Canada Natural Gas Gains as Cooler Weather in U.S. Boosts Demand

Canadian natural gas prices rose amid speculation that cooler-than-normal weather in the northern U.S. will boost furnace use.

Demand for heat in the Midwest will exceed normal by 25 percent for the next week, according to Belton, Missouri-based Weather Derivatives. Temperatures in Chicago will dip as low as 28 degrees Fahrenheit (minus 2 Celsius) April 16, about 12 degrees below normal, said AccuWeather Inc., a State College, Pennsylvania-based forecaster.

“It’s enough to generate some impressive heating demand for this time of year,” said Travis Hartman, a meteorologist and energy manager with MDA EarthSat Weather in Gaithersburg,Maryland. “With that we’ll see some increased residential energy consumption to keep the houses warm.”

The U.S. Midwest, Northeast and Northwest are the largest consuming regions for Canada’s gas exports.

Gas at the Alliance Pipeline delivery point near Chicago rose for the first time in a week, gaining 6.09 cents to $4.1071 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.

At the Kingsgate point on the border of Idaho and British Columbia, gas rose 0.46 cent to $3.9362 per million Btu on the exchange. At Malin, Oregon, where Canadian gas is traded for California markets, gas was up 2.7 cents to $4.0504.

Alberta Gas

Alberta gas for May delivery rose 2.5 cents to C$3.31 per gigajoule ($3.28 per million British thermal units) as of 1:55 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., and is priced on TransCanada’s Alberta system.

Natural gas for May delivery on the New York Mercantile Exchange was up 6.4 cents to $4.105 per million Btu.

Volume on TransCanada Corp.’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.8 billion cubic feet as of 12:30 p.m. in New York, about 421 million above target.

Gas was flowing at a daily rate of 2.58 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 1.44 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 837 million cubic feet. The system was forecast to carry 1.68 billion cubic feet today, about 67 percent of its capacity of 2.5 billion.

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 2.96 billion cubic feet at 12:50 p.m. High linepack prompted Spectra to order shippers not to add more gas to the system than their contracts allow.

(Source: http://www.bloomberg.com/news/2011-04-11/canada-natural-gas-gains-as-cooler-weather-in-u-s-boosts-demand.html)