Bloomberg News

Canadian Gas Declines as Mild Northeast Weather Pares Demand

December 14, 2011

Dec. 14 (Bloomberg) -- Canadian natural gas fell amid analyst forecasts that mild weather in the U.S. Northeast pared demand for stockpiles of the fuel last week.

Alberta gas dropped 2.2 percent on speculation inventories fell 90 billion cubic feet last week, the median of 17 analyst estimates compiled by Bloomberg. The five-year average change for is a decrease of 142 billion, according to Energy Department data. Heating demand in the Northeast trailed normal by 29 percent in the week ended Dec. 10, Weather Derivatives said.

“We didn’t start taking gas out of storage until the end of November,” said Carl Neill, an energy consultant with Risk Management Inc. in Atlanta. “We haven’t really used any yet.”

Alberta gas for January delivery declined 6.5 cents to C$2.93 a gigajoule ($2.67 per million British thermal units) as of 3:15 p.m. New York time, according to NGX, a Canadian Internet market.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system. NGX Alberta gas has slipped 20 percent so far this year.

Gas for January delivery tumbled 14.3 cents, or 4.4 percent, to settle at $3.136 per million Btu on the New York Mercantile Exchange.

Spot gas at the Alliance delivery point near Chicago fell 2.19 cents to $3.203 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day to the Midwest from western Canada.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas fell 5.15 cents, or 1.5 percent, to $3.3278, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was down 3.58 cents to $3.5028 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet, 54 million below its target.

Gas was flowing at a daily rate of 2.45 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 1.78 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 642 million cubic feet. The system was forecast to carry 2.01 billion cubic feet today, about 76 percent of its capacity of 2.65 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 2.76 billion cubic feet at 2:05 p.m.

--Editors: Charlotte Porter, David Marino

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net

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


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