Inventories

With record natural gas storage inventories and a lack of winter weather (until last week), some may think it’s not the time to talk about expanding North American storage facilities. But those in the know would beg to differ.

With record natural gas storage inventories and a lack of winter weather (until this week), some may not think it’s the time to talk about expanding North American storage facilities. But those in the know would beg to differ.

Southern California Gas said Monday that due to high inventories in its storage fields, it had reduced injection capacity by 60 MMcf/d. Then in a Tuesday update it said another 17 MMcf/d of injection was lost because of electrical repairs to the No. 8 main unit at its Playa Del Rey field.

PG&E kept in place a high-inventory operational flow order with a 5% tolerance on Wednesday. The tolerance is scheduled to be 10% on Thursday with inventories expected to exceed the 4.5 Bcf normal operating limit. The composite temperature in PG&E’s territory has been around 59 degrees compared to a historical average of 66 degrees.

Working gas inventories are expected to start this upcoming winter heating season at the highest mark since 1990, keeping gas prices at depressed levels in comparison to prior years, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook for September that was issued last Tuesday.

Working gas inventories are expected to start this upcoming winter heating season at the highest mark since 1990, keeping gas prices at depressed levels in comparison to prior years, according to the Energy Information Administration’s (EIA) Short-Term Energy Outlook for September.

Northern Natural Gas noted Wednesday that like many other storage operators, it continues to experience high storage inventories. “While IDD shippers have brought their inventory balances down considerably this month, Northern will continue to have limited capacity for IDD volumes for the remainder of the summer season,” it said. “Northern needs to protect its storage capability in order to not jeopardize its ability to meet firm storage daily and inventory requirements.” Thus the pipeline gave notice that its Positive IDD Storage Inventory Allocation will be extended from July 31 to Oct. 31. Shippers whose IDD account balance at the end of the April 21 gas day was negative must have a balance no greater than zero on Oct. 31, Northern said. Those with positive balances at the end of the April 21 gas day must have a balance no greater than that on Oct. 31. Any IDD volumes that exceed those limits will become the pipeline’s property. Northern emphasized that this allocation process does not limit a customer’s ability to continue using IDD for the purpose of providing an interruptible daily and monthly balancing service. See the bulletin board for other details of the notice.

Reduced demand for natural gas in the electric generation and residential markets, combined with bulging inventories for this time of the year, are setting the stage for weaker spot gas prices throughout much of the year, according to the Energy Information Administration’s (EIA) Short-Term Energy and Summer Fuels Outlook that was released Tuesday.

PG&E’s California Gas Transmission system has declared a customer specific operational flow order for Tuesday’s gas day. System inventories are expected to rise above normal operating limits. The pipeline had a Stage 3 systemwide OFO with a 10% tolerance in place on Saturday.