Constrained

The physical market overall was unchanged Thursday, but that was due in large part to multi-dollar losses at constrained northeast pipelines such as Algonquin, Iroquois and portions of Tennessee. Omitting those losses from the equation results in a 6-cent market gain.

Physical natural gas prices fell a couple of pennies on average Wednesday, but if constrained market points in the East on pipelines such as Algonquin, Iroquois, Transco, and Tennessee were held out of the mix, then the overall market loss would increase to about a nickel. Futures trading was light and traders suggest now might be a good time to sell irrespective of Thursday’s inventory report. At the close of futures trading April fell 5.9 cents to $3.470 and May dropped 5.6 cents to $3.519.

The global liquefied natural gas (LNG) market is supply constrained, but that will change in the coming years as new liquefaction capacity comes online, including in North America, allowing LNG consumption growth to resume, Poten & Partners Inc.’s Darryl Houghton told a Houston audience recently.

The global liquefied natural gas (LNG) market is supply constrained, but that will change in the coming years as new liquefaction capacity comes online, including in North America, allowing LNG consumption growth to resume, Poten & Partners Inc.’s Darryl Houghton told a Houston audience last week.

Physical natural gas prices Friday rose an average 79 cents to $4.92, but if the highly volatile and constrained New England points are removed from the figures, the average was a loss of 2 cents to $3.58.

Cash natural gas prices on average gained more than 15 cents Thursday, but if volatile and constrained points such as New York and New England are factored out, the overall gain was just over a couple of pennies.

Houston midstream operator Eagle Rock Energy Partners LP on Friday agreed to pay BP America Production Co. $227.5 million in cash for the BP Panhandle System, which includes two natural gas processing plants and a 2,500-mile gas gathering pipeline system. Eagle Rock also would take over BP’s gas processing in the area under a 20-year agreement.

Encana Corp. has close to 11.7 million net acres from which to pick and choose for development in North America’s onshore, but the Horn River Basin in British Columbia (BC) is drawing special attention, in part because of the promise it holds for natural gas demand in the oilsands, as well as promising liquefied natural gas (LNG) exports, company officials said Tuesday.

The growth of the Marcellus Shale likely won’t be constrained by market demand, despite a projected seven-fold increase in production from the play over the next 15 years, according to FBR Capital Markets.