Texas Eastern lifts Entriken gas force majeure ahead of Northeast winter storm

Texas Eastern Transmission lifted a force majeure Jan. 5 on natural gas flows through its Delmont, Pennsylvania-to-Linden, New Jersey, market zone following the completion of repair work on its Entriken, Pennsylvania, compressor station, the pipeline company said.

The move should allow for additional volumes of Appalachia gas to flow during a winter storm forecast to occur Jan. 6-8.

Texas Eastern announced the lifting of the force majeure the morning of Jan. 5 in a critical notice on its website. The company declared force majeure on the morning of Jan. 4 because of an unplanned outage at the compressor station. The outage would have led to reduced capacity for the entire west-to-east segment, according to a critical notice, with the restrictions to come into effect for gas day Jan. 5. Flows past Entriken were planned to be limited to 2.84 Bcf/d, a level which has been exceeded four times in the last 30 days in response to higher demand.

Instead, the needed repairs on the compressor station were resolved within a 24-hour period, with Texas Eastern lifting all Entriken-related capacity restrictions by 9 am ET Jan. 5.

The unfettered westbound capacity might be called upon over the next several days, with forecasts showing a drop in temperatures and elevated gas demand for heating across the Northeast.

Northeast winter storm

The National Weather Service forecast an "increased threat" of a winter storm stretching from the Tennessee Valley into areas further northeast starting Jan. 6.

The agency forecast that New York City would see lows fall below freezing Jan. 6 and plunge into the 20s F Jan. 7-8. The metropolitan area's highs were forecast in the 30s F Jan. 6-8. The cold snap was anticipated to extend further up and down the Eastern Seaboard, with Washington and Boston forecast to see similar temperature ranges as New York City Jan. 6-8.

The average Northeast temperature was forecast to drop to 33 degrees Fahrenheit on Jan. 6, then to 27 F Jan. 7 and 26 F Jan. 8, according to S&P Global Platts Analytics and CustomWeather.

Northeast spot gas prices rose across the board in Jan. 5 trading for next-day flows, Platts preliminary settlement data shows.

Cash Texas Eastern, M-3 gained $2.01 to trade at $7.07/MMBtu on Jan. 5, while cash Transco, Zone 6, NY settled $2.025 higher to reach $7.66/MMBtu.

Further north, New England gas demand benchmark Algonquin city-gates moved $4.825 higher at $11.78/MMBtu.

Outlook

US Northeast spot gas prices have roiled with volatility so far this winter season, with large daily price swings common.

Cash Algonquin city-gates has seen 21 trade days with daily price swings of $1 or more since the start of November, up from 13 days during the same period in winter 2020-2021 and 16 days in winter 2019-2020.

This weather-related volatility is likely to continue into the middle of January, with CustomWeather forecasts showing the region's average temperature fluctuating between 17 F and 38 F over the next two weeks.

Possible daily volatility aside, balance-of-the-month contracts show market expectations for extended elevated prices.

Texas Eastern, M-3's balmo contract was trading at $8.51/MMBtu on the Intercontinental Exchange as of 1:30 pm ET (1830 GMT) Jan. 5, up from the prior settlement of $7.50/MMBtu. The Algonquin, city-gates balmo contract was trading at $17.97/MMBtu, up from a prior settlement of $15.25/MMBtu.