PLATTS Gas Daily copy

[NATURAL GAS ]
GAS DAILY
www.platts.com
Tuesday, November 18, 2014
Cash and futures jump as arctic cold lingers
Futures and cash prices climbed as the mercury dropped in
key eastern US consuming regions on Monday,
The NYMEX December gas futures contract rose 32.1
cents, or nearly 8%, to a $4.341/MMBtu settlement Monday as the
market eyed forecasts that doubled down on cold weather for this
week and to early December.
THE
MARKET
(continued on page 2)
HAL/BHI could boost drilling efficiency: Analysts
Although the merger of Halliburton and Baker Hughes is certain to
face tough antitrust scrutiny, several analysts noted that the combination of two major fracking services players could actually end up raising drilling efficiencies as they combine their technological expertise.
The companies put rumors to bed early Monday that they would
combine their extensive oil services businesses, announcing their
(continued on page 7)
Tubular Bells opens, may press Transco Zone 4
Hess’ new Tubular Bells offshore production complex in the Gulf of
Mexico opened for business Monday after three years in development.
When in full production, the three-well platform will deliver
50,000 barrels of oil equivalent/d. Supply will flow through two
separate pipelines into Transcontinental Gas Pipe Line’s Zone 4B
offshore system.
(continued on page 5)
Polar vortex proved utilities met demand: AGA
The natural gas industry’s ability to meet the record demand
put on the gas system last winter bodes well for the system’s potential to serve an anticipated 20 Bcf/d of added demand in the coming years, an American Gas Association staffer told state utility
regulators Sunday.
“This past winter, as we saw new record levels of demand and
(continued on page 4)
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Daily price survey ($/MMBtu)
NATIONAL AVERAGE PRICE: 4.540
Trans. date:
11/17
Flow date(s):
11/18
Permian Basin Area
El Paso, Permian
Waha
Transwestern, Permian
Midpoint
South-Corpus Christi
Agua Dulce Hub
NGPL, STX
Tennessee, zone 0
Tx. Eastern, STX
Transco, zone 1
Absolute
Common VolumeDeals
4.265 +0.225 4.20-4.30 4.24-4.29 750 106
4.275 +0.260 4.20-4.314.25-4.30 468 68
4.280 +0.250 4.27-4.29 4.28-4.29 116
13
East Texas-North Louisiana Area
Carthage Hub
4.205
NGPL, Texok zone
4.150
Tx. Eastern, ETX
4.165
Tx. Gas, zone 1
4.210
East-Houston-Katy
Houston Ship Channel
Katy
+/-
+0.215
+0.185
+0.200
+0.205
4.18-4.21
4.08-4.19
4.15-4.18
4.19-4.24
4.20-4.21
4.12-4.18
4.16-4.17
4.20-4.22
7
475
15
199
4
56
7
26
4.220 +0.285 4.18-4.23 4.21-4.23
95
19
4.220 +0.230 4.20-4.264.21-4.24 364 41
—
4.120
4.120
4.170
4.200
—
+0.200
+0.250
+0.180
+0.260
——-
4.11-4.13
4.05-4.18
4.16-4.21
4.19-4.20
——-
4.12-4.13
4.09-4.15
4.16-4.18
4.20-4.20
—
54
100
43
58
—
8
21
6
6
Louisiana-Onshore South
ANR, La.
Columbia Gulf, La.
Columbia Gulf, mainline
Florida Gas, zone 1
Florida Gas, zone 2
Florida Gas, zone 3
Henry Hub
Southern Natural, La.
Tennessee, 500 Leg
Tennessee, 800 Leg
Tx. Eastern, WLA
Tx. Eastern, ELA
Tx. Gas, zone SL
Transco, zone 2
Transco, zone 3
Trunkline, WLA
Trunkline, ELA
4.210
4.200
4.220
4.245
4.240
4.260
4.220
4.255
4.255
4.210
4.180
4.195
4.225
4.200
4.260
4.200
4.180
+0.175
+0.205
+0.210
+0.225
+0.195
+0.195
+0.180
+0.220
+0.220
+0.230
+0.200
+0.185
+0.180
+0.210
+0.215
+0.200
+0.210
4.19-4.23
4.18-4.24
4.18-4.25
4.22-4.25
4.19-4.26
4.21-4.35
4.19-4.30
4.23-4.28
4.24-4.28
4.19-4.22
4.00-4.20
4.18-4.21
4.22-4.23
4.20-4.24
4.21-4.28
4.20-4.23
4.16-4.22
4.20-4.22
4.19-4.22
4.20-4.24
4.24-4.25
4.22-4.26
4.23-4.30
4.19-4.25
4.24-4.27
4.25-4.27
4.20-4.22
4.13-4.20
4.19-4.20
4.22-4.23
4.20-4.21
4.24-4.28
4.20-4.21
4.17-4.20
225
88
403
63
248
455
307
118
130
197
45
61
26
13
260
50
8
34
15
58
4
10
49
44
16
28
41
11
10
4
2
32
2
3
Oklahoma
ANR, Okla.
Enable Gas, East
NGPL, Midcontinent
Oneok, Okla.
Panhandle, Tx.-Okla.
Southern Star
4.400
4.175
4.195
4.185
4.285
4.385
+0.300
+0.170
+0.185
+0.190
+0.185
+0.010
4.40-4.40
4.15-4.19
4.17-4.21
4.15-4.21
4.27-4.32
4.36-4.40
4.40-4.40
4.17-4.19
4.19-4.21
4.17-4.20
4.27-4.30
4.38-4.40
7
34
273
112
44
15
4
6
38
16
18
6
New Mexico-San Juan Basin
El Paso, Bondad
4.260 +0.225
El Paso, San Juan
4.290 +0.230
Transwestern, San Juan
4.285 +0.195
4.25-4.26 4.26-4.26
4.26-4.35 4.27-4.31
4.27-4.33 4.27-4.30
50
318
137
4
57
24
Rockies
CIG, Rockies
Kern River, Opal
Stanfield, Ore.
Questar, Rockies
Cheyenne Hub
NW, Wyo. Pool
NW, s. of Green River
White River Hub
4.25-4.47
4.35-4.42
4.33-4.42
4.38-4.38
4.40-4.48
4.37-4.40
4.25-4.37
4.34-4.42
50
479
193
3
232
13
154
111
12
77
29
1
45
3
23
21
4.350
4.400
4.395
4.380
4.450
4.395
4.345
4.385 +0.155
+0.235
+0.185
+0.275
+0.210
+0.195
+0.250
+0.260
4.30-4.41
4.38-4.42
4.37-4.42
4.38-4.38
4.43-4.47
4.39-4.40
4.32-4.37
4.37-4.41
Gas Daily
Cash and futures jump … from page 1
“We sold off pretty hard last week,” Tom Saal, broker at INTL FC
Stone, said. “I think this is a little bit of short-covering ... and the
market reacting to the weather.”
Forecast models on Monday called for even colder weather in
eastern US consuming regions in the next few days, and longerterm models swung to a below-normal temperature outlook into
early December.
WSI said its 11- to 15-day forecast on Monday “depicts rather
widespread below-average temperatures across the nation, except
for the West Coast and Southwest. This is colder than where things
stood at the end of last week.”
WSI said another Pacific system may take a similar path through
the Rockies, Plains and into the East. “This may reinforce the upper
level trough axis over the East Coast and bring more cold air into the
eastern and southern US during the end of the month into the start
of December,” WSI said.
“You obviously wouldn’t want to be short here,” Saal said of the
front month contract’s march higher throughout the day.
“The heating demand is real, and the reaction to the sudden flip
by the US weather models is not unexpected,” as the market reacted
much the same way at the first of November, said Aaron Calder,
senior market analyst at Gelber & Associates.
However, Calder said that “technically, this move looks impulsive. The gap higher should clear out new short sellers and pave the
way for another move higher as long as the cold weather continues
to hold up. How far winter pricing will go lies in freeze-offs.”
“There is enough production to handle this colder-thannormal winter,” Calder said. “But if we see production freeze-offs
similar to last year, it would lead to price spikes in the futures and
physical markets.”
December traded Monday in a range between $4.113 and
$4.347/MMBtu.
Southern Natural issues OFO as demand rises
In the cash market, Northeast prices soared Monday on forecasts
for significantly below-average temperatures.
Temperatures are forecast to be nearly 20 degrees below average
across the region Tuesday, with highs averaging in the mid- to upper
30s in Boston, New York and Washington.
Forecasts for colder weather drove up demand expectations. Platts
unit Bentek Energy projected demand to jump to 25 Bcf Tuesday
from Monday’s demand of 19.3 Bcf.
The rising NYMEX also provided price support.
Prices at Transcontinental Gas Pipe Line zone 6 New York jumped
the most, rising $5.60.
Tennessee Gas Pipeline zone 6, 200-leg and Algonquin Gas
Transmission prices followed, each gaining more than $4.00.
In the production region, Tennessee zone 4 Marcellus bucked the
trend to lose 6 cents.
Along the Gulf Coast, prices rose on the effects from lower temperature forecasts and the stronger NYMEX.
Temperatures are expected to fall to nearly 20 degrees below average across the region Tuesday, boosting demand. Bentek projected
demand to rise from 17.7 Bcf Monday to 18.9 Bcf Tuesday.
Prices at the Houston Ship Channel jumped 28 cents.
Tuesday, November 18, 2014
Daily price survey ($/MMBtu)
Trans. date:
11/17
Flow date(s):
11/18
Midpoint
Canadian Gas
Iroquois, receipts
Niagara
NW, Can. bdr. (Sumas)
TCPL Alberta, AECO-C*
Emerson, Viking GL
Dawn, Ontario
GTN, Kingsgate
Westcoast, station 2*
+/-
Absolute
6.185 +1.630 5.18-8.00
—
—
——-
4.425 +0.215 4.39-4.45
C3.880 C+0.205 C3.84-3.95
4.685 +0.335 4.60-4.80
4.735 +0.295 4.65-4.83
4.170 +0.080 4.15-4.19
C3.795 C+0.230 C3.76-3.84
Common VolumeDeals
5.48-6.89 314
——-
—
4.41-4.44 337
C3.85-3.91 1774
4.64-4.74 194
4.69-4.78 1347
4.16-4.18 145
C3.78-3.82 176
78
—
60
152
43
144
24
29
Appalachia
Dominion, North Point
3.755
Dominion, South Point
3.825
Leidy Hub
—
Columbia Gas, App.
4.370
Lebanon Hub
4.600 REX, Clarington Ohio
—
Tennessee, zone 4-Ohio — Tennessee, zone 4-200 leg 3.770 Tennessee, zone 4-300 leg 2.565 Texas Eastern, M-2 receipts4.195 Millennium, East receipts 3.465 Transco, Leidy Line receipts2.585 +0.530
+0.595
—
+0.290
+0.350
—
—
+0.260
+0.005
+0.830
+0.340
-0.235
3.52-3.88
3.70-3.92
——-
4.28-4.43
4.53-4.75
——-
——-
3.75-3.88
2.35-2.85
4.00-4.40
3.35-3.50
2.30-3.00
3.67-3.85
3.77-3.88
——-
4.33-4.41
4.55-4.66
——-
——-
3.75-3.80
2.44-2.69
4.10-4.30
3.43-3.50
2.41-2.76
185
530
—
424
52
—
—
15
43
706
20
256
39
101
—
68
11
—
—
5
11
87
8
50
Mississippi-Alabama
Tx. Eastern, M-1 30-in.
Transco, zone 4
+0.200
+0.205
4.15-4.29 4.21-4.28
4.23-4.30 4.25-4.28
190
937
29
122
31
70
688
205
569
294
223
49
216
122
46
—
139
173
4
9
90
27
72
39
17
9
38
18
9
—
27
29
+0.390 4.60-4.87 4.70-4.83 899
+0.385 4.63-4.79 4.69-4.77
74
+0.330 4.50-4.71 4.62-4.71 239
+0.155 4.44-4.52 4.48-4.52 247
+0.385 4.61-4.67 4.62-4.65
75
+4.145 10.00-11.5010.37-11.12 158
+4.555 9.50-11.1010.15-10.95 73
—
——-
——-
—
+1.735 5.25-8.70 5.50-7.23 201
+1.155 4.29-5.00 4.52-4.87 329
+3.825 6.00-10.75 6.82-9.19 152
+5.495 6.70-10.00 8.28-9.93 214
+5.640 7.40-10.05 8.59-9.91 136
+0.175 4.48-4.57 4.49-4.54 214
+0.190 4.50-4.53 4.51-4.53 428
112
18
42
28
7
40
20
—
13
53
37
48
31
35
46
Others
Algonquin, receipts
El Paso, South Mainline
SoCal Gas
PG&E, South
PG&E, Malin
Alliance, into interstates
ANR, ML 7
NGPL, Amarillo receipt
Northern, Ventura
Northern, demarc
Dracut, Mass.
Tx. Eastern, M-1 24-in.
Northern Bdr., Ventura TP
Trunkline, zone 1A
4.245
4.265
4.145
4.420 4.430
4.390
4.385
4.785
4.780
4.630
4.725
4.710
10.440
—
4.745 4.225 Citygates
Chicago city-gates
4.765
Consumers city-gate
4.725
Mich Con city-gate
4.670
PG&E city-gate
4.500
Florida city-gates
4.635
Algonquin, city-gates
10.745
Tennessee, zone 6 del. 10.545
Tennessee, z6 (300 leg) del.— Iroquois, zone 2
6.365
Tx. Eastern, M-3
4.695
Transco, zone 5 del.
8.005
Transco, zone 6 non-N.Y. 9.105 Transco, zone 6 N.Y.
9.250 Kern River, delivered
4.515 SoCal Gas, city-gate
4.520 +0.785 4.00-4.40 4.05-4.25
+0.215 4.40-4.48 4.40-4.44
+0.210 4.38-4.50 4.40-4.46
+0.180 4.35-4.43 4.37-4.41
+0.160 4.35-4.42 4.37-4.40
+0.395 4.75-4.85 4.76-4.81
+0.450 4.70-4.85 4.74-4.82
+0.245 4.61-4.65 4.62-4.64
+0.365 4.62-4.77 4.69-4.76
+0.320 4.64-4.75 4.68-4.74
+5.440 10.00-10.8510.23-10.65
—
——-
——-
+0.410 4.67-4.77 4.72-4.77
+0.210 4.20-4.45 4.20-4.29
*NOTE: Price in C$ per gj; C$1=US$0.8843
Volume in 000 MMBtu/day
Market coverage
More information about Platts natural gas market coverage,
including explanations of methodology and descriptions of delivery
points, is available at;
http://www.platts.com/MethodologyAndSpecifications/NaturalGas
Questions may also be directed to Patrick Badgley,
[email protected],713-658-3267.
2
Copyright © 2014 McGraw Hill Financial
Gas Daily
Southern Natural Gas, Louisiana announced an OFO Type 3 on the company
website Monday. The OFO is to prevent demand exceeding capacity and will go
into effect Tuesday. Prices at Southern Natural gained 23 cents.
Prices in the Midcontinent rose on freezing temperatures and high demand
projections for downstream markets.
High temperatures in Chicago were forecast to reach just 20 degrees
on Tuesday, more than 25 degrees below the seasonal average. Oklahoma
City is expected to see high temperatures in the low 40s, almost 20 degrees
below normal.
Bentek projected Midcontinent demand to reach 26.9 Bcf Tuesday, well
above the seasonal average demand of 15.3 Bcf.
ANR Pipeline-Oklahoma saw the region’s greatest increase, as prices rose
about 30 cents.
Prices in the Upper Midwest also made gains amid plummeting temperatures.
Low temperatures in Chicago and Detroit were forecast to fall into the teens
on Tuesday, nearly 20 degrees below the seasonal average.
Bentek projected Midcontinent demand to reach 26.9 Bcf/d Tuesday, well
above the seasonal average of 15.3 Bcf/d.
Chicago citygates prices climbed almost 40 cents.
Near the producing regions, Northern Natural Gas’ demarcation point was up
nearly 32 cents.
Southwest prices increased on strength in the NYMEX contract, despite seasonal weather throughout the region.
Los Angeles is forecast to average in the upper 70s Tuesday, about 5
degrees above average, while Phoenix is expected to average in the mid-70s,
right at the norm.
In the production region Waha rose 27 cents, the largest regional increase,
while Pacific Gas & Electric citygate added 15 cents.
Northwest prices followed the NYMEX contract higher, ignoring expectations
for weaker demand.
Bentek expects demand to fall to 3.2 Bcf Tuesday from 3.7 Bcf Monday on a
mostly mild weather forecast.
The high temperature in Seattle is expected to be in the low 50s Tuesday,
right at the average.
Northwest Pipeline south of Green River jumped 25 cents, while nearby Opal
added 24.
— Market Staff Reports
Deep Panuke shutdown extends into October
Encana’s offshore Nova Scotia platform, Deep Panuke, will be down for maintenance longer than originally expected, Encana executives said last week.
The platform was shut in for maintenance on September 26 and has remained
offline due to higher than expected levels of produced water. Encana believes the
platform will return to service around the beginning of December, but expects
production to average between 140,000 and 180,000 Mcf/d, nearly 70,000 Mcf/d
below pre-maintenance levels.
The latest announcement marks another issue for Deep Panuke, which had to
shut in production for a few days in August after an electrical fire occurred on the
offshore platform.
Since the latest shut-in began on September 26, exports to the US via the
Baileyville interconnect with Maritimes & Northeast Pipeline have averaged
33,000 Mcf/d, nearly 200,000 Mcf/d below the year-to-date average.
Outflows have averaged 40,000 Mcf/d since the beginning of November,
50,000 Mcf/d below the average for the previous five Novembers. If that
average holds through the end of the month, it would be the second-lowest
3
Tuesday, November 18, 2014
Subscriber note: Thanksgiving
holiday gas trading schedule
North American natural gas price information collected
Tuesday, November 25, for the Daily Price Survey to be published in the November 26 Gas Daily will be for gas flowing
Wednesday, November 26, through Sunday, November 30.
Gas price information collected Wednesday,
November 26, for the Daily Price Survey to be published in the December 1 Gas Daily will be for gas
flowing Monday, December 1.
Gas Daily will not publish Thursday, November 27, or
Friday, November 28, because of the Thanksgiving holiday.
Marketer rankings notice
Gas Daily is currently compiling data for a third quarter
2014 ranking of North American gas marketers by daily
physical wholesale volumes sold. Gas Daily staff intends to
compile the rankings from information appearing in reports
filed with the Securities and Exchange Commission.
For companies that are not publicly traded or
do not provide such data to the SEC, staff requests
quarterly gas sales volume be reported in writing, and
verified by executive personnel, no later than Monday,
December 1, 2014. Submit data and any queries to
Stephanie Seay, [email protected], phone
865-690-4319, fax 865-690-0933.
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Copyright © 2014 McGraw Hill Financial
Gas Daily
November since 2005.
Once Deep Panuke returns to service, exports through Baileyville should
experience upward pressure as volumes are used to fulfill peak Northeast winter demand.
— Marcus Stewart, Bentek
EPA plan good for gas now; may hurt later: ANGA
Adoption of the Environmental Protection Agency’s Clean Power Plan by
2020 could result in more natural gas use by power generators and industrial
users, but the language could come back and haunt gas users, the head of shale
gas trade group America’s Natural Gas Alliance said Monday.
ANGA President Marty Durbin said that while the plan is focused on coalfired power plants, it contains language that “could someday be applied to power
plants fueled by natural gas.”
“Natural gas is going to continue to play an increasing role in power generation,” he said.
ANGA wants to know “how can we insure that natural gas will be effectively
and efficiently integrated into the power generation in each of the states?”
The proposed rule, which would be enforced by the states, could cause
demand to go up by as much as 5 to 10 Bcf/d, Erica Bowman, an economist for
ANGA, said.
How much gas demand will increase will depend on how the regulations are
implemented by the states, she said.
However, officials for some state governments think the timeline for the new
rule is “too aggressive,” she said, and want more implementation time.
The proposal, issued in June, sets targets for states to reduce carbon emissions
from existing power plants 30% below 2005 levels by 2030, with interim goals set
for 2020. The agency is taking comments on the plan until December 1, before
issuing a final rule (GD 10/22).
— Rodney White
Polar vortex proved utilities met demand: AGA … from page 1
performance by the industry to meet that demand, in a way sets a new bar
for our understanding and our concept of [gas] abundance as we anticipate
new demand growth and expected increases of natural gas consumption going
ahead into future years,” Richard Meyer, AGA’s manager of policy analysis,
said at the National Association of Regulatory Utility Commissioners’ annual
meeting in San Francisco.
The polar vortex that riddled most of the country with persistent brutally cold
temperatures last winter resulted in daily, weekly and monthly gas consumption
records being set in January, as well as hitting the highest electricity load for a
winter-month ever and a new record for gas volumes used for power generation.
“This was an extraordinary event in terms of the amount of energy used and
heating demand placed on the natural gas system,” Meyer said. Yet, “gas supplies
were flowing to consumers when they were most needed during those peak days
and, importantly, companies did not move off of their planning horizon. They
were ready for this winter.”
While the coming winter is not expected to be as harsh or repeat the 201314 winter conditions that created an average 102 Bcf/d of demand in January,
demands on the gas system are expected to grow, regardless of weather events.
Total incremental demand growth of 20 Bcf/d by 2020 is expected to come
from new gas volumes directed to power generation as coal-fired power plants are
retired, gas consumption from increased industrial manufacturing and for petro-
4
Tuesday, November 18, 2014
Subscriber note:
Following a period of feedback which ended October 24,
Platts will add to its daily and monthly bidweek price surveys sub-listings for Transco zone 6, non-New York North.
Platts is adding the new listings for the bidweek market on January 2, 2015, covering late December bidweek
trading for January delivery, and on January 3-5 for the
daily market, covering trade date January 2.
In the non-New York portion of Transco’s zone 6,
which extends from the Virginia/Maryland border to
markets south of Linden, New Jersey, price values have
bifurcated since last winter, with delivered values on the
capacity-constrained portion of the zone south of Station
195 at the Maryland/Pennsylvania border rising well
above those north of the station.
To bring more transparency to the pricing region,
Platts is adding a listing for the northern portion of
Transco’s zone 6 non-NY, which will be composed of
only transactions delivered from Transco to markets and
interconnects north of Station 195 in York, Pennsylvania,
excluding deliveries in the Leidy Hub area and to New
York citygates downstream of Linden, New Jersey.
There will be no change to the existing Platts listing for
Transco, zone 6 non-NY, which is composed of all non-NY
delivered transactions both north and south of Station 195.
Platts has considered adding a separate listing for the
southern portion of Transco zone 6 non-NY, but has opted
not to propose it at this time due to a lack of trade liquidity.
The description for the new location will be:
Transco, zone 6 non-NY North (daily and monthly survey)
Deliveries from Transcontinental Gas Pipe Line from
Station 195 in York, Pennsylvania, to the Linden, New Jersey,
compressor station and on the Leidy Line south of Clinton
County, Pennsylvania. The non-New York North point does not
include deliveries to Public Service Electric and Gas in New
Jersey, whose supply is taken downstream of Linden.
The proposed Transco, zone 6 non-NY North listings
would appear in the “Northeast” section of the “Market
Center Spot Gas Prices” table in Inside FERC’s Gas Market
Report, Energy Trader and Gas Daily Price Guide, in the
“Citygates” section of Gas Daily’s “Daily price survey”
table, and Platts Natural Gas Alert pages 433, 495 and
516. Additionally, the new listings would appear in the
“Northeast” section of the “Market Center Bidweek Physical
Basis Prices” table in Inside FERC’s Gas Market Report.
Please send any additional comments to [email protected] and [email protected].
For written comments, please provide a clear indication
if comments are not intended for publication by Platts for
public viewing.
Platts will consider all comments received and will
make comments not marked as confidential available
upon request.
Platts Podcast
Tension eases on EU gas markets after RussiaUkraine deal
Platts Beatrice Bedeschi and Gary Hornby discuss
recent developments in the European gas markets
following the deal reached by Russia and Ukraine over
winter gas supplies.
http://plts.co/russia-ukraine-gas-111014
Copyright © 2014 McGraw Hill Financial
Gas Daily
chemical feedstocks, exports of liquefied natural gas to foreign countries, a rise in
pipeline exports to Mexico, and new opportunities for gas used as vehicular and
marine vessel fuel, Meyer said.
As evidenced by the polar vortex, the supply portfolio available to gas utilities
is in a good position to handle demand growth.
Over the past decade, gas utilities have generally used about 70% of their
supply assets, including firm transportation, underground storage, linepack and
citygate purchases, to meet peak demand. That figure jumped to above 90% last
winter, with room to grow, Meyer said.
“In fact, while many utilities noted that they hit their peak day on January
7, many indicated they did not hit their design day, so there was still room built
into the system if greater demand was required,” Meyer said.
Meyer acknowledged that there were challenges, notably related to pipeline constraints in the Northeast and issues with compressor stations in the
Southwest. But he said that “these contingencies are generally anticipated by gas
utilities” and built into their supply portfolio.
Ultimately, he said, the polar vortex was a test of the gas system’s reliability,
and gas utilities proved they could provide dependable service to customers at
affordable prices in the face of demand spikes.
Citing data from the Energy Information Administration, Meyer said that gas
prices since 2011, with the realization of the shale boom, have generally been
lower and less variable than the price range seen from 2006 to 2010. In cases
where there were substantial draws on the system, like during the polar vortex,
“the price movements that did exist were relatively muted compared to history”
or did not last for very long.
Meyer noted that there were exceptions related to regional and locational
issues “where prices are not just a function of the commodity availability but the
transportation between point A and point B,” such as the pricing challenges seen
in the Northeast..
When asked whether the industry and current infrastructure were equipped
to handle another polar vortex, Meyer said, “I suppose we could build up
some nightmare scenario where we could not meet all the new demand that
was out there.”
“Last [winter] was the nightmare scenario for the gas industry, where we blew
past all preceding records, and yet the industry performed,” he said. “So we can
keep moving the goalposts, but let’s recognize how far we’ve come and where the
bar has been set during this past record season.”
— Jasmin Melvin
Tubular Bells opens, may press Transco Zone … from page 1
A Hess spokesman said an average barrel of Tubular Bells production will be
62% crude oil, 26% natural gas, and 12% natural gas liquids, implying daily production of 78,000 Mcf/d from the field.
As production from the field ramps up, downward pressure will be put on
Transco Zone 4 basis prices. Production could feed Florida winter gas demand via
Williams’ Gulfstream Natural Gas system or Kinder Morgan and Energy Transfer
Partner’s Florida Gas Transmission joint venture.
Tubular Bells is tied into the Gulfstar floating production system, which delivers to Transco’s Zone 4B Offshore system. The interconnect has a nominal capacity of 172,000 Mcf/d and delivers onto Transco’s Mobile Bay Lateral.
The platform’s design capacity is for production volumes of 60,000 b/d of
crude and 200,000 Mcf/d of gas. As of Monday, receipts from Tubular Bells were
zero, with buyback deliveries averaging 1,000 Mcf/d since late October.
Hess operates Tubular Bells with a 57% working interest. Chevron has the
Tuesday, November 18, 2014
Money in the bank, Panda Power to
start building gas-fired Virginia plant
Panda Power expects to begin construction immediately on a 778-MW natural gas fired power plant near
Leesburg, Virginia, after completing financing of the
approximately $800 million Stonewall project.
South Jersey Resources will supply the gas for the
plant through a Dominion Transmission line.
Stonewall will displace older, more costly generation
in the region and will enhance competition in the wholesale market by offering generation that will not be owned
by an incumbent electric utility, Panda said when seeking
regulatory approval of the plant.
Panda raised $571 million in debt capital, the
company said Monday. Panda Power Fund is supplying
equity for the project along with co-investors that include
Siemens Financial Services, Bill Pentak, a Panda spokesman, said Monday.
Siemens and Bechtel were awarded a contract to
design and build the power plant. Bechtel was one of the
original developers of the project, but no longer has an
equity interest, Pentak said.
The Stonewall plant is strategically located in one
of the fastest growing counties in the US, Panda Power
said. Approximately 70% of the world’s internet traffic
flows through Loudoun County, but the county imports
100% of its power from neighboring areas, Panda Power
said in a statement.
Dominion, the primary service provider in Loudoun
County, said previously that demand from the facilities in
the high-tech corridor and national hub for data storage
is expected to reach 1,000 MW annually in 2017.
Dominion is currently building a 1,300 MW gasfired plant in nearby Warren County and plans to file for
approval to build another large scale power plant in an
unnamed area of the state next year to help close the
gap between demand and amount of power the utility produces. Earlier in November, Dominion issued a request
for proposals for 1,600 MW to evaluate options to meet
expected demand.
— Mary Powers
Correction
Binghamton, New York-based Leatherstocking Gas
was the first local distribution company to connect to a
Marcellus Shale gas gathering system. The privately held
subsidiary of Corning Natural Gas, Leatherstocking serves
more than 100 residential and commercial customers in
Susquehanna County, Pennsylvania.
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5
Copyright © 2014 McGraw Hill Financial
Gas Daily
Tuesday, November 18, 2014
Forward basis prices strengthen across the country as chilly weather predicted into December
Midcontinent and Northeast financial basis swaps strengthened
on Monday as the NYMEX surged amid forecasts for continued
cold across the country over the next few weeks.
The NYMEX December natural gas futures contract rose 32.1 cents,
or nearly 8%, to a $4.341 settlement as traders eyed forecasts that predicted colder than normal weather could linger into early December.
Transcontinental Gas Pipe Line zone 6 New York December
basis gained 35 cents to plus $3.05/MMBtu, marking the day’s biggest gainer at a major hub.
Market assessments are considered preliminary and based on
market activity on IntercontinentalExchange at 2:25 pm Eastern.
Northeast demand is expected to rise to 26.5 Bcf/d by
Wednesday, 10 Bcf/d above normal levels, amid the recent cold
front that has blanketed the country. Demand will dip below
normal levels just briefly next week but will top historical levels
through the remainder of the month, according to Bentek Energy.
Algonquin Gas Transmission citygate December basis fell 41
cents to plus $10.50/MMBtu.
In Appalachia, Dominion, South Point, December basis
strengthened 3 cents to minus $1.07/MMBtu.
Northeast production hit a new high of 18.3 Bcf/d on Friday and
averaged 18.2 Bcf/d over the past three days as strong demand and
recent pipeline expansions have allowed regional production to surge.
Midwest financial basis swaps were the strongest percentage
gainers on Monday, with Chicago citygate and Michcon December
basis gaining 25% and 20%, respectively.
Chicago citygates December basis gained 10.2 cents to plus 50
cents/MMBtu. Michcon December basis moved 6.5 cents higher
plus 39.5 cents/MMBtu.
Midcontinent demand reached 26 Bcf/d on Monday, 11 Bcf/d
above normal, and will trend lower during the rest of the month
but remain above historical levels. Average temperatures in Chicago
and Detroit will fall to 20 degrees this week and will average over
10 degrees below normal during the remainder of the month.
In Ontario, Union Dawn December basis traded 7 cents higher
to 57 cents/MMBtu.
In Western Canada, AECO-NIT December basis shed 10.75 cents
to remain heavily discounted at minus 58.5 cents/MMBtu.
Prices were largely unchanged at western hubs, where demand
is expected to fall near historical levels over the rest of November.
Pacific Gas and Electric citygate December basis was unchanged
at plus 28 cents/MMBtu.
Southern California Gas December basis gained a half cent to 13
cents/MMBtu.
Northwest Pipeline-Rockies December basis strengthened 2 cents
to minus 4.5 cents/MMBtu. Rockies demand remains elevated at 3.7
Bcf/d as temperatures average 20 degrees, but will fall towards its
seasonal norm of 2.5 Bcf/d by the end of the week and remain flat
through the end of the month, according to data from Bentek Energy.
Along the Gulf Coast, Houston Ship Channel December basis
fell a half cent to minus 4.0 cents/MMBtu.
To the east, Florida Gas Transmission zone 3 December basis
was unchanged at plus 2.0 cents/MMBtu.
— Thaddeus Walker
Platts M2MS Forward Curve — Natural Gas, Nov 17 (¢/MMBtu)
Prompt month: Dec 14
Transco, zone 3: Key packages, last 30 days
4.6
Transco, zone 3: Forward curve
$/MMBtu
5
December 14
Winter 14-15*
4.4
$/MMBtu
spot price, last 30 days
Summer 15
Cal 15
4.2
4
4.0
3.8
3
3.6
3.4
06-Oct
14-Oct
22-Oct
30-Oct
07-Nov
17-Nov
Transco, zone 3: Basis market vs NYMEX
4.5
2
$/MMBtu
4.3
Prompt month basis
Prompt month NYMEX
1
4.1
3.9
Cal 17
Cal 16
Cal 15
Summer 17
Winter 16-17
Summer 16
Winter 15-16
17-Nov
Winter 14-15*
07-Nov
Summer 15
30-Oct
May 15
22-Oct
April 15
14-Oct
March 15
3.5
Summer season is April-October.
06-Oct
Winter is November-March. *Balance-of-season.
February 15
3.7
January 15
0
December 14
Algonquin, city-gates
1050.00
Transco, zone 6-NY
306.00
Texas Eastern, M-3
50.50
Columbia Gas, Appalachia
-9.30
Dominion, South Point
-109.00
Transco, zone 3
0.30
Transco, zone 4
0.30
Southern Natural, LA
-1.60
Tennessee, 500 Leg
-5.10
Florida Gas, zone 3
1.90
Columbia Gulf, mainline -10.80
Houston Ship Channel
-3.80
NGPL, Texok
-6.80
Chicago city-gates
50.00
MichCon city-gate
39.50
Dawn, Ontario
50.00
Panhandle, TX-Okla.
-8.00
Northern, Ventura
51.50
Northern, demarc
40.00
Waha-5.30
El Paso, Permian Basin
-6.00
El Paso, San Juan Basin
-5.50
PG&E city-gate
28.30
PG&E, Malin
3.50
SoCal Gas
14.50
Northwest, Rockies
-4.50
Northwest, Sumas
16.00
AECO, Alberta
-59.00
Table and graphs are created using Platts M2MS-Gas data. Forward assessments as basis to the Henry Hub and full values are available for periods spanning 10 years.
To see a sample and find information on how to subscribe to the full data set go to www.platts.com/risk. For more information on Platts services, please call +1-800-PLATTS8.
For editorial questions, call Mark Callahan +713-658-3211.
6
Copyright © 2014 McGraw Hill Financial
Gas Daily
Tubular Bells opens … from page 5
NYMEX Henry Hub gas futures contract, Nov 17
remaining non-operated interest.
The Tubular Bells field was discovered in 2003 and began development in
2011. The platform sits in 4,300 feet of water 135 miles southeast of New Orleans,
while the reservoir is 24,000 feet beneath the ocean floor under a 10,000-foot
thick dome of salt.
Hess says it may drill two more production wells into the subsea reservoir.
— Bill Holland, with analysis by Ross Wyeno, Bentek
HAL/BHI could boost drilling efficiencies … from page 1
intent to create a $34.6 billion firm second only to Schlumberger.
The merger, which will retain the Halliburton name, “could possibly increase
high-end costs” for the exploration-and-production segment, “but it could also
increase the efficiencies of those operations,” said Raymond James analyst Praveen
Narra. “Halliburton could do a lot more bundled services, for instance, increasing the
level of service to its customers, so it may not necessarily be a negative impact.”
“I think the more efficient they are the better it gets for costs ... the more margin capture that can be kept,” Narra said. “A push for more integrated operations
could in the long run be better for E&Ps.”
On the downside, “when you have bundled services you’re obviously paying
for convenience and efficiency, but you do run the potential for having fewer and
fewer people who can provide” those services, Narra added. “It’s tough to say how
this will impact specific projects, for instance, since we’re so far away from closing. There’s a long way to go before those dynamic changes will be identified.”
“It might lower costs,” said Kyle Cooper, principal at IAF Advisors. “It’s really
going to give Halliburton and Baker Hughes more resources and creates a major
competitor for Schlumberger.”
“There is certainly always a fear that a merger like this would reduce competition, but it might actually work to improve efficiencies,” Cooper said.
He noted that each company has a set of specialties, which when combined
Shale Value Chain assessments, Nov 17
$/MMBtu+/-0.874
-0.285
-1.062
-0.285
-1.079
-0.155
-0.924
-0.185
7.599
-0.059
3.379
-0.344
4.4
4.035
4.250
4.555
4.165
4.360
4.390
4.210
4.225
4.210
4.045
3.610
202
1,157
378
449
1,309
1,338
1,063
1,100
2
979
1,450
Henry Hub cash price
NYMEX front month close
4.1
4.0
11-Nov
12-Nov
13-Nov
14-Nov
17-Nov
Platts oil prices, Nov 17
Scheduled
+/-
%
Daily
—31 Day Average—
Flow Change PriceFlow Price
0.00
0.46
-3.67
0.01
-0.39
31.86
0.94
-0.06
0.00
3.42
-0.64
($/MMBtu)
4.2
3.9
0
5
-21
0
-6
351
9
-1
0
46
-10
+/-Volume
4.3
Natural gas hub flow, Nov 17
227
1,104
561
405
1,579
1,453
957
813
0
1,385
1,635
Settlement High Low
Dec 2014
4.3414.3474.113+32.1153085
Jan 2015
4.4444.4504.223+31.5 77830
Feb 2015
4.3964.4004.192+29.3 22439
Mar 2015
4.2934.2984.100+27.8 36979
Apr 2015
3.8123.8143.727+12.0 24685
May 2015
3.7603.7623.675+10.7 8074
Jun 2015
3.7743.7743.703+10.2 2348
Jul 2015
3.796 3.796 3.726
+9.7 3089
Aug 2015
3.806 3.806 3.734
+9.6 1759
Sep 2015
3.794 3.795 3.720
+9.6 1269
Oct 2015
3.823 3.825 3.748
+9.6 4596
Nov 2015
3.893 3.896 3.828
+8.6 1172
Dec 2015
4.063 4.067 4.003
+7.9 598
Jan 2016
4.176 4.178 4.129
+7.5 1158
Feb 2016
4.142 4.142 4.117
+7.0 87
Mar 2016
4.064 4.064 4.044
+6.5 288
Apr 2016
3.822 3.840 3.815
+3.8 202
May 2016
3.811 3.840 3.800
+3.6 60
Jun 2016
3.832 3.832 3.832
+3.6 2
Jul 2016
3.857 3.877 3.857
+3.6 15
Aug 2016
3.866 3.866 3.866
+3.6 0
Sep 2016
3.851 3.851 3.828
+3.6 2
Oct 2016
3.875 3.888 3.875
+3.6 12
Nov 2016
3.945 3.945 3.945
+3.3 12
Dec 2016
4.097 4.138 4.086
+3.1 16
Jan 2017
4.229 4.229 4.229
+2.9 0
Feb 2017
4.207 4.207 4.207
+2.7 0
Mar 2017
4.145 4.145 4.145
+2.5 2
Apr 2017
3.915 3.915 3.915
+2.0 1
May 2017
3.912 3.912 3.912
+2.0 0
Jun 2017
3.940 3.940 3.920
+2.0 1
Jul 2017
3.973 3.973 3.973
+2.0 0
Aug 2017
3.984 3.984 3.984
+2.0 0
Sep 2017
3.974 3.974 3.974
+2.0 0
Oct 2017
3.995 3.912 3.912
+2.0 0
Nov 2017
4.074 4.074 4.074
+1.9 1
Contract data for Friday
Volume of contracts traded: 339,819
Front-months open interest:
Dec, 81,528 ; Jan, 259,666; Feb, 72.637
Total open interest: 967,705
Data is provided by a third-party vendor
and is accurate as of 5:30 pm Eastern time.
4.5
The methodology for these assessments is available at:
www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/shale-value-chain.pdf
ANR, La.
Florida city-gates
Iroquois, receipts
Kern River, Opal plant
Northern, Ventura
Northern, demarc
Northwest, Can. bdr. (Sumas)
PG&E, Malin
Stanfield, Ore.
Transco, zone 3
Transco, zone 6 N.Y.
Henry Hub/NYMEX spread
Gulf Coast ethane fractionation spread
Gulf Coast E/P mix fractionation spread
E/P mix Midcontinent to Rockies fractionation spread
E/P mix Midcontinent fractionation spread
National raw NGL basket price
National composite fractionation spread
Hub Name
Tuesday, November 18, 2014
3.736
4.088
3.942
3.667
3.895
3.899
3.573
3.727
3.614
3.768
2.951
($/b)($/MMBtu)
Gulf Coast spot
1% Resid (1)
3% Resid (1)
67.53-67.55
62.02-62.04
10.81
9.92
Crude spot
WTI (Dec) (2)
75.55-75.57
13.03
Volumes in 000 MMBtu; prices in $/MMBtu. For more information, contact Bill Murphy at 720-264-6699.
New York spot
No.2 (1)
0.3% Resid LP (3)
0.3% Resid HP (3)
0.7% Resid (3)
1% Resid (3)
93.25-93.29
81.72-81.74
79.22-79.24
66.97-66.99
64.57-64.59
14.92
13.08
12.68
10.72
10.33
Source: Platts data
1= barge delivery; 2= pipeline delivery; 3= cargo delivery
7
Copyright © 2014 McGraw Hill Financial
Gas Daily
could raise the absolute cost to producers while at the same time boosting drilling
efficiency. “Say basically you might be paying 5% more, but maybe you’re getting
10% more out of each well. That’s actually a net gain for you. What kind of synergies
might we see from a technological standpoint? We could see rig efficiencies rise.”
Increasing drilling efficiencies is a major issue for producers as they continue
to expand into shale areas while commodity costs drift lower, the analysts noted.
In order to get the deal past antitrust regulators at the US Department of
Justice, Halliburton said Monday that it could divest some $7.5 billion worth of
its business. Although the company didn’t specify what parts of the business it
could shed, analysts pointed to cementing, drill bits, directional drilling, some
analytical services and stimulation vessels in the Gulf of Mexico.
Simmons & Company analyst Bill Herbert said that fracking “should be a nonissue given the fragmented nature of the business. Baker Hughes’ frack business
comprises an embarrassingly small percentage of its earnings.”
Analysts at Cowen & Company took a contrarian view of the merger, saying
that “oil companies want choices, not global duopolies.”
“We think it’s likely that not only will oil companies write letters to regulators, but that they will increasingly award tenders to others to attempt to build
up third competitors in many product lines. Weatherford International is best
positioned to benefit from this,” the analysts said.
Analysts at Credit Suisse agreed, saying that “Broadly speaking, operators
prefer to have competition in the oilfield service sector, and having to choose
between two large players is not ideal.”
Some mid-cap service companies would likely benefit from the consolidation,
“but lack of size, at least at this point, will limit them from emerging as the number three,” Credit Suisse said.
Revenues from the combined companies were $51.8 billion in 2013, with
more than 136,000 employees and operations in more than 80 countries. The
deal is subject to shareholder and regulatory approval, and the firms expect closing in the second half of 2015. The deal includes a $3.5 billion breakup fee payable by Halliburton if it fails to obtain antitrust approvals.
— Stephanie Seay
GAS DAILY
Tuesday, November 18, 2014
Subscriber Note:
Following a period of feedback that ended October
24, Platts will add to its monthly bidweek listing
Transcontinental Gas Pipeline Corp., zone 5 delivered,
effective January 2, 2015.
Platts is adding the new listing on January 2,
2015, covering late December bidweek trading for
January delivery. Trading in the delivered monthly
market in Transco’s zone 5, which extends from the
Georgia/South Carolina border to the Virginia/Maryland
border, has demonstrated a level that supports a
robust pricing location. Platts already publishes daily
spot-gas prices for this location.
The new monthly location will appear in the
“Northeast” section of the “Market Center Spot
Gas Prices” table in Inside FERC’s Gas Market
Report, and Platts Natural Gas Alert pages 433 and
495. Additionally, the new listing will appear in the
“Northeast” section of the “Market Center Bidweek
Physical Basis Prices” table in Inside FERC’s Gas
Market Report.
The description for the daily spot-gas point as
published in the Platts methodology and specifications
guide is as follows:
Transco, zone 5 delivered
Deliveries from Transcontinental Gas Pipe Line
on the 30-inch, 36-inch and 42-inch lines from the
Georgia/South Carolina border to the Virginia/Maryland
border. Deliveries into Transco at the Pleasant Valley
receipt point near Fairfax, Virginia, from Dominion’s
Cove Point LNG terminal are not included.
Please send any additional comments to [email protected] and pricegroup@platts.
com. For written comments, please provide a clear
indication if comments are not intended for publication
by Platts for public viewing.
Platts will consider all comments received and will
make comments not marked as confidential available
upon request.
Volume 31 / Issue 223 / Tuesday, November 18, 2014
ISSN: 0885-5935
Senior Editor
Stephanie Seay
865-690-4319
Gas Daily is published daily by Platts, a division of McGraw Hill Financial.
Registered office Two Penn Plaza, 25th Floor, New York, NY 10121-2298
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Editors
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Prices, indexes, assessments and other price information published herein are
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