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New England spot gas prices fall despite increased Algonquin demand, supply

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Essential Energy Insights - September 17, 2020

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New England spot gas prices fall despite increased Algonquin demand, supply

systemdemand and supply were higher than in the year ago during the week ended April 26,but pipeline utilization remained mixed versus historical averages and spot naturalgas prices were weaker than in the prior year.

Duringthe week, flows at the Millennium Mainline segment averaged 931,857 Dth/d for autilization rate of 60.1%, below the April 2015 average of 84.1% and the prior-summeraverage of 81.8%. The Southeast and Stony Point compressor stations saw utilizationrates of 60.5% and 99.9%, respectively, against the summer 2015 average of 89.9%and 91.7%.

at delivery points alongthe system were 5.9% higher year on year at an average at 2.15 Bcf/d, while nominationsat receipt points that averaged at 2.05 Bcf/d were up by 0.8% from the year-agolevel.

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Althoughdemand trended near to above the year-ago level throughout the report period, spotnatural gas prices at Algon Gates remained deflated. The spot pricing index peakedat $2.580/MMBtu on April 26 before ultimately averaging at $2.346/MMBtu over thecourse of the review week, reflecting a 33.0% drop from the prior-year figure.

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Deliveriesto interconnected pipelines, power generators and gas utilities were higher yearover year, in spite of pipeline utilization having mixed comparisons to historicalaverages.

Flowsto interconnected pipelines, the power sector and gas utilities accounted for virtuallyall of the week's total average demand. Off-system demand climbed by 0.8% from theyear-ago level to 919,003 Dth/d and power-sector demand jumped by 22.6% year onyear to 548,152 Dth/d, as LDC demand rose by 1.5% over the same period to 680,935Dth/d.

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At 709,051Dth/d and 203,308 Dth/d, respectively, nearly all of the week's off-system demandflowed into interconnections with TexasEastern Transmission LP and IroquoisGas Transmission System LP, with Texas Eastern posting a 98,429 Dth/dincrease in supply from Algonquin versus the prior-year level and Iroquois Gas notchinga 80,542 Dth/d decline in Algonquin deliveries over the same period. saw deliveriesfrom Algonquin average 9,426 Dth/d over the course of the report week.

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LDC demandwas thoroughly varied relative to levels seen in the previous year, with the largestincrease observed at NSTAR Gas Co.and the most significant reduction seen at BayState Gas Co.

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No LNGsupply found its way on to the system during the review period, as interconnectionswith Tennessee Gas, Millennium PipelineCo. LLC and Texas Eastern met 92.0% of the deliveries to Algonquin.Tennessee Gas Pipeline saw flows to Algonquin rise by 52,087 Dth/d year on yearto 1.04 Bcf/d and Millennium Pipeline saw deliveries to Algonquin increase by 93,659Dth/d from the year-ago level to 449,785 Dth/d, as flows from Texas Eastern falteredby 93,917 Dth/d over the same period to 396,080 Dth/d.

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Market prices and included industrydata are current as of the time of publication and are subject to change. For moredetailed market data, including power, natural gas andcoal indexprices, as well as forwards andfutures, visit our Commodities Pages.To view operational statistics on interstate natural gas pipelines, go to our Pipeline Summary Page. To view naturalgas operational flow data for receipt or delivery points, go to our Operational Capacity by Point Page.