Hurricane Irene turned out the lights on millions of East Coast residents and in doing so cut demand for natural gas by about 2.8 Bcf, according to an analysis by Bentek Energy LLC.
On Monday the firm said in a note that the storm dropped gas demand by 1.3 Bcf in the Northeast since Saturday and another 0.8 Bcf of demand loss was expected. About 0.7 Bcf of demand had been lost in the Southeast.
"...[O]ver the past four days the system impacted every state along the East Coast," Bentek said. "While there was no reported storm damage to gas pipeline infrastructure, the loss of demand from downed power lines, electricity outages and evacuations had an impact on gas pipeline balancing and regional gas production."
Analysts at Canaccord Genuity Inc. also noted the storm's gas demand destruction. "...[G]as-fired generation has declined by 2-plus Bcf/d over the past couple days, with the heaviest declines, not surprisingly, occurring in the Southeast and Mid-Atlantic regions," the firm said Monday. "At the same time, precautionary refinery shutdowns in conjunction with activity-limiting flooding suggest industrial demand is likely to see some degradation in these regions as well.
"Putting it all together, Irene was clearly a net bearish event for the gas complex and, depending on the length of outages, will likely lead to a cumulative natural gas demand loss of 30-plus Bcf over the next couple [of] weeks."
Bentek noted that Tennessee Gas Pipeline was investigating possible flood damage from to a flow regulator on its 300 Line at mainline valve 334 in New York. "In addition to the impacts of flooding, the abrupt demand loss from the storm could further impact pipeline flows, storage activity and production," the firm said.
Delays in repairing the region's power grid and restoring demand in heavily populated areas could continue to put downward pressure on basis and natural gas prices through the middle of the week, Bentek said.
©Copyright 2011 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.