natural gas

It was a tale of two bidweek markets for September: the Northeast and everyone else. The NGI September Bidweek National Average gained by a somewhat mediocre 4 cents to $3.50 over August Bidweek. But excluding a few points in California, double-digit gains were recorded at most all points outside the Northeast.

The Electric Reliability Council of Texas (ERCOT), operator of most of the Lone Star State’s power grid, anticipates sufficient installed generating capacity to serve forecasted peak demands during fall and winter with “a historically typical amount” of generator outages, ERCOT said Tuesday. “It appears we are likely to see a cooler fall season overall, with temperatures typically within the average range seen over the past 12 years,” said ERCOT meteorologist Chris Coleman. “We also are seeing strong indications of normal rainfall or even wetter than normal in some areas. With more than 75,500 MW of generation available, ERCOT expects to be prepared for the anticipated peak demand of about 48,700 MW this fall. Electric generation providers typically schedule maintenance outages during fall and spring to prepare for more extreme weather that occurs during winter and summer. It is typical for more than 9,000 MW to be offline for maintenance during fall, and unplanned power plant outages could range from the typical 3,400 MW to nearly 7,000 MW. Taking these factors into account, ERCOT said it expects reserves to range from about 2,600 MW, if peak demand is significantly higher than expected, to more than 14,000 MW under expected conditions.

The late onset of summer heat in the Northeast continued to prop up most physical natural gas prices in the region on Tuesday for Wednesday delivery as values across the rest of the country slumped. Over in the futures arena, traders who were obviously unimpressed with the Northeast heat and discouraged by the hearty natural gas storage refill rate pushed the October natural gas futures contract well below $4 in a move that marked the largest drop for a front-month contract in half a year.

U.S. natural gas production hit 87.08 Bcf/d in June, a 0.5% increase from 86.63 Bcf/d in May and a whopping 6.9% (5.61 Bcf/d) more than in June 2013, helped in large part by shale production, according to the latestMonthly Natural Gas Gross Production Report issued Friday by the Energy Information Administration (EIA).

Physical gas traders weren’t taking any chances that gas for Monday and Tuesday delivery would be as readily available as usual.

By the end of the four-day trading week ended August 28, bulls had clearly gained control with all high-traffic market points in the black and the NGI Weekly Spot Gas Average posting a healthy 11-cent rise nationally to $3.71.

Enable Midstream Partners LPplans to construct 200 MMcf/d of additional gas processing capacity near its Bradley Processing Plant in Grady County, OK, to serve producers in the South Central Oklahoma Oil Province, also known as SCOOP. The plant, currently under construction to provide 200 MMcf/d of capacity, is expected to be in service in 1Q2015. “Strong producer activity continues on our Anadarko Basin gathering systems, particularly in the SCOOP play,” said CEO Lynn Bourdon. “We already have critical long-lead plant infrastructure ordered and anticipate a fourth quarter 2015 startup for this additional capacity.” The additional capacity is to cost around $200 million, including plant equipment, associated compression, and installation costs. The investment was anticipated in capital guidance. Enable has added about 500,000 gross acres of SCOOP-area dedicated acreage since the end of 2013.

Natural gas futures rose following the release of government storage figures that were somewhat less than what the market was expecting.

As pipelines scurry to develop takeaway capacity from the oversupplied Marcellus/Utica shale region, a Morningstar Commodities Research analyst said the consequences of development will be both bullish and bearish for prices, depending upon where one’s gas lands.