For the first time in years, natural gas takeaway capacity constraints from the Marcellus/Utica producing region appear to be easing, even as production volumes from the area continue to record new highs. That’s allowed regional supply prices this year to strengthen dramatically relative to national benchmark Henry Hub. A closer look at pipeline flow data indicates these developments stem from shifting gas flows that coincide with the ramp-up of Energy Transfer Partners’ Rover Pipeline. In today’s blog, we continue our update of the Northeast gas market with the latest on Rover’s gas receipts, along with its effects on other regional takeaway capacity and price relationships.
This is Part 3 in our series looking at recent shifts in the U.S. Northeast’s natural gas market. In Part 1, we started with a macro look at the critical role the Northeast gas production continues to play in the overall U.S. supply-demand picture. Lower-48 gas production in 2018 to date has averaged ~8 Bcf/d higher year-on-year. Nearly 50% of that growth has come from the Northeast. Moreover, given that the Northeast produces much more gas than it needs, the bulk of that incremental supply has flowed out of the region to other markets, including the Midwest and Gulf Coast states. Marcellus/Utica volumes have more than doubled in the five years since 2013, climbing by 16 Bcf/d to an average of 28 Bcf/d in 2018 to date, up from about 12 Bcf/d in 2013.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
Until now, production has continued to outpace takeaway capacity, with incremental production volumes quickly inundating any available space on the pipes and keeping supply-area prices at severe discounts compared to other markets (see Living in Fast Forward Curves). However, as we discussed in Part 2, that imbalance has seen a dramatic — albeit partial — correction this year. Even as Marcellus/Utica supply continues to set record highs this summer, prices at Dominion South (Dom S) — the representative pricing hub — have strengthened compared to prior years. After tanking to more than $1/MMBtu discounts versus Henry Hub each of the past four summers, Dom S cash prices this July and August averaged less than $0.40/MMBtu behind Henry.
Join Backstage Pass to Read Full Article
About the song
"Dog Days Are Over" was written by Florence Welch and Isabella Summers. It appears as the first song on Florence and the Machine's debut studio album, Lungs. The song was inspired by a giant art installation titled "Dog Days Are Over" that the singer Florence Welch used to see daily when she rode her bike over the Waterloo Bridge in London. Released as a single in December 2008, it went to #21 on the Billboard Hot 100 Singles chart. It has been certified 4x Platinum by the Recording Industry Association of America. Personnel on the record were: Florence Welch (vocals, percussion), Isabella Summers (piano, percussion), Rob Ackroyd (guitar), Tom Monger (harp), Christopher Lloyd Hayden (drums), James Ford (bass), and Ian Burdge (cello).
Lungs was recorded in 2007-08 at The Garden, The Pool, The Synagogue, Strong Room 33, Space Cave, The Smokehouse, and The Dairy in London. The album was produced by Paul Epworth, James Ford, Charlie Hugall, Stephen Mackey, Isabella Summers, and Eg White. Released in July 2008, it went to #14 on the Billboard 200 Albums chart and has been certified 2x Platinum by the RIAA. Six singles were released from the LP.
Florence and the Machine is a British indie rock group formed in London in 2007 by lead vocalist Florence Welch, keyboardist Isabella Summers, guitarist Rob Ackroyd, harpist Tom Monger, and drummer Christopher Lloyd Hayden. They feature the powerful vocals of Florence Welch, who layered over the baroque and art-pop music of the Machine. They have released five studio albums, three live albums, four compilation albums, six EPs, and 33 singles. They have sold over 4 million records worldwide. They have won two Brit Awards and a Meteor Award. Beyoncé cited the group as an influence on her album, 4. Twelve members have passed through the group since its formation. They still record and tour and will be releasing their sixth studio album, Everybody Scream, on Halloween.
