California Natural Gas Prices Highest in Months Amid Pipeline Constraints, Maintenance and Rising Cooling Demand

Intelligence on natural gas market fundamentals presented by NGI’s data and price analysts

• Late last week, El Paso Natural Gas Pipeline Co. LLC issued a force majeure at the Cornudas A compressor station, which is included in NGI’s El Paso S. Mainline/N. Baja index. Prices there briefly fell 7.5 cents on Friday before climbing $1.280 to $4.005/MMBtu on Monday.
• Notably, El Paso-Waha Pool jumped 69.0 cents despite the flow restrictions, likely because of the first heat wave of the summer increasing cooling demand. California is also in the early half of its dry season.
• Southern California Gas Co. (SoCalGas) confirmed the start of its planned system maintenance at Needles/Topock, which is expected to run through October 15. California prices were all up on Monday, with the SoCal Border Avg. up 86.5 cents from Friday.
• SoCalGas storage sat at 70.3 Bcf on June 19 after posting its 13th consecutive weekly injection going back to March 27. SoCal Citygate prices, which hovered around $3.500 in June, climbed 62.0 cents Monday to $4.235. Some of that storage, which is 7.7 Bcf below last year, may be utilized in the coming weeks with Aliso Canyon storage undergoing planned maintenance.
• Pacific Gas & Electric Corp. (PG&E) called for a system-wide stage 2 operational flow order over the weekend, lifting PG&E Citygate prices by 81.0 cents to $3.70. This is the highest since March 20, according to NGI’s Daily Historical Data. PG&E reported 40.2 Bcf in storage inventory as of June 29, 11.9 Bcf more than this time last year.