Bloomberg News

Canadian Natural Gas Falls as Stockpiles Approach 10-Month High

September 30, 2011

Sept. 30 (Bloomberg) -- Canadian natural gas fell as storage levels approached a 10-month high.

Canadian supplies rose 20.7 billion cubic feet, or 3.3 percent, to 620.7 billion in the week ended Sept. 23, according to data compiled by Bloomberg and Canadian Enerdata Ltd., the most since the week ended Dec. 3.

“When you look at where they’re at, it’s almost a record high for them at this time of year,” Gordy Elliott, a risk- management specialist at INTL FCStone Inc. in St. Louis Park, Minnesota, said of Canadian gas supplies. “There’s oversupply with strong production and not enough demand,” he said in a telephone interview.

Alberta gas for October delivery fell 10.5 cents to C$3.315 per gigajoule ($3.01 per million Btu) as of 3:55 p.m. New York time, according to NGX, a Canadian Internet market.

November gas was down 8.5 cents to C$3.375 per gigajoule. Gas traded on the exchange is shipped to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.

Gas for November delivery on the New York Mercantile Exchange fell 8.1 cents to settle at $3.666 per million Btu.

Gas at the Alliance Pipeline delivery point near Chicago fell 15.22 cents, or 4 percent, to $3.6879 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry about 1.5 billion cubic feet a day to the Midwest from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas was down 20.12 cents to $3.5063, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas fell 14.44 cents to $3.6112 per million Btu.

Flow Rates

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 15.7 billion cubic feet, about equal to the target, as of 3 p.m. New York time.

Gas was flowing at a daily rate of 2.5 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.94 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 233 million cubic feet. The system was forecast to carry 1.64 billion cubic feet today, about 88 percent of its capacity of 1.88 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.79 billion cubic feet at 2:50 p.m.

--Editors: Bill Banker, Richard Stubbe

To contact the reporter on this story: Colin McClelland in Toronto at cmcclelland1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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