Underground

Despite record levels of natural gas in underground storage caverns, cash market averages on Tuesday for Wednesday delivery continued to push higher with most points gaining 40 to 50 cents. However, the prior-day 26.9-cent November futures increase that supported Tuesday’s cash move will be missing Wednesday as the prompt-month contract dropped 10.7 cents on Tuesday to $4.880.

The Energy Information Administration’s (EIA) Thursday morning report that 64 Bcf was injected into underground natural gas storage for the week ending Sept. 25 pushed working gas levels above the all-time storage record — with five weeks still remaining in the traditional refill season. The injection, which was slightly larger than most industry expectations, allowed natural gas futures values to head lower.

Coming right inline with industry expectations, the Energy Information Administration (EIA) reported Thursday morning that 67 Bcf was injected into underground natural gas storage caverns for the week ending Sept. 18. In response, front-month natural gas futures — which had been heading lower in pre-report trading — took a few minutes to get its bearings before reversing higher.

Every week the Energy Information Administration (EIA) tells the gas industry roughly how much of its product is stored underground. Once a year it estimates how big the nation’s gas warehouse actually is. By the latest estimate, capacity has grown due to the opening of facilities and expansions.

Every week the Energy Information Administration (EIA) tells the gas industry roughly how much of its product is stored underground. Once a year it estimates how big the nation’s gas warehouse actually is. By the latest estimate, capacity has grown due to the opening of facilities and expansions.

Central Valley Gas Storage LLC last week requested authorization from the California Public Utilities Commission (CPUC) to construct and operate an underground natural gas storage facility north of Sacramento with initial capacity of 5.5 Bcf, which would be expandable to 8 Bcf.

Two of Southern California Gas Co.’s (SoCalGas) underground natural gas storage fields in the greater Los Angeles metropolitan area were honored with “Outstanding Lease Maintenance Awards” by the California Department of Conservation’s oil, gas and geothermal resources Ventura Division. The awards were announced by the Los Angeles-based Sempra Energy utility. SoCalGas’s 100 Bcf-plus Aliso Canyon storage site in the north end of the city’s sprawling suburban San Fernando Valley was honored by the state for the 25th consecutive year; the other facility, Honor Rancho, near Valencia beyond the norther boundaries of the San Fernando Valley, was honored for the 23rd consecutive year. The utility said the state has informed it that a third storage facility, Playa del Rey, located in the load center of Los Angeles near the Pacific Coast, will also receive an award. Last year, SoCalGas earned three of 37 lease maintenance awards from the state department’s oil/gas division. Aliso and Honor Rancho were developed in the 1970s; Playa del Rey dates back to the mid-1940s.

Having launched a nonbinding open season in early June, the backers of the proposed Tricor Ten Section Hub LLC underground natural gas storage project in California filed an application with FERC Tuesday, seeking a certificate for their project by February. They seek to operate a high-deliverability, multi-cycle storage facility in Kern County, 10 miles southwest of Bakersfield.

Following Thursday morning’s report from the Energy Information Administration (EIA) that a healthy 46 Bcf was injected into underground natural gas storage for the week ended April 17, futures traders took advantage of the bearish news to push the May contract to new lows for the move. The front-month contract ended up closing out Thursday’s regular session at $3.409, down 12.3 cents from Wednesday’s finish.