Canadian Gas Gains on Cooler U.S. Weather, Lower Nuclear Output

Canadian natural gas rose, tracking an advance in New York futures, amid forecasts of colder weather in the western U.S. and as power companies closed nuclear plants for maintenance.

Alberta gas rose 3.2 percent. Demand for heat in the U.S. Southwest will exceed normal by 16 percent through Feb. 21, said Belton, Missouri-based Weather Derivatives. U.S. nuclear generation dropped to 88 percent of capacity, according to data compiled by Bloomberg. A decrease in nuclear availability may boost the use of gas-fired generators.

“Nukes are falling off a bit,” said Kyle Cooper, director of research at IAF Advisors in Houston. “If we get over the unplanned issues, the nuclear maintenance schedule looks pretty light this year.”

Alberta gas for March delivery gained 6.6 cents to C$2.095 a gigajoule ($1.99 per million British thermal units) at 2:55 p.m. New York time on NGX, a Canadian Internet market. NGX gas has lost 27 percent this year.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp.’s Alberta system.

Natural gas for March delivery on the New York Mercantile Exchange rose 10.1 cents, or 4.2 percent, to settle at $2.532 per million Btu.

Spot Prices

Spot gas at the Alliance delivery point near Chicago rose 5.64 cents, or 2.1 percent, to $2.6869 per million Btu on the Intercontinental Exchange. Alliance, an express line, can carry 1.5 billion cubic feet a day from western Canada.

At the Kingsgate point on the border of Idaho and British Columbia, gas rose 0.65 cent to $2.4631. At Malin, Oregon, where Canadian gas is traded for California markets, gas advanced 3.09 cents to $2.5933.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.7 billion cubic feet, 138 million below target.

Gas was flowing at a daily rate of 2.41 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 2.12 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 561 million cubic feet. The system was forecast to carry 1.88 billion cubic feet today, or 77 percent of its capacity of 2.44 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 2.94 billion cubic feet at 1:50 p.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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