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Declining utility demand drags down New England spot gas prices

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Declining utility demand drags down New England spot gas prices

Increasedflows to interconnected pipelines during the week ended March 29 keptAlgonquin Gas TransmissionLLC system utilization elevated year over year, but spot naturalgas prices remained well below the year-ago level, as overall demand reflecteda decline driven by reductions in deliveries to power generators and gasutilities.

Duringthe week, flows at Millennium Mainline averaged 1.54 Bcf/d for a utilization rateof 99.2%, versus the March 2015 average of 96.9% and the prior-winter averageof 94.7%. The Southeast and Stony Point compressor stations saw utilizationrates of 99.8% and 100.5%, respectively, against the average of 93.6% and 94.5%in the previous winter.

at delivery pointsalong the system during the report week were 6.5% lower than in the year-agoweek at an average at 2.35 Bcf/d, while nominations at receipt points were down7.5% over the same period also at about 2.35 Bcf/d.

Subdueddemand throughout the review period sapped spot natural gas prices at AlgonGates that reached a high index of only $1.550/MMBtu before ultimatelyaveraging at $1.384/MMBtu over the course of the report week, reflecting a74.2% dip from the year-ago level.

Althoughincreased deliveries to interconnected pipelines boosted pipeline utilizationduring the review week, a decline in power-sector demand and reductions in gasutility demand drove down overall demand levels.

Together,deliveries to power generators and gas utilities accounted for 52.7% of theweek's total average demand. Power-sector demand was down 1.4% year over yearat 343,032 Dth/d and LDC demand was 16.4% lower than in the prior year at898,451 Dth/d, while off-system demand was up 1.5% at 1.11 Bcf/d.

At720,271 Dth/d and 378,358 Dth/d, respectively, nearly all of the week'soff-system demand flowed into interconnections with andIroquois Gas Transmission SystemLP, with Texas Eastern logging a 9,963 Dth/d decline from theprior-year figure and Iroquois notching a 55,254 Dth/d year-on-year increase.

LDCdemand during the week mostly deflated versus the year-ago level, with onlyConnecticut Natural GasCorp., Orange andRockland Utilities Inc. and Colonial Gas Co. posting gains.

NoLNG supply found its way on to the system during the week in review, asinterconnections with TennesseeGas Pipeline Co., Millennium Pipeline Co. LLC and Texas Eastern met 96.5%of the deliveries to Algonquin. Tennessee Gas saw Algonquin deliveries fall by147,067 Dth/d versus the year-ago level to 959,380 Dth/d, and MillenniumPipeline saw flows to Algonquin drop by 133,064 Dth/d year on year to 692,367Dth/d, while Texas Eastern saw deliveries to Algonquin climb by 163,313 Dth/dover the same period to 611,502 Dth/d.

Market prices and includedindustry data are current as of the time of publication and are subject tochange. For more detailed market data, including power, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages. To view operational statistics oninterstate natural gas pipelines, go to our Pipeline Summary Page. To view natural gas operational flow datafor receipt or delivery points, go to our Operational Capacity by Point Page.