Bloomberg News

Canadian Natural Gas Rises on High Temperatures for U.S. South

April 03, 2012

Canadian natural gas rose as U.S. nuclear generation climbed from near a 10-month low and cooling demand approached double normal levels in parts of the South.

Alberta gas gained 2.8 percent after U.S. reactor output advanced 364 megawatts to 78,774, up from the lowest level since May 24, according to filings with the Nuclear Regulatory Commission and data compiled by Bloomberg.

Markets are responding to a “compounded effect” of “cooling demand and spring nuclear maintenance season in the U.S., which puts more onus on natural gas,” Eric Bickel, a natural gas analyst at Summit Energy Services in Louisville, Kentucky, said in a telephone interview.

Alberta gas for May delivery rose 4.75 cents to C$1.75 a gigajoule ($1.68 per million British thermal units) as of 4:15 p.m. New York time on 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. (TRP)’s Alberta system. NGX gas is down 34 percent this year.

Natural gas for May delivery on the New York Mercantile Exchange rose 3.5 cents to settle at $2.187 per million Btu.

The high temperature in Atlanta today may be 85 degrees Fahrenheit (29 Celsius), 15 above normal, according to AccuWeather Inc. in State College, Pennsylvania. Demand for cooling may be 91 percent above normal in the south-central U.S., said Weather Derivatives in Belton, Missouri.

Spot Market

Spot gas at the Alliance delivery point near Chicago gained 12.43 cents, or 6.3 percent, to $2.1051 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas rose 10.46 cents, or 5.6 percent, to $1.9751 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, gas advanced 10.45 cents to $2.042.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.7 billion cubic feet.

Gas was flowing at a daily rate of 2.51 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 1.9 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 838 million cubic feet. The system was forecast to carry 1.82 billion cubic feet today, or 68 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 3.1 billion cubic feet at 2:35 p.m.

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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