Storage inventories in the Northeast continue to rise as we approach the week 46 turn around, with roughly six weeks left in this injection season. Despite relatively high production and lower shoulder season demand, TCO appears to be continuing to throttle injections as inventories approach maximum capacity, reporting a 5.2 Bcf injection for the week ending September 23, roughly 1 Bcf below the five-year average injection. Total inventory at TCO reached 236.1 Bcf this week, realizing 96.4% utilization. While TCO’s stated storage capacity is 245 Bcf, historically the max observed inventory hit 261 Bcf, indicating they may have some room to work with. Dominion injections remained flat from last week, injecting another 7 Bcf for the week ended September 22. This pushed DTI inventory to 269 Bcf, or 93% of the systems 290 Bcf working capacity. The latest injection on Dominion aligns with both last year’s and the five-year average injection for the same reporting week, though inventories are still running a 7.8 Bcf surplus to the five-year average.
Despite total Midwest demand being up 0.3 Bcf/d month-to-date from the same time period last year, net inflows to the Midwest have dropped significantly from last September. Month-to-date, net flows are down 1.7 Bcf/d. The drop in inflows from the Southeast has driven the majority of this, which has only averaged 370 MMcf/d this month, a drop of 1.8 Bcf/d from last September. This has been accompanied by a decline of almost 0.6 Bcf/d in inflows from the Midcon Producing. But there have been some noteworthy offsets -- 0.6 Bcf/d decline in Midwest exports to East Canada and an increase of 0.2 Bcf/d in supply coming from the Rockies. But the Southeast has been the pivotal shift to net flows. A discounted Chicago basis (averaging negative seven cents/MMBtu MTD) has been a big deterrent for less SE supply making it to the Midwest.
Earlier this month, TETCO requested permission from FERC to place into service certain facilities associated with their Gulf Markets Expansion. This request was granted on September 21. The request and subsequent grant of permission pertains to all facilities associated with Phase I of the expansion, with the exception of the Mt. Pleasant Compressor Station in Giles County, Tennessee. More recently, TETCO requested permission to place the final piece of Phase I, Mt. Pleasant, into service on September 26. The early in-service for the 400 MMcf/d Phase I of Gulf Markets comes nearly one and a half months prior to the originally anticipated in-service date of November 1. The 400 MMcf/d Phase I involved modifications to the Wheelersburg, Owingsville, Opelousas and Egypt Compressor Stations aimed at moving gas north-to-south from TETCO Zone M2 to Zone WLA. Phase II will add an additional 250 MMcf/d of south-to-north capacity from Zone STX to Zone WLA, and should come online in August 2017.