Thursday, April 18, 2019

Welcome to a very busy Easter weekend edition of GasNewsOnline.com!  There are a host of critical notices from several of the country’s interstate natural gas pipeline companies about issues relating to changes in pipeline operating conditions. 

Plus, we’ll also update you on the latest publicly released news of the day and provide the first glimpse of May’s expected temperatures from the National Weather Service, too.  

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Working natural gas in storage was 1.247 Tcf as of Friday, April 12, 2019, according to US Energy Information Administration estimates. This represents a net increase of 92 Bcf (which was 5 Bcf greater than analyst estimates). 

Natural gas stocks were 414 Bcf (or 26%) below the five-year average for the same week. 

On the NYMEX, the May, 2019 natural gas futures price reacted to the news and was down about three cents on Thursday at approximately $2.49/MMBtu.   Natural gas prices declined to their lowest level in nearly three years due to a seasonal lull in heating and cooling demand combined with surging gas supplies. 

It is interesting to note that not a single month of today’s NYMEX natural gas futures strip (through April, 2021) showed a natural gas price above $3.00/MMBtu.

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During today’s quarterly earnings release and conference call, Kinder Morgan provided an update on a few natural gas pipeline projects currently in progress:

In the Permian area, construction continues on the Gulf Coast Express Pipeline (GCX) project. The remaining 40 miles of the 36-inch Midland lateral was placed in service at the beginning of April 2019. Construction is progressing well on the 42-inch mainline and compressor stations associated with the project, which remains on schedule for a full in-service date of October 2019.

The approximately $1.75 billion project is designed to transport about 2.0 Bcf/d of natural gas from the Permian Basin to the Agua Dulce, Texas area, and is fully subscribed under long-term, binding agreements.

Progress also continues on the Permian Highway Pipeline (PHP) project . The civil and environmental surveys are substantially complete, and the land acquisition process is underway.

The approximately $2 billion PHP Project is designed to transport up to 2.1 Bcf/d of natural gas through approximately 430 miles of 42-inch pipeline from the Waha, Texas area to the U.S. Gulf Coast and Mexico markets and is expected to be in service in October 2020, pending regulatory approvals.

On the East Coast, the first of ten liquefaction units of the nearly $2 billion Elba Liquefaction Project is expected to be placed in service by approximately May 1, 2019. The remaining nine units are expected to be placed in service sequentially, one per month thereafter.

The federally approved project at the existing Southern LNG Company facility at Elba Island near Savannah, Georgia, will have a total liquefaction capacity of approximately 2.5 million tonnes per year of LNG, equivalent to approximately 350 million cubic feet per day of natural gas.

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In summary, many interstate natural gas pipelines have posted critical notices to shippers requiring that they do not create pipeline imbalances caused by lack of market demand during the upcoming Easter holiday weekend.  Let’s review… 

Algonquin Gas Transmission:

Algonquin Gas Transmission (AGT) has limited operational flexibility to manage imbalances. Effective 9:00 AM CCT, Friday, April 19, 2019, AGT requires all delivery point operators keep actual daily takes out of the system equal to or greater than scheduled quantities regardless of their cumulative imbalance position unless otherwise coordinated with your operations account representative.

All receipt point operators are required to keep actual daily receipts into the system equal to or less than scheduled quantities regardless of their cumulative imbalance position unless otherwise coordinated with your operations account representative.

ANR Pipeline:

Southwest Mainline Capacity Reduction (Posted 4/18/19)

ANR will begin planned maintenance at the Havensville compressor station between April 29 and May 2.  The total SWML Northbound (LOC#226630) capacity will be reduced by the following:

90-MMcf/d (leaving 600-MMcf/d available) 4/29 – 5/2

Based on current nominations through the SWML, it is anticipated that this posting will result in the capacity allocation reduction of IT and Firm Secondary volumes.

Also from ANR:

SW Area Capacity Restriction (Posted 4/18/19)

From April 29th through May 4th, ANR will perform planned pipeline maintenance between its E.G. Hill and Gageby Compressor Stations in the Southwest Area (Zone 4). As a result, ANR will shut-in the Beaver-CIG (REC FR CIG) receipt point, DRN #16435.

The total E.G. Hill from Gageby (LOC #226643) capacity will be reduced by the following:

50-MMcf/d (leaving 175-MMcf/d available) 4/29 – 5/4

Based on current nominations, it is anticipated the above reductions will result in the curtailment of nominations associated with IT and Firm Catalog Receipt points in the affected area.  Also, interconnects along this segment may experience higher line pressures.

Colorado Interstate Gas (CIG):

In response to continuing and prolific natural gas production growth in the Denver-Julesburg Basin – and the mounting market need for timely transportation capacity – Colorado Interstate Gas Company, L.L.C. (CIG) is conducting a binding Open Season for additional firm capacity to be made available by approximately November 1, 2019.  The additional transportation capacity offered in this Open Season will have primary receipt rights into CIG’s 5C Line north of a proposed new interconnection (“High Five Meter Station”) with CIG’s High Plains Lateral to be constructed at approximately milepost 29, and will have primary delivery rights at the High Five Meter Station of the CIG 5C Line and the Wyoming Interstate Company, L.L.C. (“WIC”) facilities at Bowie. 

For more details, please check the CIG Electronic Bulletin Board.  The posting is dated April 18, 2019.

This binding Open Season will commence today (April 18, 2019) and is scheduled to close at 10:00 a.m. Mountain Time on May 8, 2019.  CIG intends to provide notification of capacity awards by 5:00 p.m. Mountain Time on May 9, 2019.

Questions concerning this Open Season should be directed to:  Greg Ruben (713-520-4870) or Laine Lobban (719-520-4344). 

Columbia Gas Transmission:

Columbia Gas Transmission, LLC (TCO) reminds customers of a station power outage at the Cobb Compressor Station scheduled for Saturday, April 27, 2019 through Sunday, April 28, 2019.   

Due to this maintenance, the below internal constraints will be set to Zero Total Capacity.  All production will be shut-in with the exception of a limited quantity that may be needed to serve localized markets. 

Cobb South MA18 (A03SOUTH)

Cobb Northeast MA18 (A03NORTH)

Cobb Northwest MA18 (A03LOW)

Cobb Line H (A03LINEH)

Cobb CS MA18 (COBBA03) 

East Tennessee Natural Gas:

Boyds Creek Compressor Station Outage – April 23 – 24

ETNG will be conducting a compressor station outage at its Boyds Creek Compressor Station (Boyds) on the 3300 line. During this outage, west to east capacity through Boyds will be reduced to approximately 80,000 Dth per day.

Based on historical nominations, restrictions may be required for interruptible and secondary services and potentially primary firm services.

Enable Gas Transmission:

This Operational Alert is being issued pursuant to Section 20, GT&C, of EGT’s Tariff to advise shippers system wide that they will be required to maintain actual receipts and deliveries commensurate with scheduled volumes, beginning on Friday, April 19, 2019 at 9:00 A.M. and continuing until further notice.

Due to limited storage capacity, EGT anticipates it may be unable to support imbalance positions and may reduce scheduled quantities intraday to balance actual receipts and deliveries necessary to maintain system deliverability and operational integrity.

The availability of balancing and non-ratable services will be limited.  Hourly non-ratable nominations, as well as the use of imbalance positions must be pre-approved or within the posted limits on EGT s Daily Operating Plan. EGT will continue to monitor the pipeline s pressure and imbalances and will, if necessary, take further actions, including the issuance of one or more Operational Flow Orders (OFO).

EGT will schedule receipts and deliveries in accordance with EGT s Tariff.  This Operational Alert will remain in effect until further notice and will be updated as more information becomes available.

Gas Transmission Northwest (GTN):

May 2019- GTN Fuel and Line Loss Percentage

Pursuant to Gas Transmission Northwest’s (GTN) Tariffed Fuel Adjustments Provision, for the period of May 01, 2019 through May 31, 2019, a fuel usage rate of 0.0021% per Dth/mile will be in effect.

This percentage is inclusive of GTN’s current fuel and line loss surcharge of 0.0000% per Dth per pipeline mile, which is in effect through December 31, 2019, in accordance with GTN’s approved tariff provision, “Adjustment Mechanism for Fuel, Line Loss, and Other Unaccounted For Gas.”

Gulf South Pipeline:

Index 818 I.L.I. Pig Run – Begins April 23, 2019 – Ends April 24, 2019

Expansion Area 19 (Mississippi) Delivery Scheduling Group.- Capacity could be impacted by as much as 300,000 dth/d for the duration of the maintenance.  Please contact your customer service representative if you have any questions.

Kinder Morgan Louisiana Pipeline (KMLP):

SEGMENT 140 – MLV #7 – AT OPERATING CAPACITY 

Effective for gas day Friday, April 19, 2019, Timely Cycle, and continuing until further notice, KMLP is at operating capacity for gas going southbound through Segment 140, located in Jefferson Davis Parish, Louisiana.  AOR/ITS and Secondary out-of-path Firm transports are at risk of not being fully scheduled. 

Mississippi River Transmission (MRT):

Due to the potential negative impact of significant shipper long imbalance positions on MRT storage withdrawal operations, MRT is issuing a System Protection Warning (SPW) effective 9:00 a.m. Thursday, April 18, 2019, and continuing until further notice.

During this time:

1) Shippers should avoid daily long imbalance positions

2) MRT may not schedule any nominations that result in a daily long position.

3) MRT may not accept any makeup of short positions

4) MRT may not schedule nominations that result in counter-seasonal injection.

Failure to comply with this SPW may result in the issuance of an OFO.  Nominations will be confirmed and scheduled in accordance with MRT s Tariff.

Southern Natural Gas:

Based on the current milder weather forecast and projected demand on Southern’s system for the Holiday weekend, we are implementing an OFO Type 6 for long imbalances on Southern’s contiguous pipeline system effective for the start of the gas day, Friday, April 19, 2019, and until further notice. In order to maintain the operational integrity of Southern’s system, it is essential that Shippers and Poolers remain in balance (including their available no-notice injection entitlements).

The OFO Type 6 order will subject each Shipper/Pooler to the following tiered imbalance penalties:

Daily Imbalance Penalty
(Percent of Allocated Deliveries ) ( Per Dth )

0 – 2% or < 200 dth No Penalty
> 2 – 5% $1.00
> 5 – 8% $ 5.00
> 8% $15.00

Since the projected operational conditions are affected by receipts exceeding deliveries, the penalty will apply only to each Shipper/Pooler that has a net long imbalance (i.e., the party’s total allocated receipts exceed total allocated deliveries including available no-notice storage injections).

Tennessee Gas Pipeline:

OFO DAILY CRITICAL DAY 1 FOR ALL OF ZONES L, 1, 2, 3, 4, 5 AND 6 EFFECTIVE 4-19-19 

Due to forecasted milder weather, storage fields on test and anticipated lower demand for the holiday weekend, effective for the Gas Day of Friday, April 19, 2019, and until further notice, Tennessee Gas Pipeline, L.L.C.  (“Tennessee”) is implementing an OFO Daily Critical Day 1 for all of Zones L, 1, 2, 3, 4, 5 and 6 for all Balancing Parties (including LMS-PA, SA contracts acting as balancing parties, LMS-MA, and LMS-PL balancing parties).  This action is pursuant to Article X, Section 4 of the General Terms and Conditions of Tennessee’s FERC Gas Tariff.  

All delivery point operators in all of Zones L, 1, 2, 3, 4, 5 and 6 are required to keep actual daily takes out of the system equal to or greater than scheduled quantities regardless of their cumulative imbalance position.  All receipt point operators in all of Zones L, 1, 2, 3, 4, 5 and 6 are required to keep actual daily receipts into the system equal to or less than scheduled quantities regardless of their cumulative imbalance position.  In addition, it is essential that delivery point operators schedule gas at meters commensurate with takes within the affected areas.  All LMS-PA, SA contracts acting as balancing parties, LMS-MA and LMS-PL Balancing Parties are required to maintain an actual daily flow rate not exceeding 2% of scheduled quantities or 500 dths, whichever is greater for over-deliveries into the system and under-takes from the system. Customers will be assessed a rate of $5.00 plus the applicable Regional Daily Spot Price per dekatherm for that portion of physical quantities related to over-deliveries by receipt point operators and under-takes by delivery point operators which exceed this tolerance. 

THIS DAILY OFO CRITICAL DAY 1 WILL REMAIN IN EFFECT UNTIL FURTHER NOTICE. TENNESSEE WILL INFORM CUSTOMERS BY EBB WHEN THIS OFO WILL BE LIFTED.

Trailblazer Pipeline Company:

TRAILBLAZER MECHANICAL ISSUE–COMPRESSOR STATION 603–UPDATE #1

Trailblazer Pipeline Company LLC (“Trailblazer”) identified a mechanical issue with one of the two compressor units at Compressor Station 603. The unit is currently unavailable and is not expected to be available until late May, 2019. 

At this time, secondary firm quantities, as well as ITS/AOR are at risk of not being scheduled. Trailblazer will post updates as additional information becomes available.  For questions, please call your Account Director or Scheduling Representative.

Transcontinental Gas Pipe Line Company (Transco):

Transco recently provided notice of limited flexibility to manage imbalances and recommended shippers maintain a concurrent balance of receipts and deliveries. In order to ensure system integrity, maintain safe operations, manage imbalances, and handle within-the-day volatility, Transco is issuing an Imbalance Operational Flow Order (OFO).

Effective:        Friday, April 19, 2018

Ends:               Until Further Notice

Transactions:  Deliveries

Type:               Due to Shipper

OFO Area(s):  Zones 4, 5, and 6

Tolerance:        10% (or 1000 dth, whichever is greater)

This OFO is directed to shippers consistent with Section 52 of Transco’s FERC Gas Tariff General Terms and Conditions with a minimum of $50 per dth per day penalty.  This OFO will continue until further notice.  Buyers with imbalances greater than allowed tolerance will be subject to penalties specified in Section 52 of Transco’s FERC Gas Tariff General Terms and Conditions.

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The National Weather Service has published their first glimpse at the temperature forecast from the month of May.  It shows that the East and West coast areas could see above normal temperatures next month, while the majority of the midsection of the US is predicted to have normal to slightly below seasonal temperatures during the month of May.

That’s a wrap for this Thursday edition of GasNewsOnline.com.  We’ll return on Monday to provide an update on pipeline conditions and the latest energy news. 

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Happy Easter!