NEXUS

The U.S. Northeast natural gas market has had a volatile few weeks. Regional gas production has surged, averaging 30.4 Bcf/d in the second half of October (2018), up 800 MMcf/d from the first half of the month and up nearly 1 Bcf/d from the September average. Normally (for the past several years), those kinds of supply gains, particularly in a shoulder month and during maintenance season, would have one result: Marcellus/Utica prices taking a nosedive. But that’s not exactly the case this year. Instead, Appalachian spot prices have been on a wild ride the past few weeks, swinging from barely $1.00/MMBtu (or more than $2.00/MMBtu below Henry Hub) on October 8, to over $3.00 (just $0.12 under Henry) on October 24 — the highest levels seen at this time of year since 2013, both in terms of outright prices and basis differentials to Henry Hub. The catalyst is nearly 3 Bcf/d of new takeaway capacity from the growing producing region that has been added in recent weeks, including, most recently, partial service on a brand-new route on Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission. What does this latest round of expansions and the resulting basis strength mean for the Northeast and its downstream gas markets? In today’s blog, we discuss highlights from our new 26-page report on evolving Northeast gas takeaway capacity utilization and additions, and their effects on price relationships.

Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission pipeline saw its first natural gas flows this week, as the Federal Energy Regulatory Commission (FERC) approved partial service on the project, opening another nearly 1 Bcf/d of capacity from Appalachia’s Marcellus/Utica producing region to the Midwest. NEXUS marks the last big westbound takeaway project from the Northeast, except for the remaining pieces of Energy Transfer’s (ETP) Rover Pipeline. It also marks the escalation of gas-on-gas competition in the Midwest market, where U.S. Midcontinent and Canadian gas supplies are also battling it out for market share. Today, we take a closer look at the NEXUS project and its potential implications for the Northeast and Midwest gas markets.

While many are getting ready for the usual trappings of fall — Halloween, Thanksgiving turkey and Black Friday sales — Northeast natural gas market participants are gearing up for their own seasonal ritual — gas pipeline takeaway expansions. Two days ago, Enbridge/DTE Energy’s 1.5-Bcf/d NEXUS Gas Transmission pipeline received approval to start partial service for nearly 1 Bcf/d of capacity. That follows Williams/Transco’s Atlantic Sunrise natural gas project, which launched service for its full 1.7 Bcf/d of southbound capacity last week (on October 6). Also last week, TransCanada/Columbia Gas Transmission was given the nod for partial service on both its Mountaineer Xpress and WB Xpress projects. Then there’s Energy Transfer’s Rover Pipeline, which is awaiting approval for its final two laterals. Combined, these projects are poised to add more than 4.0 Bcf/d of Marcellus/Utica takeaway capacity before the coldest months of winter arrive. What does that mean for the Northeast gas market this winter? Today, we provide an update on Atlantic Sunrise’s early effects and other upcoming projects completions.

On August 4, the U.S. Senate confirmed two new commissioners for the Federal Energy Regulatory Commission (FERC), restoring the three-member quorum legally required for FERC to vote. The Senate action ended a six-month dry spell during which FERC could not issue any orders, and thus could not approve any of the many pipeline projects pending there. What does it mean that FERC can act again to approve new projects? And does that mean the industry can move forward at the pace it needs? Today we explore these questions and assess what it will take to get some key gas infrastructure projects back on track.