The GTN, Kingsgate-Stanfield, Ore., spread could close early next week as the Pacific Northwest receives more gas from West Canada, replacing some supply from the Rockies.
TC Energy’s Gas Transmission Northwest will increase capacity through Kingsgate, the pipeline’s entry point for gas flowing into the Pacific Northwest from West Canada, to 2.25 Bcf/d starting July 10, according to a notice posted to the pipeline’s website July 9.
Flow Past Kingsgate capacity was previously capped at 2.05 Bcf/d, representing a potential increase of around 200 MMcf/d for Canada-to-Pacific Northwest flows. Historically, shippers have been quick to respond to increases in operational capacity at this point. Full operational capacity for Flow Past Kingsgate is around 2.75 Bcf/d.
During the most recent phase of GTN pipeline maintenance work, flows from the Rockies ramped up to close the gap in regional inflows. S&P Global Platts Analytics data shows that Rockies-to-Pacific Northwest flows doubled over the last seven days to 825 MMcf on July 9 from around 410 MMcf on July 3.
Cash GTN, Kingsgate, gained 5 cents to reach a seven-day high of $3.10/MMBtu in July 9 trading, according to preliminary settlement data. Stanfield, Ore., also saw some buoyancy, gaining 10 cents to trade at $3.77/MMBtu.
The operational capacity limits have blown out GTN, Kingsgate’s spread to Stanfield, Ore., to a nearly 70-cent discount. Higher Flow Past Kingsgate capacity should help reduce that spread, with the cash price for GTN, Kingsgate, likely to gain some ground relative to other regional pricing locations in the first half of next week.
While increased Canada-to-Pacific Northwest flow capacity is one driver of a likely drop in Rockies inflows, new pipeline capacity restrictions on Ruby Pipeline will likely serve as another driver.
Kinder Morgan’s Ruby Pipeline, which moves gas from the Rockies to the Oregon-California border, declared a force majeure at Segment 20 Roberson Creek Compressor Station starting gas day July 9, effective until further notice. Segment 20 is in Wyoming, between the Topaz Ridge and Gemstone Canyon points.
The force majeure is set to limit operational capacity on Ruby Pipeline’s Segment 20 from around 1.5 Bcf/d to around 550 MMcf/d, according to a critical notice.
Platts Analytics data shows that the restrictions may have already started to take effect, with deliveries from Ruby Pipeline to PG&E at Malin, Ore., down 70 MMcf, or 13%, on July 9 to 485 MMcf. Preliminary settlement data for July 9 shows that cash PG&E, Malin, traded 14.50 cents higher at $3.945/MMBtu, which was a three-month high for the location.
Source: Platts