New England: A Demand Island in a Sea of Supply


Algonquin cash basis is expected to average $0.50 above the three-year average in winter 2012/13.

New England’s two most actively traded natural gas markets are Algonquin Citygate and Tennessee Zone 6 200 Line, both serving most of the same regional U.S. markets. While rapidly growing Marcellus receipts on Tennessee and proposed expansions have put downward pressure on Tennessee Zone 6 winter basis, Algonquin basis has remained prone to high price spikes due to pipeline constraints, dwindling LNG imports, the delay of the Deep Panuke gas production project offshore Nova Scotia and rising demand from regional gas-fired power generation.

New England: A Demand Island in a Sea of Supply Market Alert analyzes the market conditions that are contributing to surging New England gas prices and provides seven forecast scenarios for Algonquin Citygate winter cash basis, including three base cases, two cold weather cases and two warm weather cases.

This Market Alert is based on data from Northeast Market Call, which provides the crucial insight needed to make forward-looking decisions on the Northeast natural gas market.