![](media/image1.jpeg){width="8.75in" height="3.6055555555555556in"}U.S.
DEPARTMENT OF ENERGY

**Office of Energy Assurance**

**ENERGY ASSURANCE DAILY**

###### June 21, 2004

**Highlights / Major Developments**

**Update -- Pinnacle West\'s Palo Verde Nuclear Units All Up and
Running** One of the three nuclear units began operating this morning
and the other two resumed operating over the weekend. As of 0800 this
morning two of the units were at full power. Christopher Martin,
Bloomberg News, 0930, June 21, 2004

**Electricity**

**Update \--Only Minor Fire Damage at Entergy Vt Yankee Nuke**

Entergy Corp. said Monday the fire damage to the main transformer at its
510 megawatt Vermont Yankee nuclear plant in Vermont was limited to the
outside of the transformer, leading electricity traders to guess the
unit would likely return to service in one to two weeks. In a statement,
Entergy said Vermont Yankee engineers determined the damage to the
plant\'s main transformer resulting from Friday\'s fire appears to be
limited to its external, overhead electrical ductwork and bushings which
connect the transformer with the electrical generator. The transformer
itself, which is located outside the plant, was protected during the
fire by an automatic water deluge system, Entergy said.

Reuters, 14:07 June 21, 2004

**Monticello 1 Nuclear Power Plant Shut For Repair, Company Says**

Xcel Energy's 600 Megawatt Monticello nuclear unit is undergoing
unplanned maintenance. The unit was shut Friday to repair a reactor
recirculation pump mechanical seal.

Bloomberg News, 1041 June 21, 2004

####### Salem 1 Nuclear Plant at Full Power After Repair, Company Says

####### PSEG Nuclear's 1,150 Megawatt Salem I nuclear unit was up to 100% capacity today. The plan resumed full operations over the weekend after repairing a pump check valve. 

####### Bloomberg News, 1009 June 21, 2004

####### Arkansas 1 Nuclear Plant Operating at Full Power, Company Says

####### Entergy Corp.'s 836 Megawatt Arkansas I nuclear unit was up to 100% capacity today after being down to repair a low-pressure turbine leak. 

####### Bloomberg News, 0956 June 21, 2004

####### Petroleum

**Valero Closes Gasoline Unit at Texas Refinery for Repairs**

Last week Valero Energy Corp. shut a gasoline-making unit at its McKee
refinery in the Texas panhandle for repairs. The fluid catalytic
cracker, which processes vacuum gasoil into gasoline and other light
fuels, was shut for six days of repairs, according to an e-mail from
Valero spokeswoman Mary Rose Brown in San Antonio. The repairs are
scheduled to be completed Monday, June 21. The McKee refinery can
process 170,000 barrels of crude oil a day. The catalytic cracker has a
capacity of 54,000 barrels a day.

Bloomberg News, 1659 June 18, 2004

Reuters, 1630 June 128, 2004

**Cat Cracker Problem in CA Pushes Gasoline Prices Higher** Shell has
confirmed that there is a problem with the cat cracker at its 162,500
b/d Martinez refinery in the Bay area. Unplanned maintenance started on
Friday morning. Traders said California spot gasoline prices shot up
more than 10 cents above Friday\'s prices in the San Francisco Bay
market on word the unit was shut.

Reuters, 1354 June 21, 2004

**Shell Says Shuts Deer Park, Texas, Hydrocracker**

Shell Oil Co.\'s joint venture 340,000 barrel per day refinery in Deer
Park, Texas, was producing less gasoline on Sunday because of a shut
hydrocracker, a spokesman said. The hydrocracker was shut on Saturday
morning when a valve failed, spokesman Dave McKinney told Reuters.
Repairs were continuing on Sunday and the unit is expected to restart on
Tuesday. n eight-week overhaul of instrumentation on the hydrocracker
began on June 7, McKinney said. The valve failure was unrelated to that
instrumentation overhaul.

Reuters, 1952, June 20, 2004

OPIS Price Watch Alert 1301 June 21, 2004

**Trinidad to Upgrade Refinery**

Trinidad and Tobago's state oil company Petrotrin plans a three-year
upgrade of its 160,000 b/d Pointe-a-Pierre refinery to increase output
of high-quality gasoline, a company official said.

Oil Daily, June 21, 2004

**Oil Slides as Iraq Resumes Some Exports**\
Oil prices fell a dollar on Monday as Iraq resumed limited crude exports
from its southern terminals after a six-day halt caused by sabotage
attacks. U.S. light crude for July delivery slid \$1.05 to \$37.70 a
barrel, more than \$4 off 21-year highs hit in early June. London\'s
Brent crude dropped 57 cents to \$35.64 a barrel. Prices fell as Iraq
resumed oil exports from its two southern oil terminals at a rate of one
million barrels per day, just over half normal levels, after repairing a
sabotaged pipeline. Iraq hopes to bring southern exports back to full
throttle within a few days, an oil official said.
<http://biz.yahoo.com/rb/040621/markets_oil_5.html>
<http://www.platts.com/Oil/News/4160483.xml?S=n>

**Norway's Crude Output Down 10% During Strike** In Norway, the world\'s
third biggest oil exporter, the government said on Monday that it had no
plans to order an end to four-day strike by oil workers lopping about 10
percent off the nations\' three million bpd output. The strike has so
far stopped about 315,000 bpd of Norway\'s output and is threatening to
expand to 455,000 bpd. About 200 workers have stopped working in a
dispute over pension rights, health problems with overnight shifts and
union demands for tighter restrictions on non-union labor.
<http://biz.yahoo.com/rb/040621/markets_oil_5.html>

**Iraq Attacks Test Market Tolerances**\
Last week\'s attacks on key pipelines in the north and south of Iraq
have reduced exports of around 1.6 million b/d to zero with no immediate
prospect that they will resume. While bad enough for Iraq, the export
outage has left world oil markets with a tiny sliver of spare capacity,
concentrated in Saudi Arabia, where security is also the top concern.
Petroleum Intelligence Weekly, June 21, 2004
<http://www.energyintel.com/PublicationHomePage.asp?publication_id=4>

**Is Saudi Oil Safe from the Enemy Within?\
**It is the oil market\'s worst nightmare and the stuff of political
thrillers. What would happen if terrorists bent on overthrowing the
Saudi regime actually succeeded in crippling the kingdom\'s oil
infrastructure? Recent terrorist attacks have been on soft targets \--
foreign oil service workers or military contractors \-- but one look at
Iraq, where last week\'s attacks shut off oil exports at a stroke,
illustrates the devastating potential of terrorism\'s extension from
human to economic targets. Petroleum Intelligence Weekly, June 21, 2004
<http://www.energyintel.com/PublicationHomePage.asp?publication_id=4>

**Explosion Hits Azeri Oil Pipeline in Russia**

An explosion hit a pipeline taking oil from Azerbaijan across Russia for
export early on Sunday, causing a fire and sending tons of crude spewing
out, emergency ministry officials said. The explosion occurred at about
1 a.m. in the southern Russian region of Dagestan about 112 miles from
the Azeri capital of Baku.

Reuters, 0620 June 20, 2004

#### Natural Gas 

**Transwestern Pipeline Conducts Unplanned Maintenance in Texas**

Transwestern Pipeline Co. performed unplanned maintenance at its WT-2
compressor station in west Texas. The capacity through the station has
been reduced by about 120 million cubic feet today to 480 million. A
water cooler pump must be replaced at the station, which should be back
at full capacity tomorrow.

Bloomberg News, 1109 June 21, 2004

**Alaska Gets Third Pipe Proposal**

TransCanada has submitted its plan to build a 48-inch natural gas
pipeline linking Alaska's North Slope to the Yukon and North America's
hungry gas market.

Oil Daily, June 21, 2004.

**FERC OKs Freeport LNG Terminal**\
Federal regulators late last week approved a new Gulf Coast liquefied
natural gas (LNG) terminal, the first since the December 2002 revamping
of their LNG regulatory policies that first allowed proprietary
terminals. Freeport filed for the permit with the Federal Energy
Regulatory Commission last March to build and operate a facility able to
produce 1.5 billion cubic feet of gas per day. Natural Gas Week, June
21, 2004 <http://biz.yahoo.com/ap/040621/freeport_approved_1.html>

**Williams May Expand Transco Line**

Tulsa-based Williams Cos. Inc. said Monday it is considering a \$180
million expansion of its Transco pipeline

system to meet rising demand for natural gas in the Northeast. The
proposed expansion would bring as much as

150,000 dekatherms a day of gas from a storage and pipeline hub in
Leidy, Pa., to New York and New Jersey.

<http://pro.energycentral.com/professional/news/gas/news_article.cfm?id=4938155>

**Energy Transfer Partners, L.P. Announces Completion of Bossier
Pipeline Project**\
Energy Transfer Partners, L.P. announced today that the previously
disclosed project to construct the Bossier Pipeline is now commercially
operational. The 78 mile, primarily 36 inch natural gas pipeline
connects to Energy Transfer\'s Katy Pipeline in Grimes County, Texas and
provides transportation for natural gas production from the Bossier Sand
production area. Approximately 400,000 mcf per day of natural gas
volumes have been committed by producers, which is anticipated to result
in \$25.0 million EBITDA annually to the Partnership

<http://biz.yahoo.com/bw/040621/215567_1.html>

####### 

####### Other

**Only 20% of European Ports Ready for July 1 Security Code Deadline**

Only around 20% of European ports are already in compliance with the new
worldwide shipping security code due to come into force July 1, shipping
sources said last week. Some major European oil ports that are said to
be near

or already compliant with the security code are Rotterdam, Gibraltar and
Antwerp, according to port and shipping officials surveyed by Platts. In
the Middle East, some major crude-exporting ports such as Ras Tanura and
Yanbu are also already complying with the code. However, according to a
spokesman for tanker owners\'\' association Intertanko, much less than
50% of the world\'s ports are likely to meet the Jul 1 deadline. The
International Maritime

Organization, an arm of the United Nations, will be enforcing the
code\--known as the International Ship and Port Facility Shipping Code
(ISPS)---starting July 1. While the IMO plans to be enforce the ISPS
code for all ships over 500 gross tons, it will not be enforcing the
code at ports. <http://www.platts.com/Oil/News/9311789.xml?S=n>

**Energy Prices**

+-------------------------------+-----------+-----------+------------+
|                               | **Latest  | **Week    | **Year     |
|                               | (6        | Ago**     | Ago**      |
|                               | /21/04)** |           |            |
+-------------------------------+-----------+-----------+------------+
| **CRUDE OIL**                 | 37.69     | 37.58     | 30.63      |
|                               |           |           |            |
| **West Texas Intermediate     |           |           |            |
| US**                          |           |           |            |
|                               |           |           |            |
| \$/Barrel                     |           |           |            |
+-------------------------------+-----------+-----------+------------+
| **NATURAL GAS**               | 6.42      | 6.15      | 5.68       |
|                               |           |           |            |
| **Henry Hub**                 |           |           |            |
|                               |           |           |            |
| \$/Million Btu                |           |           |            |
+-------------------------------+-----------+-----------+------------+

> Source: Reuters

**This Week in Petroleum** from the Energy Information Administration
(EIA)

[*http://tonto.eia.doe.gov/oog/info/twip/twip.asp*](http://tonto.eia.doe.gov/oog/info/twip/twip.asp)

Updated on Wednesdays

**Weekly Petroleum Status Report** from EIA**\
**[*http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html*](http://www.eia.doe.gov/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/wpsr.html)

Updated after 1:00pm (Eastern time) on Wednesdays

**Natural Gas Weekly Update** from EIA

[*http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp*](http://tonto.eia.doe.gov/oog/info/ngw/ngupdate.asp)

Updated after 2:00 pm (Eastern time) on Thursdays