Changing dynamics in the northeastern and western US stand to have lasting implications on natural gas markets in the latter region as pipeline expansions and growing Marcellus Shale production alter traditional flow patterns and link the two markets in a way not previously seen, Platts unit Bentek Energy said in a report released Thursday.
Firm contracts secured before the pipeline began service kept the pipeline highly utilized in 2011, and Bentek expects 2012 to be no different despite competition from Canadian and other supply sources.
Although Ruby only increased westbound capacity, the upward pressure at Opal has tightened its spread to all its downstream markets, including the Northeast.
And while growing shale supplies will continue to displace Rockies gas in the Northeast, Bentek said it expects Opal prices to remain strong throughout 2012 as storage capacity in the West and a return to normal demand would be sufficient to absorb the gas.
Over the long term, however, Bentek said it expected Opal to face downward pressure as capacity and demand constraints, combined with Rockies production growth, take their toll.
To access a complete copy of this report, please visit www.platts.com