Gas Infrastructure and Deliverability in New England · Gas Infrastructure and Deliverability in...
Transcript of Gas Infrastructure and Deliverability in New England · Gas Infrastructure and Deliverability in...
Understanding Our
Energy Distribution Systems:
Gas Infrastructure and
Deliverability in New England
Richard Levitan, [email protected]
March 5, 2014
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Agenda
Price Discovery During the Polar Vortex
New England’s P/L Infrastructure
• Marcellus shale E&P impact on supply / deliverability
• Decline in gas portfolio diversity -- pipeline economic
obsolescence
• Reduced LNG Imports
• Potential infrastructure expansion efforts
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Next Day Strip Prices, January 2014
TZ6 (non-NY) is VA/MB border to Linden, NJ
TZ5 is GA/SC to VA/MD border0
25
50
75
100
125
150
1/21/31/41/51/61/71/81/9
1/10
1/11
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1/24
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1/29
1/30
1/31
Pri
ce (
$/M
MB
tu)
Transco-Z6 (NY)
0
25
50
75
100
125
150
1/21/31/41/51/61/71/81/9
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Pri
ce (
$/M
MB
tu)
Transco-Z6 (non-NY)
(High, Low, Weighted Average)
Source: ICE
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Next Day Strip Prices, January 2014
(High, Low, Weighted Average)
0
25
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75
100
125
150
1/21/31/41/51/61/71/81/9
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Pri
ce (
$/M
MB
tu)
Chicago Citygates
0
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50
75
100
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150
1/21/31/41/51/61/71/81/9
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Pri
ce (
$/M
MB
tu)
Dominion-South
Source: ICE
0
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150
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Pri
ce (
$/M
MB
tu)
Algonquin Citygates
0
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150
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Pri
ce (
$/M
MB
tu)
TETCO-M3
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Chokepoints Across the Supply Chain into the NYFS
January 6-7, January 21-23, 2014
Source: Pipeline EBB Critical Notice postings
Force majeure, 1/7
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Pre-Shale and Post-Shale Gas Flow Patterns
Pre-Shale Flow Patterns Post-Shale Flow Patterns
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Wet and dry shale gas production
Major Dry Gas
Production Area
Major Wet Gas
Production Area
Sources: EIA, Pennsylvania State University Marcellus Center, Dominion
Resources, Pennsylvania Department of Conservation and Natural Resources
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0
2
4
6
8
10
12
Oct-
08
Jan
-09
Ap
r-0
9
Jul-0
9
Oct-
09
Jan
-10
Ap
r-1
0
Jul-1
0
Oct-
10
Jan
-11
Ap
r-1
1
Jul-1
1
Oct-
11
Jan
-12
Ap
r-1
2
Jul-1
2
Oct-
12
Jan
-13
Ap
r-1
3
Jul-1
3
Oct-
13
Ma
rcell
us
Pro
du
cti
on
(B
cf/
d)
Radical Change in Traditional Flows
Shale gas fundamentally altering traditional flows
• Long haul transportation from WCSB obsolete
• Marcellus gas supplanting gas from GoM and Canada
• Declining Sable Island production, uncertainty around
Deep Panuke
• Reversal of flow through
New York / Ontario
• LNG imports limited to
contract quantities,
periodic arbitrage
◦ Flexible cargoes to
EU or Asia
Source: Bentek Energy
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Interstate Pipelines Operating in New England
Algonquin
Granite State
Iroquois
M&N
PNGTS
M&N/PNGTS Joint Facilities
Tennessee
Interstate-Served Generator
LNG-Served Generator
LDC-Served Generator
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Interstate Pipelines Operating in New York
Algonquin
CNYOG
Columbia
Dominion
Empire
Iroquois
Millennium
NFG
Tennessee
Texas Eastern
Transco
Bluestone Gathering
Laser Gathering
Interstate-Served Generator
Intrastate-Served Generator
LDC-Served Generator
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LNG Import Terminals in New England
Algonquin
M&N
Tennessee
LNG-Served Generator
LNG Import Terminal
National GridService Territory
Boston
Mystic 8&9
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Northeast LNG Imports
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013
LN
G Im
po
rts
(B
cf)
Distrigas Canaport
Source: DOE Office of Fossil Energy, NEB
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Decline in East-End Supplies
0
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10
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30
35
40
45
50
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100
150
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300
350
400
2007 2008 2009 2010 2011 2012 2013
LN
G Im
po
rts (
Bcf)
Dis
trig
as S
en
do
ut
to A
lgo
nq
uin
(M
Dth
/d)
Distrigas LNG Imports
Distrigas Sendout to Algonquin
Algonquin Receipts from M&N
Source: DOE Office of Fossil Energy, Spectra Energy
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Constraints on West-End Supplies
0
200
400
600
800
1,000
1,200
1,400
1,600
Jul-09
Oct-
09
Jan-1
0
Apr-
10
Jul-10
Oct-
10
Jan-1
1
Apr-
11
Jul-11
Oct-
11
Jan-1
2
Apr-
12
Jul-12
Oct-
12
Jan-1
3
Apr-
13
Jul-13
Oct-
13
Jan-1
4
Natu
ral
Ga
s V
olu
me
(M
Dth
/d)
Capacity Throughput
Source: Spectra Energy
Algonquin Southeast Compressor Station (NY/CT Border)
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LNG Facilities in New England
Algonquin
Granite State
Iroquois
M&N
PNGTS
M&N/PNGTS Joint Facilities
Tennessee
LNG Import Terminal
LNG Satellite Tank
Augusta
Portland
Boston
Springfield
Hartford
New Haven
Providence
Concord
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LDCs Serving New England Generators
Algonquin
Granite State
Iroquois
M&N
PNGTS
M&N/PNGTS Joint Facilities
Tennessee
Bangor Gas
Berkshire Gas
Columbia Gas of MA
Connecticut Natural Gas
Maine Natural Gas
National Grid (Boston Gas)
National Grid (Colonial Gas)
National Grid (Narragansett)
Southern Connecticut Gas
Yankee Gas
LDC-Served Generator
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M&N Pipeline Facilities
Maine
Algonquin
Granite State
M&N
PNGTS
M&N/PNGTS Joint Facilities
Tennessee
Compressor Station
Interstate-Served Generator
New Hampshire
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Tennessee Pipeline Facilities in New England
Algonquin
Granite State
Iroquois
M&N
M&N / PNGTS Joint Facilities
Tennessee
Compressor Station
Interstate-Served Generator
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Concluding Thoughts
Loss of New England’s P/L portfolio diversity heightens economic
and operational risks
High basis and volatile gas prices likely here to stay until pipeline
enhancements alleviate congestion along traditional pathways into
the region
Existing ISO wholesale market design does not induce genco
commitments for firm transportation
Bulk power security during the winter is derived largely from oil
• Many oil generation plants at the local level are at-risk for retirement
• Combined cycle, gas turbine, and steam turbine generators on oil
cannot sustain the provision of ancillary services