Downed Arizona nuclear units boost Southwest spot gas prices

Downed Arizona nuclear units boost Southwest spot gas prices

Houston (Platts)--11Apr2006

Southwest spot gas prices climbed as much a quarter from Monday's
averages Tuesday, as some traders turned to the market for storage buying.
Other market players speculated that downed nuclear facilities within the
region were causing power plants to look to the spot gas market for answers.

"The southern path of [Southern California Gas] is quite a bit higher
than PG&E [South] on the power side," a California trader said, alluding to an
abundance of utilities in the marketplace. "That's telling me that there's
more demand down south. I think some nukes are down." Three of Arizona Public
Service's Palo Verde units are offline, all of which supply power to portions
of California.

Southern California Gas traded as high as 6.10/MMBtu, nearly 30 cents
higher than Monday, but fell into the high $5.90s/MMBtu as trading progressed.
The point averaged in the low $6.00s/MMBtu. Meanwhile, PG&E South averaged in
the mid-$5.90s/MMBtu, about 15 cents above Monday's midpoint. Elsewhere, a
"steady diet of storage injections" boosted buying in the production basins,
and El Paso's San Juan Basin jumped 25 cents on the day to average in the
mid-$5.80s/MMBtu.

The Pacific Gas and Electric city-gates proved slightly weak relative to
other price points, climbing around 15 cents from Monday, into the low to
mid-$6.30s/MMBtu.

---Bronwen Taylor, bronwen_taylor@platts.com

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