Bloomberg News

Canadian Natural Gas Falls as Inventories Reach Four-Month High

June 05, 2012

Canadian natural gas fell as domestic storage levels rose to a four-month high.

July gas in Alberta declined 1.8 percent. Canadian supplies gained 17.8 billion cubic feet, or 3.3 percent, to 553.2 billion in the week ended May 25, the most since Feb. 3, according to data compiled by Bloomberg and Canadian Enerdata Ltd.

“It’s just relatively slack export demand,” Martin King, an analyst with FirstEnergy Capital Corp., in Calgary, said in a telephone interview. “We’ve done some strong injections in the last couple of days and that says some supply was getting backed up in the system and it could be carrying over into today.”

Alberta gas for July delivery fell 3.5 cents to C$1.92 a gigajoule ($1.75 per million British thermal units) 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.

Natural gas for July delivery on the New York Mercantile Exchange rose 3.1 cents to settle at $2.446 per million Btu.

Gas at the Alliance Pipeline delivery point near Chicago gained 6.54 cents, or 2.8 percent, to $2.4442 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.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas advanced 2.52 cents to $2.2047, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas rose 2.33 cents to $2.2977 per million Btu.

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 1.92 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 2.02 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 281 million cubic feet. The system was forecast to carry 1.7 billion cubic feet today, or 86 percent of its capacity of 1.98 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 2.78 billion cubic feet at 1:50 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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