The second day of natural gas bidweek trading Tuesday saw baseload prices maintain a weakening trend ahead of the autumn season, according to NGI’s Bidweek Alert (BWA).
NOVA Aeco C Bidweek Prices
While overall deal volumes dropped off from Monday levels, some hubs saw an uptick in activity day/day. One such hub was NOVA/AECO C in Canada, which led all locations for volume at 100 total deals, up from 62 on Monday.
NOVA/AECO C fixed price deals averaged at C65.0 cents/GJ on day 2 of September Bidweek. The hub averaged at C70.0 cents on Monday and 88.0 cents for August, BWA data show. Cash prices in Alberta have sunk to five-year lows amid excess Canadian gas supply that has forced producers to curtail output.
Trading for West Texas hubs, meanwhile, stalled after flipping negative on Monday. Waha saw no deals. El Paso Permian traded at an average negative $1.200, slightly firmer from an average negative $1.225 on Monday.
The Permian Basin could get relief from negative prices with the ramp up of the Matterhorn Express Pipeline starting in September or October.
In basis trade on Tuesday, the newly added index for Transco Zone 5 St. 165 traded between minus-59.0 cents and 57.5 cents, averaging at minus-58.3 cents for September. That’s up from an average minus-63.5 cents on day 1 of September Bidweek trading. The hub, carved out of Transco Zone 5 South index, reflects pricing for deliveries into Transcontinental Gas Pipe Line Co. LLC (Transco) Station 165 in Virginia from the Mountain Valley Pipeline LLC (MVP).
The 2 Bcf/d MVP started service in June. The pipeline’s deliveries to Transco peaked at 1.29 Bcf/d on Aug. 20 after the end of pigging work on upstream segments, Criterion Research Inc.’s James Bevan, vice president of Research, said on the online energy platform Enelyst. MVP delivered about 1.2 Bcf/d to Station 165 on Friday (Aug. 23), he said.
That baseload price level for Transco Zone 5 St. 165 landed closer to Appalachia prices than some its counterparts in the Southeast. By comparison, Transco Zone 5 South averaged at 29.0 cents on Tuesday. In Appalachia, Texas Eastern M-2, 30 Receipt averaged at minus-65.3 cents.
In the Northeast, Iroquois Zone 2 averaged at minus 36.8 cents relative to Henry Hub. That compares with minus 25.0 cents for August.
Related markets offered mixed support to bidweek trading on Tuesday. The September Nymex futures contract fell 5.2 cents to settle at $1.904. Next-day cash prices for Henry Hub shed 2.0 cents on Tuesday to $1.910.
