Future Natural Gas Declines May Shut-In More State Wells / Hughes Tells Conference

Article excerpt

The spot market for natural gas will probably decline further this summer - raising the possibility that producers could b e forced to shut-in more state wells, says Charles F. Hughes, vice president of gas supply for Oklahoma Natural Gas Co. of Tulsa.

The "biggest impact" of natural gas on the state economy is its price at the wellhead, Hughes said.

"It could get to the point where producers shut-in wells and walk off," he said at a seminar on intrastate transportation of natural gas held as part of the 1986 Economic Outlook conference Thursday.

But the "bottom line" for the gas market's effect on Oklahoma's economy will be determined by how many interstate pipelines open their systems for transportation of gas for third-parties, says James O. Edwards, vice president of gas operations for Mustang Fuel Corp. of Oklahoma City.

Many state wells will be shut-in until those pipelines accept the "open-access" aspects of the Federal Energy Regulatory Commission's last ruling governing transportation of natural gas between states, Edwards said.

Huges and Edwards were panel members along with Phil L. Miller, vice president of natural gas marketing and supply for Transok Inc.

Hughes assured the audience that:

"Nothing much is going to happen" after FERC's Feb. 15 deadline for pipelines to choose to transport gas and forego transportation of "low-priority" gas on interstate systems.

The so-called 319 or "high-priority" gas contracts will be allowed to continue until contracts expire or until Oct. 31, 1987, Hughes said. …


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