Looking beyond a cold weekend in the Midwest and Northeast to forecasts of widespread above-normal temperatures in the coming week, traders sent prices lower at nearly all points Friday. Thursday’s 12.4-cent loss by April futures and the weekend decline of industrial load put further negative pressure on Friday’s pricing.
Only a few flat to about a nickel higher points avoided the general softening. Losses ranged from a couple of pennies to more than a dollar. They tended to be largest at several western points, which were affected by high-linepack OFOs issued by both of California’s giant distributors (see Transportation Notes). The declines were smallest at Northeast citygates, which included the one point to realize a gain (Algonquin citygate) and two flat points.
The Northeast still had some heating load to contend with, as a winter storm was predicted to be moving through the region Saturday. The Northeast can expect a warming trend to start early this week, while the Midwest will have to cope with a new cold front around the same time. The eastern end of the previously mild South is starting to get a little heating load of its own, with lows of 31 and 29 forecasted for Saturday in Atlanta and Charlotte, NC, respectively. Much of the West was due to see temperatures five to as much as 25 degrees above normal during the weekend.
Some of the largest losses occurred on El Paso, which was scheduled to lose 488 MMcf/d of North Mainline capacity March 17-21 and then 385 MMcf/d March 22-24 (see Daily GPI, Feb. 22). San Juan Basin quotes fell by a dollar or so, while El Paso-Permian was down about 80 cents.
Rockies prices appear poised to face an additional depressant as what is believed to be about 200 MMcf/d of supply that has been off the market for about three weeks is about to be restored.
An outage of the Lost Creek Gas Gathering Pipeline system in Wyoming apparently is taking considerably longer to resolve than first expected. Late on the afternoon of Feb. 20 CIG reported that the Lost Creek receipt points on it and WIC had been shut in for what was thought to be two to three days because of operational problems experienced by the points’ operator (see Daily GPI, Feb. 22). Then on March 2 CIG and WIC said the operator expected to restore flows “sometime” during the week of March 5 (see Daily GPI, March 5).
However, according to a Wednesday story in the Casper (WY) Star-Tribune, flaring from the gathering system was brightening the night sky near the Wamsutter Hub during the past week. It quoted Jim Lowry, communications coordinator for ConocoPhillips’ Lower 48 Upstream unit, as saying a Feb. 16 power loss at the Lost Cabin Gas Plant about 125 miles away in Fremont County was the cause of the system outage when it led to the release of “impure product” (which the newspaper said was hydrogen sulfide) into Lost Creek Gas Gathering, and the flaring was done to safely remove the last of the gas from the pipeline. Lowry told the newspaper that the line was shut down, emptied and cleaned over a two-week period to ensure that its deliveries would meet all customer specifications.
ConocoPhillips is a 65% owner of Lost Creek, which is operated by Elkhorn Field Services. The 127-mile, 24-inch diameter system moves gas from Madden Field in Fremont County, WY, to the WIC and CIG connections in Wamsutter and Colorado. Although he had not received any updates as of Friday afternoon, Lowry told NGI that the line was expected to return to service over the weekend. He was unable to provide an estimate of how much gas had been shut in by the outage, but Porter Bennett of Bentek Energy in Golden, CO, said it looks like a little more than 200 MMcf/d was affected.
Just about everything was a little weaker, said a Canadian producer, who added that prices tended to go a little lower in late trading, “but not much.” He was unable to confidently declare that the Calgary area has seen the last of cold winter weather, but said it’s getting close, with weekend highs in the 50s and 60s expected. Any remaining cold weather should be short-lived, he said, “and nobody will want to pay up [for gas] for that.”
Vector takeaway capacity from Chicago to the Dawn Hub will continue to be limited by maintenance into April, the producer continued. He said the cash market looks like it will keep “slowly eroding,” and the return of storage injections may be the only thing that can revive prices in the near term.
The number of drilling rigs actively searching for gas in the U.S. took a steep drop of 12 to 1,453 in the week ending March 16, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). The offshore Gulf of Mexico accounted for the lion’s share of the drop, with 11 rigs quitting the search in the Gulf, Baker Hughes said.
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