Power generation demand was rising only marginally as conditions remain rather mild across Canada and most of the northern half of the U.S. However, the cash market used prior-day screen support, expectations of a very low storage injection in the previous week (and quite possibly another unusual midsummer pull), and the quite strong cooling load being experienced throughout the southern U.S. to record sizeable gains across the board Wednesday.
With the region expecting a huge shot of returning supply Wednesday from the return of Opal Plant operations from a one-day outage, it was natural that gains tended to be smallest in the West. Otherwise, few of the increases fell short of half a dollar. Overall, they ranged from a little more than 15 cents to nearly 70 cents.
However, a snag with Opal start-up probably will have some who nominated gas there for Wednesday facing possibly sizeable negative imbalances as a result. Opal nominations for Wednesday flow had returned to 978,000 MMBtu/d after going to zero Tuesday, according to analysis by Bentek Energy (https://intelligencepress.com/features/bentek/). But a spokesman for plant operator Williams Field Services said a late beginning of Tuesday’s maintenance had delayed the return of operations. As of nearly 4 p.m. CDT Wednesday (with the gas day nearly a third gone), he said, “We expect to be processing again later today.” There will “definitely” be gas flowing again at Opal Thursday, he added.
Kern River, which receives the bulk of its supplies from Opal, indicated that the 24-hour shutdown (and the restart delay) would affect its system flexibility through Thursday’s gas day. It was reporting low linepack in its two farthest upstream segments Wednesday after having been at normal linepack levels the day before.
A couple of news reports Wednesday bolstered the case for anticipating a net withdrawal from storage for the week ending Aug. 4. Edison Electric Institute said that last week the U.S. had set its second power demand record in three weeks because of the widespread heat wave. And although LDCs normally see their all-time high send-outs established during the winter, Columbia Gas of Virginia said it exceeded its winter peak demand record last week, experiencing the three highest single demand days in its nearly 160-year history (see related stories).
First Enercast Financial predicts that a storage build of 7 Bcf will be reported Thursday . However, the Reuters news service survey of 19 industry players found a consensus expectation of a 1 Bcf decline. Estimates ranged from a 14 Bcf withdrawal to an 1l Bcf of injections, Reuters said.
Cash prices will continue to get support from the screen Thursday after the September contract soared just shy of half a dollar Wednesday to $7.651, although that represented a pullback from a substantially higher peak (see futures story).
Although the Northeast is generally enjoying very comfortable weather after its heat ordeal during the first half of last week, it actually may be contributing a small bit of heating load to the market. Lows dipped into the 40s early Wednesday at several locations, The Weather Channel said, and a second cold front from Canada will be moving southward into the Northeast Thursday, “reinforcing this early taste of fall.” Despite this, the trend is more toward rising cooling load again as Boston’s high is expected to rise from just below 80 Wednesday to the mid 80s Thursday.
Ironically, Waha was one of the rare western points to rank among Wednesday’s top gainers. But it was easy to understand why, with Waha supplies being pulled in three directions — intrastate Texas, the Midcontinent/Lower Plains and the desert Southwest — to help feed gas-fired peaking generation units coping with sizzling temperatures.
El Paso shippers are losing considerable market flexibility while the San Juan Crossover gets shut down Thursday and Friday for modifications of Line 1300 (see Daily GPI, Aug. 2). The crossover, which has a base capacity of 620 MMcf/d, takes gas southeastward from the North Mainline near Gallup (NM) Station to a South Mainline interconnect near Plains (TX) Station. In a bulletin board posting, El Paso assessed the impact: “San Juan Basin gas supply will not be available to schedule to points east of Lincoln Station, including Plains, North of Plains, the Anadarko area, Permian area and Waha. Permian area gas supply scheduled to points at Plains (IMUSTANG, INN30PLA and IW40-043) and in the Anadarko area will not be scheduled during the San Juan Crossover shutdown.”
El Paso-Permian also was one of the West’s strongest points Wednesday with a rise of about 60 cents. A spokesman said the pipeline was “still monitoring” the low linepack situation that had been reported Tuesday (see Daily GPI, Aug. 9).
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