Regional Natural Gas Constraints: Challenges & …Regional Natural Gas Constraints: Challenges &...
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Regional Natural Gas Constraints:Challenges & Opportunities
Presentation to:
New Hampshire Business & IndustryAssociation Annual Energy Seminar
Thomas KileyNortheast Gas Association
December 10, 2014Manchester, NH
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Continued on NGA web site…
http://www.northeastgas.org/about-nga/antitrust-guidelines
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About NGA
Non-profit trade association
Local gas utilities (LDCs) serving New England, New York, and New Jersey
Several interstate pipeline companies
LNG importers (Distrigas, Repsol) and LNG trucking companies
Over 200 “associate member” companies, from industry suppliers and contractors to electric grid operators
www.northeastgas.org
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Points
Marcellus production continues to be robust and low-priced
Pipelines entering NE from the “west” are essentially full, leaving NE market subject to high spot prices, notably in the winter
New gas transmission infrastructure into New England not available until late 2016 at the earliest
New England’s (and New Hampshire’s) natural gas utilities are signing up for capacity on proposed pipeline projects, while the power sector is not – a persistent dilemma for the regional power market
Major market impact of spot prices: NE wholesale power market and electric customers
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Changing Supply Dynamic
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Source: U.S. EIA, 7-14
Marcellus Shale Production
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Jan-
07
Jun-
07
Nov
-07
Apr-
08
Sep-
08
Feb-
09
Jul-0
9
Dec
-09
May
-10
Oct
-10
Mar
-11
Aug-
11
Jan-
12
Jun-
12
Nov
-12
Apr-
13
Sep-
13
Feb-
14
Jul-1
4
Marcellus Natural Gas Production, 2007-14
Source: U.S. EIA, 11-14
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Source: National Energy Board of Canada, 1-14
Changing Pipeline Flows
Increased flows from MarcellusDecreased flows from Gulf Coast & Canada
Canadian Natural Gas Exports to U.S. Regions, 2009-2013
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LNG
LNG essential to meeting peak day demand in New England
Important part of gas utilities’ supply portfolios
3 LNG satellite tanks in NH
But decreasing imports – drawn to higher cost markets
020406080
100120140160180200
Source: U.S. Dept. of Energy/Office of Fossil Energy, 2-14
LNG Imports by New England-Based Terminals, (Bcf/yr),
2003-13
Distrigas NE Gateway Neptune
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Delivery System
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Copyright: Northeast Gas AssociationPrepared by: Coler & Colantonio, Inc.February 2012
M&NEPNGTS
Iroquois
Tennessee Algonquin
5 InterstatePipelinesWithin New England
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Northern New England
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Market Growth
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Source: U.S. EIA, 10-14
Home Heating Sector: Growing Share
Percent of Homes, MainHeating Fuels, Northeast
2005-2013
Natural Gas
Fuel Oil & Kerosene
Electricity
LPG & Other
2005 2013
Chart: U.S. EIA, 9-14
0
500000
1000000
1500000
2000000
2500000
1990 2000 2005 2012
Growth in Natural Gas Residential Customers,
New England, 1990 - 2012
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Demand: Growth Shaped by Price Advantage
0
500
1,000
1,500
2,000
2,500
Source: U.S. EIA, Nov. 12, 2014. Natural gas data is for Northeast states of CT, ME, MA, NH, NJ, NY, PA, RI, VT. Heating oil is U.S. average.
Average Consumer Expenditures for Heating Fuels, $, 2008-2014
Natural Gas
Heating Oil
(Forecast)
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Proposed Power Plants by Fuel, Northeast
Source: ISO-NE
Natural Gas, 55
Other, 1
Wind, 44
GENERATOR PROPOSALS IN THEISO NEW ENGLAND QUEUE
Percentage, 2014
NEW YORK ISO SYSTEM, 2014Proposed Power Projects by Fuel Type
Megawatts
Source: NY ISO
NEW JERSEY, 2013Queued Capacity by Fuel Type,
Percentage (In-State Only)Approx. 9,351 MW
Source: PJM
55% 70%
74%
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“Portable” Natural Gas
• Growth in off-system deliveries of CNG, via “virtual pipeline”.
• Clean Energy opened CNG station in July in Pembroke. NG Advantage’s customers include a paper mill and a medical center.
• Liberty Utilities and AVSG developing station in Concord.
• Companies in the market include:
• Global CNG• iNatGas (AVSG)• NG Advantage• Xpress Natural Gas.
Clean Energy’s compressed natural gas fueling station, Pembroke, NH, which opened in July 2014.
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Delivery Constraints
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Capacity Constraints:Essentially, a Traffic Jam
Source: U.S. EIA, 1-25-13
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Price Variations at DifferentMarket Hubs: annual
0
1
2
3
4
5
6
7
8
9
10
AlgonquinCitygates
Transco Zone 6 NY ColumbiaAppalachia
Henry Hub
Source: U.S. FERC, 10-9-14. 2014 data is "year to date as of early Oct."
Average Annual Day-Ahead Prices ($/MMBtu)
2011 2012 2013 2014*
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Price Variations at DifferentMarket Hubs: winter
0
2
4
6
8
10
12
14
16
18
AlgonquinCitygates
Transco Zone 6NY
ColumbiaAppalachia
Henry Hub
Source: U.S. FERC, 10-9-14
Average Winter Day-Ahead Prices,Select Delivery Hubs ($/MMBtu)
2011/12 2012/13 2013/14
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Futures Prices for This Coming Winter, Gas & Power, U.S. Markets
Chart: U.S. Federal Energy Regulatory Commission (FERC), 10-14
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Copyright: Northeast Gas AssociationPrepared by: Coler & Colantonio, Inc.February 2012
Electric Bill ForecastsThis Winter
NY PSC, 10-23-14: Average resid. electric customer to pay 20% less this winter CT:
25 - 57% higher this winter
MA: 29-37% higher this winter
NH: 29 - 50% higher this winter
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Gas TransmissionProposals
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Interstate Transmission Projects In-Service in 2014:Outside New England
Tennessee’s “Rose Lake” Spectra’s “TEAM 2014” National Fuel Gas’s “Mercer Expansion” …and others
Chart: U.S. EIA, 11-14
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Prepared by NGA, based on publicly available information. Project locations approximate. As of 11-14.
VERMONT
Proposed Pipeline Projects
Spectra, “AIM”National Fuel /
Empire, “Tuscarora
Lateral”
Williams, “Rockaway Lateral /
Northeast Connector”
Williams & Cabot,
“Constitution Pipeline”
Tennessee, “Northeast
Energy Direct”
Iroquois, “Wright
Interconnect”
Iroquois, “Eastern Long
Island”Columbia, “East Side Expansion
Project”
PNGTS, “C2C”
Spectra, “Atlantic Bridge”
Tennessee, “ConnecticutExpansion”
Iroquois, “South to North”
National Fuel / Empire, “Northern
Access 2015 & 2016”
Dominion, “New Market
Project”
Tennessee, “Niagara
Expansion”
PennEastProject
Williams/Transco, “Diamond East”
Spectra/NU, “Access
Northeast”
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> A 125-mile, 30-inch pipeline connecting Williams’ Midstream System in Susquehanna County, PA to Iroquois Gas Transmission and Tennessee Gas Pipeline in Schoharie County, NY
> Capacity: 650 MDth/d> Shipper: Cabot (500 MDthd); Southwestern
Energy (150 MDthd)> Owned (41%) and operated by WPZ; Cabot Oil
and Gas owns 25%, Piedmont Constitution Pipeline Company owns 24% and WGL Midstream owns 10%
> Target in-service date: Late 2015 to 2016> Approved by FERC last week
Constitution Pipeline /Wright Interconnect Project
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Algonquin Incremental Market (AIM) Project: Spectra Energy
Project Scope: Providing 342 MMcf/d of additional
capacity to move Marcellus production to Algonquin City Gates
Customers:UIL Holdings Northeast Utilities National Grid NiSource City of Middleborough, MA City of Norwich, CT
Project Status: FERC pre-filing commenced June 2013 Filed FERC application February 2014 Receive FERC certificate 1Q15 Commence construction 2Q15 In-service 2H16
Regional Supply
Map and info: Spectra Energy
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Connecticut Expansion Project:Kinder Morgan / TGP
Project Scope: Providing 72 MMcf/d of additional
capacity to meet utility demand
Customers:UIL Holdings (CT Natural Gas &
Southern CT Gas)Northeast Utilities (Yankee Gas)
Project Status: Receipts from Wright, NY FERC Certificate Application filed
on July 31, 2014 Docket No. CP14-529-000 Proposed Construction Start Date
– November 2015 Proposed In-Service Date
– November 2016Source: Kinder Morgan
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Atlantic Bridge Project:Spectra Energy
Map and info: Spectra Energy
Location: New England and Maritime Provinces
Capacity: 100,000 to in excess of 600,000 dekatherms of natural gas per day, depending upon market commitments
Anchor Shipper: Unitil
Initial Project In-Service Date: November 2017; later in-service dates will be considered
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Northeast Energy Direct Project:Kinder Morgan / TGP
Source: Kinder Morgan
Project Scope: Scalable up to 2.2 Bcf/d of
additional capacity to meet NE and Atlantic Canada market demand
Anchor Shipper Customers: 9 LDCs, with capacity of 500,000
Dth/d, including: The Berkshire Gas Company Columbia Gas of Massachusetts Connecticut Natural Gas Corp. Liberty Utilities (EnergyNorth
Natural Gas) CorporationNational Grid Southern Connecticut Gas Corp. City of Westfield Gas & Electric
Light 2 othersProject Status: Project Development and
Commercial Negotiations – OngoingOutreach Meetings at state, local
and town level - Ongoing
Project Status (cont’d): Route Selection and Permit Preparation – Ongoing Planned FERC filing – September 2015 Proposed Construction Start Date – January 2017 Proposed In-Service Date – November 2018
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Access Northeast Project:Spectra Energy & NU
Map and info: Spectra Energy
Project Scope:“Electric power solution” could begin service as early as 2018.
The natural gas supply increase will be available in increments.
Expanding the Spectra pipelines, which already directly connect to ~ 60% of New England’s natural gas-fired electric generation, will provide natural gas to power plants critical for grid stability on the coldest and warmest days.
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PNGTS’s “C2C Project”
Map and info: Portland Natural Gas Transmission
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Iroquois’ “SoNo Project”
Map and info: Iroquois Gas Transmission
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New England Governors’ Energy Infrastructure Initiative / NESCOE
A year ago, the New England Governors announced a joint energy initiative designed to accelerate regional cooperation on expanding renewable energy and energy infrastructure in New England.
NESCOE at NE Council event in Manchester in June: “Recent pipeline projects have had zero electric power generators subscribe for firm natural gas transportation.”
Next steps???
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Summary
• New England remains highest spot price point for natural gas – new infrastructure needed, planned, in process.
• Customer bill impacts felt last winter – and challenging price outlook for coming years, notably on the electric side
• Utilities continue to see growth on systems - but new infrastructure key to assuring adequate capacity for future growth. New England (and NH) natural gas utilities are participating in new pipeline proposals.
• New Hampshire and New England well-positioned to take advantage of U.S. domestic resource base – if infrastructure can be added to access supplies.
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75 Second Avenue, Suite 510Needham, MA 02494-2859
Tel. 781-455-6800
20 Waterview Boulevard, 4th FloorParsippany, NJ 07054
Tel. 973-265-1900
www.northeastgas.org
30.