Tuesday, September 29, 2009

Texas company linked to Mexican oil smuggling

EDINBURG, Texas - An Edinburg gas company has joined the growing list of U.S. businesses linked to selling petroleum stolen from Mexico’s state-run oil monopoly.
Arnoldo Maldonado of Y Oil and Gas pleaded guilty on Sept. 25 to one count of conspiring to receive and sell stolen natural gas condensate illegally tapped from pipelines run by PetrĂ³leos Mexicanos (Pemex).
According to filings in a Houston federal court, Maldonado, from January to March, arranged three separate shipments of condensate he knew to be stolen. Using 22 tanker trucks, the company shipped the stolen product through unspecified land crossings with the intent to sell it to larger businesses in the oil and gas trade.
Maldonado’s arrest makes him the second Texas oil executive to face criminal charges in the two-year-old investigation.
In May, Donald Schroeder, president of Houston-based Trammo Petroleum, pleaded guilty to purchasing millions of dollars in stolen condensate and arranging for it to be shipped north on barges departing from Brownsville.

Chesapeake Energy launches pipeline company limited partnership

FORT WORTH, Texas - Oklahoma City-based Chesapeake Energy, which has a large regional office in Fort Worth, said late on Sept. 24 that it will raise $588 million in cash by selling half its natural gas pipelines in the Barnett Shale of North Texas, as well as properties in other petroleum basins.
Chesapeake, a major Barnett gas producer, said it has entered into a definitive agreement to form a joint venture with Global Infrastructure Partners, a New York-based private equity fund. Chesapeake will contribute the Barnett Shale pipelines and processing facilities, called "midstream assets," to the new Chesapeake Midstream Partners Llc.
GIP will pay $588 million for its 50 percent interest in CMP, and Chesapeake will retain the other half.
Chesapeake said in May that it was in talks with four potential bidders for a $500 million stake in its Barnett Shale midstream properties.
Chesapeake will contribute substantially all of its midstream assets in the Barnett Shale as well as most of the company’s nonshale midstream assets in the Arkoma, Anadarko, Delaware and Permian basins. The transaction is expected to close this month.
The deal will provide additional money for Chesapeake’s operations.
Chesapeake has large lease holdings in major shale gas plays such as the Barnett, the Haynesville in Louisiana and the Marcellus in the Appalachian area in the eastern United States.

Monday, September 28, 2009

AARP loses motion in Atlanta Gas Light surcharge case

ATLANTA, Ga. - The Georgia Public Service Commission on Sept. 8 denied a request to force Atlanta Gas Light Co. to disclose information on a planned $400 million pipeline system upgrade requested by one of the project’s critics.
Commissioners voted 4-1 to reject a “motion to compel” filed by AARP Georgia after AGL officials objected to answering questions about the gas utility’s plan to boost the capacity of pipelines throughout metro Atlanta and of three liquefied natural gas (LNG) storage facilities in Cherokee and Rockdale counties and the city of Macon.
The 10-year project would be financed by increasing a surcharge the utility already is collecting for a pipeline replacement program.
During a brief debate, Commissioner Bobby Baker introduced a motion to reject a PSC staff recommendation to deny AARP’s request.
Although the AGL proposal is not a typical rate case, Baker argued that the utility raised issues normally associated with such proceedings.
“(The costs of) capital projects typically are recovered through ratemaking,” he said. “If parties like AARP can’t have an opportunity for discussion at this time, they’ll never have an opportunity.”
But commission Chairman Doug Everett said AARP submitted more than 140 questions, so many that forcing AGL to respond would unnecessarily slow the process.
“Some of the questions were, frankly, ridiculous,” added Commissioner Chuck Eaton.
Everett said AARP lawyers will have adequate opportunity to ask questions during two days of PSC hearings on the AGL project, which began on Sept. 9.
Commissioners defeated Baker’s motion, then voted to uphold the staff’s recommendations.

Atlanta Gas Light says pipeline plan would boost service

ATLANTA, Ga. - Speaking before the Georgia Public Service Commission, company executives of Atlanta Gas Light (AGL) said approval of the first three-year phase of the gas pipeline improvement plan would decrease the risk of outages for about 160,000 AGL customers in seven metro Atlanta communities: Gwinnett, Henry and Paulding counties, and Marietta, Conyers, Cumming and Newnan.
AGL said the planned expansion of pipeline capacity and natural gas storage facilities would reinforce its ability to provide gas service even if temperatures dipped to 10 degrees.
Expansion is necessary to meet the demand for gas that has increased with population growth in some areas outside the Perimeter, the company said.
The project has attracted attention because of its cost and because the utility has proposed to pay for it through a surcharge on ratepayers rather than making a standard rate recovery case before the PSC.
Critics, including consumer advocates, maintain that surcharge cases require less scrutiny of a company’s proposal, and that they can lead to overcharges.
Residential customers would pay an additional surcharge of 95 cents a month if the project is approved, on top of an existing monthly surcharge of $1.95. That fee pays for a pipeline replacement program AGL started in 1998.

Friday, September 18, 2009

Enterprise Products Partners to serve Eagle Ford Shale operator

HOUSTON - Enterprise Products Partners has entered into a long-term agreement to provide natural gas transportation and processing services in the developing Eagle Ford Shale play in Texas.
The agreement covers more than 150,000 acres in the heart of the Eagle Ford Shale play. Stretching from the Mexico border along the Gulf Coast to near Louisiana, the Eagle Ford Shale covers more than 10 million acres in Texas and lies beneath or near the Enterprise Products Partners' energy assets in the region.
Michael Creel, EPP president and CEO, said: "This agreement represents another significant initiative in our ongoing strategy to strengthen Enterprise's position in the very promising Eagle Ford Shale, which has shown early success… Our integrated network of energy infrastructure in the region is strategically positioned and well-suited to accommodate the Eagle Ford Shale's extremely NGL-rich gas and will serve as a platform for additional growth opportunities, as well as incremental investments to expand our system as activity in this emerging play increases."
The completion of expansion projects at two of the partnership's seven South Texas processing plants during the first quarter of this year increased total processing capacity of the facilities to more than 1.5 billion cubic feet per day.

Thursday, September 17, 2009

Florida governor OKs Port Dolphin Energy deepwater port LNG project

TAMPA BAY, Fla. – Florida Gov. Charlie Crist has approved Port Dolphin Energy’s deepwater port project that would supply natural gas to Florida.
As part of the federal permitting process, Crist is required to support, oppose or say he takes no position for the proposed liquid natural gas receiving terminal, a release said.
Port Dolphin plans to build a deepwater port in the Gulf of Mexico 28 miles west of Manatee County. Tankers would dock at the port and link up with a liquid natural gas pipeline that transports gas to Port Manatee and then inland, eventually connecting with the state’s natural gas pipeline grid.
The project is expected to generate more than $150 million in direct economic impact to Port Manatee and Manatee County during the next 20 years, the release said.
Construction is scheduled to begin in 2011.

Wednesday, September 16, 2009

Tesoro moves first oil to Pacific on reversed Panama line

HOUSTON - Tesoro Corp. shipped its first barrels of crude oil from the Atlantic to the Pacific Basin on a reversed Panama pipeline, the company said on Aug. 27.
Reversal of the 81-mile (Petroterminal de Panama pipeline, which formerly flowed from the Pacific to the Atlantic, creates a new oil conduit from the Atlantic to the Pacific and gives Tesoro access to more crude for its refineries in California, Washington, Hawaii and Alaska, the company said.
"In addition to exposing Tesoro to an array of crude oils typically marketed in the Atlantic Basin, our abilities to utilize the tankage dedicated for Tesoro's exclusive use at PTP and the reversed pipeline are expected to afford our company strategic advantages related to freight, storage, blending, and delivery scheduling optimization," said Doug Koskie, vice president of arbitrage trading for Tesoro
Refining and Marketing Company.

Tuesday, September 15, 2009

House T&I panel berates PHMSA for hazmat permitting record

WASHINGTON - The Transportation Department’s Pipeline and Hazardous Materials Safety Administration that oversees pipeline and other transport of hazardous materials has a lax permitting policy and maintains too cozy a relationship with the industry it regulates, according to the findings of congressional and Office of the Inspector General investigations that were released on Sept. 10 during a House oversight hearing.
PHMSA's oversight of hazardous materials transportation has raised safety concerns, Transportation and Infrastructure Chairman James Oberstar (D-Minn.) and DOT Inspector General Calvin Scovel III said at the hearing.
"This agency needs a house cleaning," Oberstar said. "Safety is not a one-time snapshot; it's continued vigilance... and this agency has lost its way and along the way has developed a very cozy relationship with the industry it regulates."
The five-year-old agency has been issuing permits without reviewing companies' prior incident and enforcement histories and has been generous in issuing and regulating special permits, which authorize activities not covered under hazardous materials regulations.
Among other accusations, Oberstar and Scovel said PHMSA in some cases does not know where the special permits are being used; grants them to trade organizations that can pass them along to members in a blanket fashion; and relies on self-certification by the special permit applicants.
Sixty-five percent of the nonemergency special permits studied in the investigation were either incomplete, lacking evidence showing the applicant's safety record or were nonexistent, according to the inspector general's report. And of the 16 companies that held the majority of the special permits studied, none fully complied with the terms and conditions of the permits.
"Regulating and monitoring the movement of hazardous materials is a critical part of ensuring the safety of the nation's transportation system, and it is PHMSA's role to properly assess all risks before allowing applicants to participate in commerce under special permits and approvals," Scovel said.

Sunday, September 13, 2009

Williams gets FERC approval to expand natural gas pipeline to Southeast

TULSA, Okla. - Natural gas producer Williams Companies, Inc., on Sept. 9 revealed the Federal Energy Regulatory Commission's approval for the proposed expansion of its Transco natural gas pipeline by 308,500 dekatherms per day to serve markets in the southeastern United States.
The expansion will be conducted in two phases. Construction of the first phase will begin this fall, while the second is expected to get underway next summer.
In the first phase of pipeline expansion, the Tulsa -based Williams expects to increase capacity by 90,000 dekatherms per day and in the second phase by 218,500 dekatherms per day.
The company also expects the 85 North project to require construction of approximately 22 miles of 42-inch pipeline for the proposed expansion, in addition to a new 20,500 horsepower compressor facility in Anderson with modifications to existing compressor facilities. Project facilities are expected to cost nearly $248 million.
The Transco pipeline is a 10,500-mile pipeline system that transports natural gas to markets throughout the northeastern and southeastern United State. With the current expansion, the total system capacity is expected to increase nearly 8.5 billion cubic feet per day.

Friday, September 11, 2009

U.S. businessman gave recording of corrupt Ecuadorian judge to Chevron

SAN RAMON, Calif. - Chevron Corp., battling a $27 billion environmental lawsuit in Ecuador, said it may pay the legal bills of a U.S. businessman whose secret recordings of meetings with the judge on the case led the jurist to step down.
Californian Wayne Hansen used a pen equipped with a tiny camera to record meetings he had in May and June with Judge Juan Nunez in Ecuador, Chevron admitted on Aug. 31.
Hansen told the judge he was seeking contracts for his company to clean up oil contamination if Nunez ruled Chevron was responsible for environmental damage in the Amazon Basin, according to Chevron’s translation of the conversations, which were in Spanish.
Chevron alleges that Nunez disclosed his intention to rule against the company at the meetings. Ecuador Prosecutor General Washington Pesantez said on Sept. 8 that the recordings, which Chevron provided to the government, show Nunez told Hansen that he would have to wait until Nunez issued a decision to find out the ruling. Pesantez said he’s investigating the matter.
If Hansen “incurs future legal costs related to this matter, it would only be fair that we consider assisting him,” Kent Robertson, a Chevron spokesman, said in an e- mailed statement.
Chevron paid for Ecuadorean contractor Diego Borja, who also attended and recorded the meetings with Hansen, to leave Ecuador and is providing him with financial support, Robertson said on Sept. 1, without disclosing specific amounts.
Borja and Hansen were asked to pay a $3 million bribe by a political operative in Ecuador’s ruling party to get pollution cleanup contracts, Chevron says the recordings show.
Hansen declined to comment and referred questions to San Francisco criminal defense attorney Mary McNamara, who confirmed that she’s representing him.

Thursday, September 10, 2009

Pipeline limited partnerships rank-ordered by yield

The following list rank-orders pipeline limited partnerships from the ones with the highest annual yield to those with the lowest annual yield. Data is as of the market close on Sept. 4, 2009, before the long Labor Day weekend.
Linn Energy LLC. (LINE) – developer of oil and gas properties. Attractive 11.88 percent dividend yield.
Ferrellgas Partners LP (FGP) – distributor of propane and related equipment and supplies. Attractive 10.24 percent dividend yield.
Amerigas Partners LP (APU) – retail propane distributor play was. Attractive 9.71 percent dividend yield.
Teekay LNG Partners LP (TGP) – natural gas and crude oil shipping play. Attractive 9.69 percent dividend yield.
Inergy LP (NRGY) – seller, distributor, storage, marketing, trade, processing, and fractionation of propane, natural gas, and other natural gas liquids company. Attractive 9.59 percent dividend yield.
Duncan Energy Partners LP (DEP) – transporting, marketing, and storing natural gas company. Attractive 9.41 percent dividend yield.
Enbridge Energy Partners LP (EEP) – oil & gas pipeline play. Attractive 9.21 percent dividend yield.
Kinder Morgan Management LLC (KMR) – energy transportation and storage company. Attractive 8.89 percent dividend yield.
Teppco Partners LP (TPP) – petroleum pipeline play. Attractive 8.88 percent dividend yield.
Energy Transfer Partners LP (ETP) – natural gas midstream play. Attractive 8.70 percent dividend yield.
Enterprise Products Partners LP (EPD) – midstream energy oil and natural gas services play. Attractive 8.15 percent dividend yield.
Buckeye Partners Ltd. (BPL) – refined petroleum products play. Attractive 7.95 percent dividend yield.
Boardwalk Pipeline Partners (BWP) – natural gas transportation and storage play. Attractive 8.32 percent dividend yield.
NuStar Energy LP (NS) – storage and transportation of petroleum products. Attractive 8.00 percent dividend yield.
Kinder Morgan Energy Partners LP (KMP) – energy transportation and storage company. Attractive 7.97 percent dividend yield.
Suburban Propane LP (SPH) – distributor of propane, fuel oil, kerosene, diesel fuel, gasoline, and refined fuels. Attractive 7.97 percent dividend yield.
Energy Transfer Equity LP (ETE) – engages in natural gas midstream, transportation, and storage; and retail of propane. Attractive 7.86 percent dividend yield.
Magellan Midstream Partners (MMP) – engages in the transportation, storage, and distribution of refined petroleum products. Attractive 7.83 percent dividend yield.
Plains All American Pipeline LP (PAA) – oil and gas storage and transportation play. Attractive 7.55 percent dividend yield.
TC Pipelines LP (TCLP) – natural gas transportation. Attractive 7.51 percent dividend yield.
Sunoco Logistics Partners LP (SXL) – transport and storage of refined products and crude oil player. Attractive 7.42 percent dividend yield.
Western Gas Partners LP (WES) – midstream natural gas play. Attractive 7.31 percent dividend yield.
Enterprise GP Holdings LP (EPE) – midstream energy play. Attractive 7.23 percent dividend yield.
NuStar GP Holdings, LLC (NSH) – transportation and storage of petroleum products play. Attractive 7.20 percent dividend yield.
Inergy Holdings LP (NRGP) – retail and wholesale propane supply, marketing, and distribution company approaching 52-week highs. Attractive 7.12 percent dividend yield.
El Paso Partners Pipeline LP (EPB) – operator of natural gas transportation pipelines, storage, and other midstream assets. Attractive 6.74percent dividend yield.
Magellan Midstream Holdings LP (MGG) – petroleum products transport and storage play. Attractive 6.52 percent dividend yield.
AGL Resources (AGL) – natural gas play. Attractive 5.02 percent dividend yield.

Wednesday, September 9, 2009

Florida county officials support compromise pipeline route

MANATEE, Fla. - Manatee County commissioners said on Sept. 3 that they will support a compromise route for the proposed Port Dolphin pipeline, but only with conditions. Among them: That the county be allowed to remove high-quality beach sand in the natural gas pipeline’s proposed path before it is built.
That’s the position the county plans to submit to the U.S. Coast Guard, which is taking public comment on a draft environmental study of Port Dolphin Energy LLC’s $1 billion proposal.
The company wants to put a platform 28 miles from shore, where ships would unload liquefied natural gas. The gas then would be shipped through the pipeline, which would come ashore at Port Manatee and connect with existing land pipelines for distribution.
County and Longboat Key officials initially objected to the pipeline’s original proposed route because it would cross prime sources of sand for beach renourishment. The company later agreed to move the pipeline farther north but not far enough in the eyes of town officials, who continue to explore possible legal action.
“We are pleased that there is a potential resolution for us to move sand out of the way in advance,” said Bruce St. Denis, Longboat Key’s town manager.
Port Dolphin officials also have said they are willing to help the county get the sand by paying the permitting costs, estimated at $400,000 to $500,000, as well as sharing in the dredging costs, said Charlie Hunsicker, the county’s natural resources director. The Florida Department of Environmental Protection also has indicated a willingness to reduce the permitting process from two or three years to as little as one year, he said.

Tuesday, September 8, 2009

Quanta Services to acquire pipeline service company Price Gregory

HOUSTON - Quanta Services, Inc., on Sept. 3 announced that it has agreed to acquire privately held Price Gregory Services, Inc., a leading natural gas and oil
transmission pipeline infrastructure service provider in North America, in a
cash and stock transaction valued at approximately $350 million.
Under the terms of the agreement, Quanta will issue approximately 11.1 million shares of Quanta common stock, valued at $250 million, and will pay approximately $100 million in cash, subject to adjustment, to the stockholders of Price Gregory.
Price Gregory is the leading energy infrastructure services provider of its
kind, specializing in the construction of large-diameter transmission
The acquisition of Price Gregory strongly positions Quanta as a leader in the North American energy transmission infrastructure market and will enable the company to take advantage of the positive long-term outlook for the natural gas industry.
"The acquisition of Price Gregory is a strategic move that will significantly
expand the scale and scope of Quanta's existing natural gas operations. We are
confident that the additional resources, expertise and client relationships
that Price Gregory brings will support our efforts to capture attractive
opportunities in the natural gas pipeline infrastructure market, which is
projected to grow significantly in the next decade and beyond," said John R.
Colson, chairman and chief executive officer of Quanta.
Prior to the global economic downturn, Price Gregory achieved revenues of more
than $1.41 billion and earnings before interest, taxes, depreciation and
amortization (EBITDA, a non-GAAP measure) of $258 million for the year ended
Dec. 31, 2008. Price Gregory is expected to achieve revenues between $1.1
billion and $1.2 billion and EBITDA between $170 million and $190 million for
the year ended Dec. 31, 2009, and revenues between $700 million and $900
million in 2010.

Friday, September 4, 2009

Latent hurricane damage investigated in Eugene Island pipeline accident

HOUSTON - Investigators are assessing whether latent damage from recent hurricanes contributed to the Eugene Island pipeline leak in the U.S. Gulf of Mexico in July, a federal pipeline agency spokesman said on Sept. 1.
Damon Hill, spokesman for the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA), said the issue is an ongoing concern after recent active seasons featuring several strong storms.
"We do know that a lot of pipelines were affected in the Gulf from past hurricanes, especially when Katrina and Rita came. There were a lot of after-effects," said Hill, whose agency is leading the inquiry.
The U.S. Minerals Management Service, part of the investigation team, acknowledges the possibility of undetected damage after offshore oilfields were raked by storms, notably Ivan in 2004, Katrina and Rita in 2005 and Gustav and Ike in 2008.
"So far, we have not seen a trend of damage showing up later. Of course, with back-to-back storms, it may be hard to determine," said Eileen Angelico, spokeswoman for MMS.
Pipeline operator Shell Pipeline, which has said it expects to have the line repaired and back in operation by late September, declined comment on potential causes.

Thursday, September 3, 2009

Energy Transfer Partners completes Texas, Colorado pipelines

DALLAS - Energy Transfer Partners, L.P. announced on Aug. 31 the completion of the 160-mile Texas Independence Pipeline. This new natural gas pipeline increases the Partnership`s take away capacity in Texas by an incremental 1.1 billion cubic feet per day.
Energy Transfer operates the largest intrastate pipeline system in Texas, with nearly 8,000 miles of pipeline in the state.
Energy Transfer has also completed the Rulison expansion project in Colorado.
The 42-inch Texas Independence natural gas pipeline serves the Bossier and
Barnett Shale natural gas resource plays in east and north central Texas.
Originating just west of Maypearl, Texas, and ending near Henderson, Texas, the
Texas Independence Pipeline connects the Partnership`s existing central and
north Texas infrastructure to its east Texas pipeline network. With the addition
of compression, the project may be expanded to transport natural gas volumes in
excess of 1.75 billion cubic feet per day.
"The completion of the Texas Independence Pipeline is another exciting milestone for us as it is our third 42-inch natural gas pipeline in Texas that allows
natural gas from Waha, the Barnett Shale and Bossier Sands to reach markets
throughout east and southeast Texas," said Roy Patton, senior vice president -
commercial, Energy Transfer Partners. "While we continue to build necessary
infrastructure in the Fort Worth Basin, our efforts remain equally focused on
expanding our system into other emerging natural gas fields, including the
Fayetteville and Haynesville, where previously announced pipeline projects
proceed as scheduled. We want to take our leadership position in the Barnett
Shale and leverage that in these new areas in order to continue to offer our
customers the unparalleled market access they have come to expect from us."
The Rulison expansion project includes the 10-mile, 24-inch Rulison pipeline and
the Holmes Mesa compressor station in Garfield County, Colo. These projects
are designed to increase the capacity of the Partnership`s South Parachute -
Rifle pipeline system. The project will also create a new outlet for producers
to access the Meeker processing plant at the White River Hub.
The Rulison pipeline will initially add more than 70 million cubic feet per day
of capacity, with the ability to expand to more than 200 million cubic feet per
day in the future. The Holmes Mesa compressor station has more than 9,000
horsepower of compression.

Wednesday, September 2, 2009

Kinder Morgan buying Crosstex gas assets for $266 million

HOUSTON - Kinder Morgan Energy Partners LP said on Aug. 31 that it will purchase the natural gas treating business of Dallas-based Crosstex Energy LP and Crosstex Energy Inc. for about $266 million.
The deal, which is expected to close in the fourth quarter, will make the Houston pipeline transportation company the largest provider of contract-provided treating plants in the United States.
KMP is purchasing approximately 290 amine-treating and dew-point control plants predominantly located in Texas and Louisiana, with additional facilities in Mississippi, Oklahoma, Arkansas and Kansas. The transaction will make KMP the largest provider of contract-provided treating plants in the United States.
“We are pleased to have the opportunity and financial strength to grow our company even during difficult economic times,” said Richard D. Kinder, chairman and CEO of KMP. “We look forward to offering natural gas treating services to our Texas intrastate customers and to other producers in various supply basins, including the rapidly developing shale plays.

Tuesday, September 1, 2009

Plains All American acquiring Vulcan Capital share in natural gas storage venture

HOUSTON - Plains All American Pipeline, L.P. and Vulcan Capital on Aug. 28 announced that they have executed definitive agreements under which a subsidiary of PAA will acquire Vulcan Capital's 50 percent indirect interest in PAA Natural Gas Storage, LLC (PNGS).
The aggregate purchase price of $220 million consists of $90 million cash, 1.9 million PAA common units valued at $90 million and deferred contingent cash consideration of up to $40 million. The contingent consideration is subject to achievement of certain events and performance milestones expected to occur over the next several years. The transaction is expected to close on Sept. 3, 2009.
As a result of the transaction, PAA will own all of the natural gas storage business and related operating entities, which will be accounted for on a consolidated basis.
The Partnership has historically accounted for its 50 percent indirect interest in PNGS under the equity method. At closing, PAA will repay the joint venture's outstanding project finance debt using joint venture cash and borrowings under its revolving credit facility. As of June 30, 2009, the joint venture had approximately $450 million of debt and approximately $52 million of cash.

U.S. natural gas storage near to full, worries of further price deflation grow

U.S. energy companies have been stuffing extra gas into salt caverns, aquifers and depleted oil wells. By the time winter heating demand starts to empty these reservoirs, analysts predict they will be brimming with record amounts of the fuel, possibly growing so full that gas backs up into pipelines.
The prospect of not enough storage could further deflate U.S. gas prices that have recently traded at seven-year lows.
Storage in the gas-rich producing region that stretches from Alabama to New Mexico has hit a record 1,074 billion cubic feet more than two months before the traditional end of the gas injection season.
The region is home to the Henry Hub, the Louisiana delivery point for gas futures on the New York Mercantile Exchange, where gas for October delivery on Aug. 26 traded at $3.27 per million British thermal units.
Options traders have recently stepped up bets that prices will fall below $2 per mBtu by then, and spot gas could drop even further if producers have nowhere to store their output.