Canadian Natural Gas Falls as Nuclear Plant Starts Ease Demand

Canadian natural gas fell as nuclear power plants came back into service in the U.S. following seasonal maintenance, cutting demand for power generation from other fuels.

U.S. stockpiles probably rose 71 billion cubic feet to 1.828 billion in the week ended May 6, according to the median of 19 estimates compiled by Bloomberg. The five-year average gain for the week is 90 billion. U.S. nuclear power output fell to a 12-year low last week on reactor shutdowns, according to Nuclear Regulatory Commission data.

“The nukes are starting to come back on line,” said Martin King, senior commodities analyst with FirstEnergy Capital Corp. in Calgary. The increase in output is likely to boost additions to gas storage in the next few weeks, he said.

Alberta gas for June delivery fell 2.5 cents to C$3.43 per gigajoule ($3.38 per million British thermal units) as of 12:15 p.m. New York time, according to NGX, a Canadian Internet market. Gas traded on the exchange goes to users in Canada and the U.S. and is priced on TransCanada Corp.’s Alberta system.

Natural gas for June delivery on the New York Mercantile Exchange fell 9.2 cents, or 2.2 percent, to $4.154 per million Btu.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16 billion cubic feet as of 11 a.m. in New York, 70 million below its target level.

Pipeline Flows

Gas was flowing at a daily rate of 2.62 billion cubic feet at Empress, Alberta, where the fuel is transferred to TransCanada’s main line.

At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 1.92 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1.34 billion cubic feet. The system was forecast to carry 1.56 billion cubic feet today, about 54 percent of its capacity of 2.9 billion.

The volume on Spectra Energy’s British Columbia system, which gathers the fuel in northeastern British Columbia for delivery to Vancouver and the Pacific Northwest, totaled 2.8 billion cubic feet at 11:05 a.m.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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