Tennessee Gas Pipeline (TGP) Zone 4 cash basis will remain weak for a while, although it will see an uplift of about 50 cents at the end of the year when the pipeline’s Northeast Supply Diversification project and National Fuel’s Northern Access expansion come online, Bentek Energy LLC said in a recent market note.
The two projects will offer combined export capacity of about 0.4 Bcf/d to Canada and 0.1 Bcf/d on TGP to New England, the firm said.
“Due to the large well inventory awaiting infrastructure in the northern Pennsylvania counties that supply production to the TGP 300 Line, Bentek expects receipts into the TGP Z4 pool to remain constrained for most of the next three years, filling up planned regional expansions almost immediately, and keeping local cash prices at a significant discount to both Henry Hub and nearby Northeast markets,” the firm said.
“After the expansions at the end of this year, the next major uplift for TGP Zone 4 Marcellus basis should occur when the TGP Northeast Upgrade project begins service in November 2013, adding more than 0.6 Bcf/d of capacity to the 300 Line to move existing and incremental supply to New York markets via the [Texas Eastern Transmission Co.] NJ-NY expansion.”
Additionally, Bentek said Penn Virginia Resource Partners’ (PVR) pipeline through Wyoming and Luzerne counties, PA, and connecting to Transco is expected to begin flowing gas next month.
“The system will have a delivery capacity of 750 MMcf/d at the Transco interconnect, though PVR expects flows near 400 MMcf/d this year. In addition to the PVR system, Williams is expanding the Springville Gathering system by about 300 MMcf/d, which is also anticipated for service in September. Production volumes on both systems will be limited by what Transco will allow onto the Leidy Line, which currently has about 0.5 Bcf/d of operational capacity available for new production receipts,” Bentek said.
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