamed by some for the region's dependence on foreign oil and for contributing to global warming.

Natural gas delivery companies say they have the answer: Convert to gas. The companies say that the price of natural gas is significantly lower than heating oil right now and that switching to "green natural gas technologies" will help prevent climate change.

Steve Holliday, the chief executive of National Grid PLC, the British company that recently purchased Keyspan Energy Delivery, the state's largest gas utility, says his company's 53 percent market share in the Greater Boston area should be closer to 90 percent.

"Natural gas is way out there as the cleanest fossil fuel there is," Holliday said. "There's a huge opportunity here to clean things up by burning natural gas."
In the struggle for supremacy in New England between heating oil dealers and natural gas utilities, everything right now is going the way of natural gas. Gas is cheaper, more versatile, more secure, and, by some measures, more environmentally friendly.
US Census data indicate nearly half of Massachusetts households already use natural gas, while roughly 35 percent use heating oil. Gas utilities have taken market share away from heating oil dealers over the last decade, but the pace of oil-to-gas conversions has slowed.

National Grid numbers indicate conversions within the Keyspan territory reached a peak of 16,800 in 2003, when the company was giving away standard-size boilers and furnaces to homeowners who switched to gas. After the giveaways were replaced with a program offering new customers discounts on boilers and heating oil tank removals, conversions fell to 10,900 in 2006 and were off 9 percent through the first nine months of this year.

The target market for conversions tends to be homeowners who are facing a significant outlay of money to replace an aging boiler or furnace, but that's not always the case.

Natural Gas Choice of Home Owners

It's a bad time to be a heating oil customer.
Not only are they paying record-high prices to heat their homes, they're also being blamed by some for the region's dependence on foreign oil and for contributing to global warming.

Natural gas delivery companies say they have the answer: Convert to gas. The companies say that the price of natural gas is significantly lower than heating oil right now and that switching to "green natural gas technologies" will help prevent climate change.

Steve Holliday, the chief executive of National Grid PLC, the British company that recently purchased Keyspan Energy Delivery, the state's largest gas utility, says his company's 53 percent market share in the Greater Boston area should be closer to 90 percent.

"Natural gas is way out there as the cleanest fossil fuel there is," Holliday said. "There's a huge opportunity here to clean things up by burning natural gas."
In the struggle for supremacy in New England between heating oil dealers and natural gas utilities, everything right now is going the way of natural gas. Gas is cheaper, more versatile, more secure, and, by some measures, more environmentally friendly.
US Census data indicate nearly half of Massachusetts households already use natural gas, while roughly 35 percent use heating oil. Gas utilities have taken market share away from heating oil dealers over the last decade, but the pace of oil-to-gas conversions has slowed.

National Grid numbers indicate conversions within the Keyspan territory reached a peak of 16,800 in 2003, when the company was giving away standard-size boilers and furnaces to homeowners who switched to gas. After the giveaways were replaced with a program offering new customers discounts on boilers and heating oil tank removals, conversions fell to 10,900 in 2006 and were off 9 percent through the first nine months of this year.

The target market for conversions tends to be homeowners who are facing a significant outlay of money to replace an aging boiler or furnace, but that's not always the case.

Retail Natural Gas Customers - Prices Neutral

As oil prices surged over the last few months, natural gas prices in the United States did something that could help to cushion the economic shock. They fell.

A result is that those who heat their homes with natural gas — by far the dominant fuel in the United States — will see prices roughly in line with last winter’s. But for those who use heating oil, as many do in the Northeast, prices seem likely to be about 50 percent higher than they were last winter.

Oil and gas prices have never moved in lock step, in part because each has different users. But the bigger reason is that one is part of a global market and the other is not.

Florida Natural Gas

A deepwater port project that could supply a quarter of Florida's natural gas received a green light at the completion of the U.S. Coast Guard's draft environmental impact statement.

The Coast Guard determined that Suez Energy North America's proposed Calypso LNG Deepwater Port poses little impact to area marine life, air and water quality, and geological resources. The project is in a 30-day public comment period, at the end of which it will move to the governor's office for approval.

Natural Gas in Storage Today - 3.55 Trillion Cubic Feet

It was reported today that the natural gas in storage in the United States grew last week and is approximately 8.9 percent above the five-year average for this time of year, a government report said Thursday.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories that are being held in underground storage in the lower 48 United States increased by 36 billion cubic feet to about 3.55 trillion cubic feet for the week ending November 2, 2007.

The natural gas inventory level was well above the five-year average of more than 3.25 trillion cubic feet in underground storage, and ahead of the year-ago level of 3.45 trillion cubic feet as well, according to the government data.

In morning trading, natural gas for December delivery fell more than a penny to about $7.61 per 1,000 cubic feet on the New York Mercantile Exchange.

Petrobras Maintains Natural Gas Holdings in Bolivia

Bloomberg.com is reporting tonight that Petroleo Brasileiro SA, Brazil's state-controlled oil company, plans to invest in Bolivia to maintain current shipments of natural gas at 30 million cubic meters a day.

Output would fall if Petrobras, as the company is known, doesn't invest to maintain fields and explore for new ones, Petrobras President Jose Sergio Gabrielli said today at a news conference in Brasilia. Petrobras canceled some plans to invest in Bolivia after the country forced it to sell refineries.

Texas Gas Leaks in the Home

Over the last five years, CenterPoint Energy’s gas operations throughout the state has not experienced the types of incidents recently reported by other Texas utilities and which have been linked to problem compression couplings that lack any internal restraint against pull-out of the pipe. These problem fittings constitute a subset of a much broader category of “compression couplings” that have been widely and successfully used by the gas industry for decades.

The manufacture, installation and maintenance of gas systems are subject to a number of industry-recognized engineering standards designed to minimize the risk of failures. The federal pipeline safety rules adopted in 1971 incorporate many of these engineering standards and require that gas distribution companies utilize leak survey, leak response and failure analysis procedures to timely identify all potential leak sources on their systems and implement appropriate corrective action. CenterPoint Energy operating practices have consistently met or exceeded these standards.

The overwhelming majority of major leaks are caused by third parties that fail to call before they dig or respect the markings of our pipe in violation of state law and Railroad Commission regulations. We did experience an incident in Missouri City in 2007 that has been linked to an unauthorized compression coupling that appears to have been installed by a third party in a manner inconsistent with CenterPoint Energy’s standards.

Today, the Railroad Commission initiated rulemaking proceedings on leak surveys, leak grading and replacement of certain compression fittings used on some meter installations. We will actively participate in these rulemakings and are evaluating the Commission’s directive on compression fittings and determining how to best respond. We look forward to working with the Commission to insure that we operate one of the safest gas distribution systems in the nation.

CenterPoint Energy has an active program to educate both the construction contractors and the public on how to avoid damaging our lines during excavation and what to do if a leak occurs. Anyone contemplating excavating should first contact the Texas One Call system at the new FCC-mandated number of 811 or the Texas One Call number of 1-800-545-6005. If you smell natural gas you should:

Leave immediately. Do not use electric switches, telephones (including cell phones) or anything that could cause a spark.

Encana Buying Out Natural Gas Partner

DThreetechnology.com is reporting today that one of Canada's most profitable oil and gas companies, EnCana Corp., said Monday it will pay 2.55 billion Canadian dollars (2.73 billion U.S. dollars) to buy out a partner's 50 percent stake in a fertile U.S. natural gas field.

DThreetechnology.com is reporting today that the Calgary-based company said it is buying the half interest in the Amoruso field held by privately owned Leor Energy, located in eastern Texas.

DThreetechnology.com is reporting today that EnCana president and chief executive Randy Eresman said the field, which produces more than 215 million gross cubic feet per day, is centered in one of the fastest-growing natural gas areas in North America, the Deep Bossier formation.

DThreetechnology.com is reporting today that "These assets are a seamless fit with our existing production and operations, and they hold tremendous growth potential in the near and longer term," Eresman said in a statement.

Canadian Natural Gas - Part 4

Sun Media of the edomonton.com website is reporting that the high value of the Canadian dollar is only exacerbating problems in an industry beleaguered by stagnant natural gas prices and by changes imposed by the royalty review, industry watchers said yesterday.

As government officials fret and watch the chunk they get from the oilpatch get smaller thanks to the new-found strength of the Canadian dollar, the tribulations of a strong dollar are only the latest in a series of problems besieging the natural gas sector, said DeltaOne Capital analyst Peter Linder.

"This is going to have a very negative effect, particularly on the natural gas sector," said Linder of the high-flying Canadian dollar.

Alberta Premier Ed Stelmach recently warned that the strength of the Canadian currency was eating away at the province's take from natural gas.
The government's concern surrounds the fact that natural gas prices have remained stagnant and, thanks to the high dollar, Albertans are getting less cash today than they were for the same amount of the resource six months ago.
When gas sold for $7 US per gigajoule and the dollar was at 70 or 80 cents, the exchange rate meant Albertans got close to $9 Cdn per unit.

When the same unit now sells for the same price, thanks to the exchange rate, Albertans are getting just over $6 Cdn, which translates into millions in losses.
"We've had flat gas rates for the last five or six months, while the loonie has gone up 20%," said Linder.

"Companies have already cut back in drilling and exploration because of the price of natural gas.

Natural Gas Beats Heating Oil for Home Owners

The Associated Press is reporting that with his furnace sputtering its final gasps, Charles Comito decided it was time to trade in his heating oil system for natural gas this year in 2007. The switch cost Mr. Comito $4,400, a price he says will be worthwhile in the chilly months ahead.

"It was for the convenience and cost," said Comito, a 71-year-old resident of Little Egg Harbor, N.J., who lives in a three-bedroom ranch-style home.

The Associated Press is reporting that with oil topping $90 per barrel, some homeowners are weighing whether the price tag for switching to a natural gas furnace makes sense. The home owners major decision may depend on a variety of factors, including the availability of natural gas lines, an issue in the Northeast, where gas pipelines have historically been less common.

The Associated Press is reporting that costs vary depending on the size and location of the home, but switching a typical three-bedroom house from heating oil to natural gas might run an average of $5,000 to $6,000 and the removal of an oil tank, which some local governments offer rebates for, might run an average of $2,000 additionally.

The Associated Press is reporting that since early 2006, heating oil has been more expensive than natural gas and is currently nearly double the cost, according to Tim Evans, an energy analyst with Citi Futures Perspective. On Thursday, the price of crude oil, which has surged 20 percent in one month, reached a record of $96 per barrel.

The Associated Press is reporting that while natural gas prices are also rising, the Energy Department says those who rely on heating oil will face much higher prices this winter, while those who use natural gas should only see a moderate price increase. Heating oil customers will pay an average of $319 more this winter than last, while natural gas customers are forecast to pay $78 more for heat between October and March.

Billionaire Keeps Oil Sands Project

D Three Technology Blog is reporting today that Canadian oil industry giant Canadian Natural Resources Ltd. has responded to Alberta's new royalty regime with a slap and a tickle.

Canadian Natural Resources Ltd created and controlled by billionaire Murray Edwards is shifting its plans for natural gas drilling, saying it will move production to British Columbia, West Africa and the North Sea. It will however keep its oil sands investment plans, which amount to more than $20-billion and are the future of the company.

Yesterday, Canadian Natural Resources Ltd prominently declared it would cut its gas drilling in 2008 by about 40 per cent because of higher royalties to be imposed in Alberta starting in 2009. The natural gas cut is less than the 67 per cent that the company had previously said it would make but still a major blow to the sector as it begins its winter drilling season.

Canadian Natural Gas - No Go, Tax Too High

The canadianpress.com, operated and reported by Google.com has reported that the Canadian Natural Resources Ltd. (TSX:CNQ) plans to drill as much as 50 per cent fewer natural gas wells next year because of Alberta's planned royalty increases, which were announced last week and go into effect in early 2009.

"The new royalty program will have a negative impact on our development plans in 2008 and onward, the extent of which we are still attempting to fully define. As a result we will continue to adjust our activity to ensure that we are optimizing our plan," CNQ chairman Allan Markin said in a conference call Thursday.

"One of our greatest strengths is our flexibility and, in the light of the pending changes to the royalties, this flexibility and breadth of options has become even more important to maintain our focus on maximizing returns to our shareholders."

China Natural Gas Prices Going Up 10%

Website www.ndrc.gov.cn which is the government of China website reported today from Beijing on Thursday that China's natural gas prices are "seriously low" and China plans to adjust costs for industrial users and retail prices for car drivers soon, following a 10 percent rise in fuel costs on Thursday.

"China's natural gas prices are seriously low, and supply contradictions are very obvious," the National Development and Reform Commission said in a statement posted on its Web site.

"In order to restrain the overly fast increase in industrial projects using natural gas and the blind development of cars changing from using oil to using gas...the measures for adjusting natural gas pricing will be implemented in the near future."