US production dropped 0.3 Bcf/d to 72.4 Bcf/d Thursday with declines concentrated in the Northeast and Southwest. Despite a 0.3 Bcf/d upward revision, Northeast production is down for the third day in a row, dropping 0.3 Bcf/d to 24.4 Bcf/d today. It is important to note that, while production in the region has declined slightly in the last several days, volumes averaged 24.7 Bcf/d since the beginning of the week and are in line with yearly highs. Day-on-day, the bulk of Appalachia declines were realized in OH and PA Northeast dry. Southwest production dipped 0.1 Bcf/d to 4.3 Bcf/d today and was driven almost exclusively by the San Juan basin. Sample production in the San Juan dropped 0.1 Bcf/d with declines on El Paso pipeline and more specifically at the Chaco and Blanco plants. Total demand was flat day-on-day at 74.6 Bcf/d, with offsetting moves between power burn and exports to Mexico.
Ongoing maintenance at the AB/BC border has been limiting Canadian imports at Kingsgate to 1.93 Bcf/d since August 10, down 340 MMcf/d from the prior two-week average. The restriction will dip slightly for August 18 and 19, cutting another 50-75 MMcf/d of capacity at the border. NGTL’s current outage schedule shows that the maintenance will lift on August 20, allowing flows at Kingsgate to jump back above 2.2 Bcf/d. Partially offsetting the current restrictions at Kingsgate, imports at Sumas have averaged 1.14 Bcf/d since August 11, 220 MMcf/d above the previous two-week average as a longer-term maintenance was impacting flows upstream of Sumas. Despite the boost in imports from the AB/BC maintenance rolling off, the jump in supply will be short-lived as another maintenance impacting Sumas is scheduled to start on August 24. That maintenance may cause Sumas to flow as low as 0.8 Bcf/d through the end of August.
Net flows from the Northeast to the Southeast hit a monthly high of over 2.8 Bcf/d mainly due to the completion of a maintenance on Tennessee Station 204, which originally limited flows through the highly utilized Station 204 to Station 209 backhaul segment by over 400 MMcf/d. Since the start of the maintenance on July 31, Tennessee Zone 4 Sta-219 cash basis has averaged $0.96 cents back, which is $0.20 weaker than the July average and nearly $0.40 weaker than current basis. Tennessee Zone 4 Sta-219 outright price has also hit a monthly high of $2.25, a level that hasn’t been reached since July 24, before the maintenance began. There is still a maintenance at Station 209 on Tennessee that will be completed this Friday. But the impacts are minimal as flows are only limited by 53 MMcf/d. TETCO has a current maintenance at the Tompkinsville compressor station that is limiting flows heading south through Berne by over 300 MMcf/d and is scheduled to be completed by August 26. Once finished, flows to the southeast are expected to increase and pricing impacts on TETCO M2 should be similar to the upward pressure seen at Tennessee Zone 4 Sta-219.