Bloomberg News

Canadian Natural Gas Falls Amid Ample Supplies, Mild Weather

January 29, 2012

Jan. 27 (Bloomberg) -- Canadian natural gas fell on mild U.S. weather that has kept supplies above seasonal norms.

Alberta gas dropped 4.3 percent. Heating demand in the U.S. will trail normal by 25 percent through Feb. 3, according to forecaster Weather Derivatives. Mild weather has stemmed withdrawals from gas stockpiles, leaving U.S. inventories 21 percent above the five-year average as of last week, according to the Energy Department.

“Inventories are at very high levels,” said Gordy Elliott, a risk-management specialist at INTL FC Stone LLC in St. Louis Park, Minnesota. “It’s still bearish for gas.”

Alberta gas for February delivery dropped 9.75 cents to C$2.15 a gigajoule ($2.04 per million British thermal units) at 11:35 a.m. New York time on NGX, a Canadian Internet market. NGX Alberta gas is down 0.9 percent this week.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system.

Natural gas for February delivery on the New York Mercantile Exchange rose 7.7 cents to $2.682 per million Btu as of 11:40 a.m.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 17.3 billion cubic feet, 465 million above target.

Gas was flowing at a daily rate of 2.55 billion cubic feet at Empress, Alberta. The fuel is transferred to TransCanada’s main line at Empress.

Gas Flows

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.19 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 307 million cubic feet. The system was forecast to carry 1.71 billion cubic feet today, or 85 percent of its capacity of 2.02 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 3.08 billion cubic feet at 10:35 a.m.

--Editors: Charlotte Porter, Bill Banker

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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