Canadian Natural Gas Gains on Colder Weather, Pipeline Blast

Canadian natural gas rose after a pipeline blast restricted shipments through Ontario and as forecasters predicted colder-than-normal weather in the U.S. Midwest in the next three days.

Demand for heat in the Midwest will be 5 percent above normal Feb. 25, according to Belton, Missouri-based forecaster Weather Derivatives. Chicago’s high will be 31 degrees Fahrenheit (minus 5 Celsius) on Feb. 26, 9 degrees below normal, State College, Pennsylvania-based AccuWeather Inc. said.

TransCanada Corp., the pipeline that carries most of the gas produced in Canada, is assessing damage after an explosion Feb. 19 shut Line 2 of its three-line network in northeastern Ontario. The company said it’s operating Line 1 and working on Line 3 of the network, which links natural-gas fields in Alberta with points in central Canada and the U.S. Northeast.

“Until Line 3 has been returned to service, it is unlikely that any discretionary services through the impacted area will be authorized,” the Calgary-based company said today in a notice on its website.

Gas at the Alliance Pipeline delivery point near Chicago rose 5.9 cents to $4.1043 per million British thermal units on the Intercontinental Exchange. Alliance is an express line that can carry about 1.5 billion cubic feet a day to the Midwest from western Canada.

Alberta Gas

Alberta gas for March rose 2 cents to C$3.29 per gigajoule ($3.14 per million Btu) as of 4 p.m.New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange is shipped to users in Canada and the U.S. Northeast, Midwest and West Coast. NGX issued a capacity constraint notice for parts of Ontario effective today.

Natural gas for March delivery fell 0.9 cents to $3.867 per million Btu on the New York Mercantile Exchange.

At the Kingsgate point on the border of Idaho and British Columbia, prices gained 6.49 cents to $3.8739 per million Btu, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas jumped 12.44 cents, or 3.2 percent, to $3.9726.

Volume on TransCanada’s Alberta system, the biggest gas- gathering network in the nation was 16.6 billion cubic feet, about 246 million above its target as of 2:30 p.m. in New York. Volume on the system decreased by 294 million cubic feet in the past 24 hours.

Flow Rate

Gas was flowing at a daily rate of 3.85 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.66 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 968 million cubic feet. The system was forecast to carry 1.79 billion cubic feet today, about 65 percent of capacity.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 3.01 billion cubic feet at 1:50 p.m.

(Source: http://www.bloomberg.com/news/2011-02-22/canadian-natural-gas-gains-on-colder-weather-pipeline-blast.html)