Exports to Mexico from the Southwest have remained strong into the shoulder season, falling off only marginally from its record peaks set this summer. Exports from the region have averaged roughly 700 MMcf/d over the first week of October, down from its monthly peak set in September at 743 MMcf/d. Southwest flows to Mexico peaked at 843 MMcf/d in early September, aligning with a peak in regional gas demand as well due to high cooling demand load. Bentek expects flows from the Southwest to its southern neighbor to fall slightly throughout the fall, averaging 662 MMcf/d in October and then edging lower to 637 MMcf/d in November. Southwest exports to Mexico since April have grown 146 MMcf/d compared to the same period last year, with 77% of the growth occurring on the Sierrita lateral that began operations six months ago. Total exports to Mexico, including flows from Texas, have grown 0.7 Bcf/d season-to-date above the summer of 2014 to 2.85 Bcf/d.
On October 5, 2015, Suncor commenced an unsolicited offer to Canadian Oil Sands Limited shareholders to acquire all of the outstanding shares of COS for total consideration of approximately $4.3 Billion, according to a Suncor press release. While the US oil market is facing declining rig counts and an uncertain production outlook, Suncor is looking to purchase assets in a region that has seen steady growth despite the recent drop in oil prices. The long-term nature of projects in West Canada’s oil sands region has made the region less susceptible to swings in oil prices, and increased production in the oil sands region is giving producers of natural gas a much needed outlet for gas that otherwise would have to price its way into US markets. This could prove to be an important, exclusive market for Canadian producers in the future.
The official end to the summer injection season is just three weeks away, but facilities could certainly still inject through the first half of November. Columbia Gas issued a notice Friday -- the day after the Northeast region hit an all-time production high of 20.95 Bcf/d -- indicating that its storage facilities are approaching maximum capacity. TCO's system as a whole hit 230 Bcf for the storage week ending Friday, 27.6 Bcf above the same time last year and 6 Bcf below the five-year average. The deficit to the five-year average inventory has been closed aggressively since the beginning of the summer, starting at 23.5 Bcf back. The picture is similar on Dominion's system, which reached 270 Bcf for the week ending last Thursday, up 7 Bcf on the year and just 200 MMcf below the five-year average. DTI injections have been robust for much of the summer, shrinking the gap from April of 33 Bcf behind and could likely push into record territory if injections continue in November.