Natural Gas Prices By New Pipelines From Rockies: Energy Markets

Thursday, December 23, 2010

U.S. natural gas is poised to extend its biggest annual decline since 2004 as new pipelines from the Rocky Mountains deepen an unprecedented glut of the fuel.

The Ruby pipeline will help boost gas production in Wyoming, Utah, and Colorado by 750 million cubic feet a day by 2015, according to Bentek Energy LLC, an Evergreen, Colorado- based energy market-research company. The three states currently produce 7 billion cubic feet a day.

“By the time Ruby gets in, Opal will get a little bit stronger, and Henry Hub prices will be lower, so there will be general basis tightening from both affects,” said Jack Weixel, director of client services at Evergreen, Colorado-based Bentek.

The Ruby line, which starts from Opal Hub and ends at Malin, Oregon, will connect gas from the Rockies to PG&E Corp., California’s biggest utility owner, through the existing Oregon- California interstate pipelines.

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