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ANGA comments on LPSC examination of natural gas contracts

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Hydrocarbon Engineering,

ANGA has submitted comments to the Louisiana Public Service Commission commending them on the development of proposals that provide for an array of long term gas procurement instruments, and identifying a number of design characteristics that the organisation believes are important to the ultimate success of these long term arrangements.

“On behalf of its eighteen independent natural gas producing member companies, America’s Natural Gas Alliance appreciates the opportunity to provide comments on the Louisiana Public Service Commission Staff’s proposed general order: long term natural gas hedging pilot programme,” the statement reads.

“We commend the Louisiana Public Service Commission (LPSC) and staff for developing a proposal that provides for an array of long term gas procurement instruments, recognising the benefit of allowing the market place to come forward with a variety of price and contract structures. Although we recognise the LPSC is not mandating that utilities enter into long term arrangements, by providing a fair, flexible, timely, and transparent process for utilities and LDCs to enter into long term natural gas projects, the Commission will allow the marketplace to deliver contract structures that meet the stated objective of price stability and predictability, delivering benefits to Louisiana consumers. We recognise that it is up to producers and marketers to offer cost effective products that meet the LPSC’s stated policy goals. Our members are committed to developing long term products for counterparties and the commission to analyse.

“As recognised in the Proposed Order, long term natural gas contracts should not be considered as an attempt to beat the spot market on any one day. Rather, these contracts can play a role in a portfolio strategy designed to deliver price stability and predictability for a portion of a utility’s gas needs.”

Read the ANGA’s comments in full here.

Adapted from press release by Rosalie Starling

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