Pipeline developments to disrupt Pacific Northwest gas inflows and spot gas prices

Strong points

GTN lifted Flow Past Kingsgate restrictions for July 10

Force majeure in segment 20 of Ruby Pipeline

The GTN, Kingsgate-Stanfield, Oregon, could shut down early next week as the Pacific Northwest receives more gas from western Canada, replacing some of the supply from the Rockies.

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TC Energy’s Gas Transmission Northwest will increase capacity through Kingsgate, the pipeline’s entry point for gas flowing into the Pacific Northwest from western Canada, to 2.25 Bcf / d starting July 10, according to a notice posted on the pipeline’s website on July 9.

Throughput capacity beyond Kingsgate was previously capped at 2.05 Bcf / d, which represents a potential increase of approximately 200 MMcf / d for flows between Canada and the Pacific Northwest. Historically, shippers have reacted quickly to increases in operational capacity at this stage. The full operational capacity of Flow Past Kingsgate is approximately 2.75 Bcf / d.

During the most recent phase of maintenance work on the GTN pipeline, flows from the Rockies increased to close the gap in regional supplies. Data from S&P Global Platts Analytics shows that flows between the Rockies and the Pacific Northwest have doubled in the past seven days to reach 825 MMcf on July 9, from around 410 MMcf on July 3.

Cash GTN, Kingsgate, gained 5 cents to hit a seven-day high of $ 3.10 / MMBtu during July 9 trading, according to preliminary settlement data. Stanfield, Oregon, also saw some momentum, gaining 10 cents to trade at $ 3.77 / MMBtu.

Operational capacity limits blew up GTN, spreading from Kingsgate to Stanfield, Ore., At a discount of nearly 70 cents. Higher throughput capacity beyond Kingsgate should help narrow this gap, with GTN’s spot price, Kingsgate, likely to gain ground against other regional pricing locations in the first half of the year. next week.

While increased flow capacity from Canada to the Pacific Northwest is one of the drivers for a likely decline in inflows to the Rockies, the new pipeline capacity restrictions on Ruby Pipeline will likely serve as a other engine.

Kinder Morgan’s Ruby Pipeline, which carries gas from the Rockies to the Oregon-California border, declared a force majeure event at the Roberson Creek Segment 20 compressor station effective gas day July 9, effective until further notice. Segment 20 is located in Wyoming, between Topaz Ridge and Gemstone Canyon points.

Force majeure is expected to limit the operational capacity of segment 20 of Ruby Pipeline from around 1.5 Gcf / d to around 550 MMcf / d, according to a critical opinion.

Data from Platts Analytics shows the restrictions may have already started to take effect, with deliveries from Ruby Pipeline to PG&E in Malin, Ore., Down 70 billion cf, or 13%, on July 9 to 485 billion cf. Preliminary settlement data from July 9 shows cash at PG&E, Malin, was trading 14.50 cents higher at $ 3.945 / MMBtu, which was a three-month high for the location.

About Keith Tatum

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