Houston — The Aliso Canyon natural gas storage facility, which has seen limited use for almost three years, has again been pressed into service, according to Southern California Gas.
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"Due to cold weather over the last week and high customer demand for natural gas, all SoCal Gas storage fields, including Aliso Canyon, have been used to provide system reliability," the company said on its web site.
The withdrawal had little effect on spot gas prices, which were coming off a three-week high reached Tuesday when SoCal Gas city-gates hit $7.65/MMBtu. The last time it finished higher was December 10, when it closed the day trading at $8.535/MMBtu. On Thursday that pricing point shed 99.5 cents to come in at $6.655/MMBtu. In Friday trading, it was off another 80 cents to $5.86/MMBtu.
The withdrawal prompted SoCal Gas to issue a system-wide notice stating it would work with California balancing authorities to reduce power generation demand on the SoCal Gas system for Monday, boosting Southern California day-ahead power prices. SP15 on-peak day-ahead was up $3, trading in the mid-$40s/MWh area for Monday delivery.
This is the first withdrawal from Aliso Canyon this winter. The storage facility has been under capacity and withdrawal constraints since February 2016 following a leak at the site that took several months to repair. The facility can deliver about 1 Bcf/d. But California regulators have said gas cannot be taken out of Aliso Canyon except as a last resort.
That point came Thursday. Los Angeles saw temperatures peak in the upper 60s and lows were in the low 40s, which would give a boost to demand as customers used their furnaces.
Demand was also affected by other areas of Southern California, as some inland cities, such as Riverside, saw temperatures drop into the 30s, further boosting need.
Demand in the SoCal Gas footprint has been at high levels since the start of the year, topping the 4 Bcf/d mark three times and averaging 4.136 Bcf/d.
By contrast, the company's December demand averaged 2.691 Bcf/d.
Withdrawals from Aliso Canyon could continue as long as the cold weather persists, the company said.
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