Natural Gas Daily
New pipes may help stave off Rockies price crash

Friday, September 18, 2009

September 18, 2009

New pipes may help stave off Rockies price crash

With new takeaway capacity in place from the Rockies to higher-demand regions, some analysts believe the shift in market dynamics may be enough to stave off the late-year price plunge that historically has plagued the region. But some market participants think the current nationwide gas glut could lead to a Rockies price crash when the storage injection season ends.

BENTEK Energy analyst Sam Duran thinks that despite the current softness in demand due to the economy, there are more places for Rockies gas to go than ever before, which should stave off a price crash before winter demand picks up.

“REX has 1.8 Bcf/d of capacity coming out of the Rockies. The 30-day average has around 1.64 Bcf/d so there is some space on REX,” Duran said, adding that there is still some storage capacity in the region as well.

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