Florida Gas Transmission (FGT) is the primary company that supplies natural gas into the State of Florida. In 2002 the Federal Government issued an order that requires natural gas transmission companies to test their pipe for leaks in areas of "high consequence". This means FGT must perform testing in the Tampabay area, which includes Pinellas & Pasco County. FGT has not scheduled a specific time for testing in our area, however, it's expected to occur sometime in late 2005 or 2006. Clearwater Gas is working closely with FGT to determine the best method of testing and to make sure no outages occur due to this Federal mandated requirement.

CGS Expands into Central Pasco

Connerton, a 4,800-acre mixed-use master planned community in Central Pasco County, will be the first beneficiary of an agreement reached between Clearwater Gas System (CGS) and TECO Peoples Gas System. In the agreement, Clearwater Gas System will acquire new territory in Central Pasco County, allowing the company to provide natural gas service to the fast growing Land O’ Lakes area where Connerton is located. The agreement with TECO Peoples Gas covers land located between State Roads 52 and 54, east of the Suncoast Parkway and west of Ehren Cutoff (just west of I-75) and results in approximately 55 square miles of additional service territory for Clearwater Gas.

Natural Gas Prices Average Above $6 for 2004

Natural gas prices in 2004 were anything but predictable. We saw a range of $4.50 - $8.50 per million Btu (MMBtu) and an average of approximately $6.10/MMBtu. In fact, entire price range was experienced in early fall (ie, September to October) which is typically a stable period due to low heating & cooling demand. However this year was definitely an exception to the rule.

The predominant influence on natural gas this year was no doubt the increase in crude oil prices. Crude oil started the year at $35/barrel, peaked at $55 in October, and currently has settled in the mid-$45 range. This negative influence on the natural gas market has caused prices to remain high in spite of high storage levels. If crude were near $30 per barrel, the natural market would probably be in the $4-4.50 per MMBtu level. Unfortunately with crude remaining strong, there doesn’t appear to be any relief in the near future. Some analysts expect crude oil to remain above $40/barrel for 2005, which will keep natural gas prices elevated for the foreseeable future. In addition, any possible terrorist threats/concerns are going to impact the market.

The Energy Information Administration (EIA) reported that inventories were 3,027 billion cubic feet (Bcf) as of Friday, December 17. This is about 15% higher than the 5-year average. In addition, EIA has stated that natural gas prices will remain above $6 for 2005. Simply put, the economy is growing, gas demand is expected to increase and supplies will remain tight.