California natural gas for electricity generation rose nearly 250 MMcf/d in the past week in the wake of Southern California Edison Co. (SCE) taking its 2,300 MW San Onofre Nuclear Generating Station (SONGS) entirely offline. The shutdown came from a scheduled outage at Unit 2 and an unplanned outage of Unit 3 when a small leak occurred last Tuesday.
"With SONGs Unit 2 already down, constraints on several key [natural gas] pipelines delivering gas to the Southern California Gas Co. (SoCalGas) system could have significant implications for Southern California cash and forward markets, particularly if SONGS No. 3 stays offline for an extended period of time," said Bentek Energy's "California/Southwest Observer," which monitors gas supply/demand in the region.
"Near term, spreads to the SoCal [system] may widen as shippers must cover higher variable costs on alternative routes in order to meet incremental gas demand," Bentek said.
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