- 35947, SI/NC, XTO, Bronson 31X-14A, Temple, no production data,
- 34971, 1,533, CLR, Rader 7-24H1, Avoca, t7/19; cum 48K over 46 days;
- 33782, SI/NC, Crescent Point Energy, CPEUSC Lloyd 7-27-34-157N-100W TFH, Marmon, no production data;
- 33593, 250, BR, Anderson Ranch 1D TFH, Camel Butte, t7/19; cum 8K over 51 days;
RBN Energy: are northeast natural gas takeaway constraints back?
The Northeast natural gas market was supposed to have turned a new leaf. After years of pipeline takeaway constraints and constraint-driven prices, the region as of late 2018 had ample, even excess, takeaway capacity on its hands. Regional prices strengthened on both an absolute basis and relative to downstream markets, and Marcellus/Utica producers had room to grow. But bearish fundamentals have rattled the Northeast — and U.S. — market in recent months. In-region demand has lagged, even as production has set new highs. Since August, capacity reductions on Texas Eastern Transmission, a key Northeast takeaway route, have limited outflows. And, to top it off, Dominion’s Cove Point LNG went offline last month for an annual three-week-long maintenance, taking another 700 MMcf/d of demand out of the market for a time — it has since come back online, as of this past Monday. But regional prices in late September and early October were pummeled in the process, raising the question: are the Northeast’s takeaway constraints back? Today, we analyze the impacts of shoulder-season dynamics on regional storage and takeaway capacity utilization.
As weak as gas prices have been lately at the national benchmark Henry Hub, Northeast prices have been even weaker. Prices at the Dominion South hub, the benchmark for Appalachian supply, were trading 20 to 40 cents per MMBtu below Henry for most of the first seven months of 2019. But in August, that discount — or basis — plunged to minus 80 cents, and averaged about $1 in the first couple weeks of October. That’s stronger than where basis stood during the worst of the pipeline constraints in prior years, but still weaker than last year at this time, even as the Henry cash price is trading at multi-year lows.