New expansion projects will enable cheap Marcellus supply to displace 0.4 Bcf/d of imports into the Northeast

Tuesday, July 17, 2012

BENTEK's Northeast Observer projects that capacity expansions by Tennessee and National Fuel will allow new production from the constrained Northeast Pennsylvania market to travel west to the Canadian border. This will lead to increased competition with Canadian supply from Dawn for New England markets. The incremental gas from Northeast Pennsylvania is poised to displace 0.4 Bcf/d that has traditionally been imported from Dawn.

The two expansions threatening Dawn imports are the Tennessee Northeast Supply Diversification project and the National Fuel Northern Access project. The production supplying both projects would likely be priced at TGP Zone 4, which has been discounted an average of $0.74 to Dawn prices in the cash market this summer due to the lack of pipeline capacity to serve growing production in Northeast Pennsylvania. In addition to the existing production receipts already filling pipelines in Northeast Pennsylvania, there is a substantial backlog of uncompleted wells awaiting new infrastructure which should keep regional production growing steadily for the next few years. BENTEK anticipates that Northeast Pennsylvania production will climb to 5.0 Bcf/d by the end of 2012, up 0.5 Bcf/d from the current level of 4.5 Bcf/d.

Key features of BENTEK's Northeast Observer:

• Natural gas storage, supply and demand trends including a two-week demand forecast

• Natural gas production, including a breakdown of wet and dry volumes in the Marcellus and Utica

• Northeast constraint points, pipeline flows, expansion updates and weekly volume changes by market

• Basis analysis for key Northeast markets including Appalachia, New York, Boston and New England

• Prices, pipeline variable costs and price spreads for key Northeast pipeline flow corridors


BENTEK's Northeast Production Monitor provides timely coverage of Northeast natural gas rig counts and drilling activity, including five-year production forecasts for each region and basin.

BENTEK's Northeast Market Call offers a comprehensive and forward-looking view of Northeast basis through a sector-by-sector analysis of the underlying factors that drive the regional market, including production, storage and demand.

To learn more, please contact your BENTEK sales representative or call BENTEK Sales at 1-888-251-1264.