Driven

Cash prices on average for weekend and Monday delivery gas gained 3 cents in Friday’s trading. Weather-driven weakness was noted at eastern points, but that was more than offset by strength in the Gulf of Mexico and Rockies. Futures trading was uninspired, and at the end of the day November had risen 0.7 cent to $3.611 and December had eased 2.3 cents to $3.877. November crude oil lost 21 cents to $91.86/bbl.

The cash market overall fell 2 cents on average Friday with weather-driven strength at Rockies points pulling prices higher and moderating California temperatures pulling prices lower, in some cases by double digits.

North Dakota continued its torrid pace for month-over-month production increases in oil and natural gas, driven principally by the Bakken Shale play, according to statistics released Wednesday by the state Department of Mineral Resources’ (DMR) Industrial Commission. The latest statistics are as of the end of July.

Incremental Northeast gas production during September will be driven by gathering system tie-ins, Bentek Energy LLC said in a Natural Gas Production Monitor market note. Transcontinental Gas Pipe Line Co. (Transco) is expected to add connections to two Penn Virginia Resource Partners LP gathering systems and additional compression on Williams’ Springville system is to come online this month, Bentek said. “Combined delivery capacity to Transco from the new tie-ins and compression upgrades will amount to more than 1 Bcf/d; however, Transco will likely not be able to accept more than 0.4 Bcf/d with a substantial portion of the Leidy Line capacity reserved for no-notice service,” the firm said. It expects Northeast production to add 0.2 Bcf/d during September, with the remainder of the Transco capacity filling through October. In November, the Tennessee Gas Pipeline Northeast Supply Diversification and the National FuelGas Co. Northern Access expansions are expected to support a winter production growth rate of about 0.2 Bcf/d each month through January (see Shale Daily, July 18), Bentek said.

Natural gas use in power generation has risen significantly this summer because of weather-driven demand for air conditioning and rock-bottom natural gas prices, the Energy Information Administration (EIA) said.

Technology and good old “American ingenuity” that have driven the shale gas boom are also prompting responses to a supply glut that make storage and eventual liquefied natural gas (LNG) exports more important than ever, according to Bryan Durkin, COO at CME Group, who addressed the opening session of the LDC Gas Forums mid-continent meeting in Chicago Monday.

Kinder Morgan Interstate Gas Transmission LLC’s (KMIGT) proposal to sell a 432-mile segment of its Pony Express natural gas pipeline to an affiliate (Kinder Morgan Pony Express Pipeline LLC) for the purpose of converting it to transport crude oil from the Bakken and Denver-Julesburg/Niobrara shales has received a mixed reaction at FERC.

Cash quotes overall on average were 7 cents higher Thursday, paced by double-digit, weather-driven gains at Northeast points. Eastern, Midcontinent and Rockies prices all gained as well.

With the backdrop of high and growing reliance on natural gas for power generation driven by the continuing shale gas expansion and resulting low prices, a conference room filled with gas industry representatives Tuesday discussed ways to better coordinate regional and national gas and power grids during a daylong FERC conference in Portland, OR.