Natural Gas Daily
Lateral repairs pressure CenterPoint spot prices

Wednesday, September 02, 2009

Texas Gas Transmission’s Tuesday shutdown of its Fayetteville and Greenville laterals for repairs has forced Fayetteville Shale producers to shut in wells and exposed a region already contending with constrained takeaway and anemic demand to a gas glut and a possible price crash.

In late August, the Boardwalk Pipelines affiliate confirmed that the repairs to structural anomalies would begin this week and last as long as three months. Texas Gas had to undertake similar anomaly repairs on three of its other lines earlier this summer.

"The other pipes that can take gas out of the Fayetteville Shale are Ozark Gas Transmission, Centerpoint, [Natural Gas Pipeline Co. of America] and MRT," said Bentek Energy analyst Justin Carlson. "All of those are pretty much full."

As of August 31, two days before the repairs were scheduled to begin, production data indicated that Fayetteville volumes had not dropped, nor had there been a decline in the number of well, Carlson said. "They’re going to produce the last drop until the last minute," he added.

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