Flow Past Kingsgate restricted to 1.79 Bcf/d
GTN, Kingsgate’s low cost widens greater than 30 cents
Strong BPA hydropower era might soften impression
An unplanned outage on Gas Transmission Northwest pipeline system will limit flows previous Kingsgate for the foreseeable future, the pipeline operator mentioned, limiting inflows of Western Canadian pure gas into the Pacific Northwest and increasing money GTN, Kingsgate’s low cost to money Henry Hub.
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Gas Transmission Northwest declared a pressure majeure occasion late within the afternoon of May 16, after the day by day buying and selling session closed. The pipeline skilled an surprising compressor station failure at Station 3 close to the US-Canadian border, in accordance to a essential discover posted that day.
Flows previous Kingsgate will likely be restricted to 1.79 Bcf/d efficient May 17 till additional discover, down from a full operational capability of round 2.65-2.7 Bcf/d. Kingsgate is one among two essential routes for gas to circulate south into the Pacific Northwest from Western Canada.
Pricing impression
GTN, Kingsgate spot gas noticed its low cost to money Henry Hub flare out to $1.86 in May 17 buying and selling, preliminary settlement knowledge from Platts exhibits. GTN, Kingsgate fell 6.50 cents to $6.36/MMBtu at preliminary settlement, whereas many different regional spot gas costs noticed features of 20-35 cents.
The constraint limiting gas export capability to the US was mirrored in different Canadian spot gas costs. Cash Westcoast Station 2 additionally noticed its unfold to money Henry Hub widen, buying and selling down 29 Canadian cents at C $6.82/GJ on the Intercontinental Exchange as of the afternoon on May 17.
The Kingsgate circulate restrictions additionally helped increase California and Southwest spot gas costs, which noticed 35-65 cent will increase upon May 17 preliminary settlement. Pipeline nomination knowledge exhibits that gas deliveries to the Pacific Gas & Electric system from Gas Transmission Northwest dropped 165 MMcf on May 17, rising California’s reliance on inflows from the Rockies and Permian Basin.
Prior to the unplanned outage, Gas Transmissions Northwest had scheduled upkeep work for many of May that was set to limit flows previous Kingsgate to 2.12 Bcf/d for May 7-28. The constraint helped widen GTN, Kingsgate’s unfold to money Henry Hub to common $1.43 low cost to date this May, double the 71-cent low cost averaged in April.
Outlook
The pricing impression of the Kingsgate circulate restrictions might be partially softened by stronger hydropower era within the Pacific Northwest, though forecast colder temperatures might increase residential-commercial demand.
Hydropower era within the Bonneville Power Administration footprint has risen considerably just lately, averaging 195 GW/d over the past seven days (May 10-16), up from 144 GW/d in the course of the prior seven days (May 3-9). Month-to-date hydro era has averaged 180 GW/d, up from 164 GW/d throughout the identical time in 2021. Stronger BPA hydropower era permits for elevated energy exports from the Pacific Northwest to California, which helps ease the state’s gas-fired energy era demand.
The National Weather Service forecast below-normal temperatures for Washington, Idaho, and Montana in its six- to 10-day outlook, with the colder climate spreading south to embrace Oregon within the eight- to 14-day outlook.