Western Price Survey
March 16, 2018
Southern California Gas Co. notified customers of pipeline capacity reductions as it continues dealing with issues on several natural gas transmission pipelines.
SoCal Gas notified customers March 10 it would reduce pipeline capacity in its Southern Zone, which stretches from the Mexican border to north of the Ehrenberg/Blythe receipt point, to a total of 700 MMcf/day.
Pipeline flows in this zone, in periods of increased demand, are typically greater than 1,000 MMcf/day, according to the U.S. Energy Information Administration. After cold temperatures starting March 13 led the utility to raise Southern Zone pipeline capacity to 900 MMcf/day, SoCal Gas reduced capacity to 800 MMcf/day on March 16 and expects it to range between 700 and 800 MMcf/day for the next few days.
Meanwhile, the California Public Utilities Commission, citing concerns about SoCal Gas’ storage inventory, system operations, and ability to deliver gas this summer and next winter, on March 13 directed the utility to prepare a plan to increase injections at all of its gas storage fields for reliability purposes. The CPUC characterized regional storage as “critically low.”
Constraints coupled with pipeline outages and colder weather may prompt withdrawals from Aliso Canyon, according to EnergyGPS.
Analysts noted that continued uncertainty may result in generator curtailments and additional price volatility through the end of March.
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Responding to the supply constraints, Southern California CityGate natural gas prices rose to $5.48/MMBtu March 13, which was the high for the hub in the Thursday-to-Thursday trading period. The hub gained 43 cents in trading, ending at $3.24/MMBtu.
Nationally, working natural gas in storage was 1,532 Bcf as of March 9, according to U.S. Energy Information Administration estimates. This is a net decrease of 93 Bcf compared to the previous week.
Henry Hub gas spot prices shed 4 cents in the trading period, ending at $2.67/MMBtu.
Western natural gas prices varied in March 8 to March 15 trading. While El Paso-Permian Basin gas shed 9 cents to $1.74/MMBtu, Sumas gas picked up 46 cents to end at $2.12/MMBtu.
Western peak power values varied. Mid-Columbia daytime power values added $2.25 to reach $23.05/MWh in trading, while South of Path 15 prices lost the most in trading, down $7.30 to $28.65/MWh.
Off-peak power values varied nominally in trading. While California-Oregon Border prices remained even, Mid-Columbia added 85 cents to reach $20.15/MWh. Palo Verde values fell $1 to $23.50/MWh by March 15.
Demand on the California Independent System Operator grid reached 27,922 MW March 12. –Linda Dailey Paulson.
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