GTN

Natural gas markets in the U.S. Northwest have been in turmoil ever since a rupture on Enbridge’s BC Pipeline system over a month ago (on October 9) disrupted Canadian gas exports to Washington State at the Sumas border crossing point. Service on the affected line has been restored but at a reduced operating pressure for now, and Canadian gas deliveries to Sumas remain at about half of their pre-outage levels, creating supply shortages in the region. Spot natural gas prices at the Sumas, WA, trading hub have been volatile, soaring well above Henry Hub and rocketing to a record outright price of nearly $70/MMBtu late last week. The outage has reverberated across the Western U.S. gas market, sending regional prices reeling as gas flows adjusted to help offset supply shortages. Today, we examine the knock-on market effects of the outage on Western gas flows and prices, and potential implications for the winter gas market.

This spring, TransCanada launched service for its 230-MMcf/d Sundre Crossover expansion, increasing transportation capacity for moving Alberta natural gas production to the U.S. Pacific Northwest. That may seem like a trifling volume in the big scheme of the North American gas market. But considering that Canadian and U.S. producers already are locked in a heated battle for market share of U.S. demand and pipeline capacity, it’s enough for Canadian supply to gain ground. Since the Sundre in-service date, deliveries to the Kingsgate point at the British Columbia-Idaho border have ratcheted up to the highest levels in at least a decade. As a result, Canadian exports have managed to elbow out Rockies gas from the California market, and set off a ripple effect that’s pushing more gas east to the Midcontinent. Today, we examine the shifting gas flows in the West.

As Canada’s natural gas exports to the Eastern U.S. have been pushed out by growing Marcellus/Utica gas supply, they’ve been flooding the U.S. West Coast. TransCanada is planning expansions of its Alberta system to send more gas across the western border, setting the stage for a showdown with Rockies gas supply. At the same time, the rise of renewable energy in California and the Pacific Northwest poses a constraint for gas demand growth in the region. Today, we look at recent shifts in border flows to the West Coast and prospects for future growth.