Canadian Natural Gas Falls as Ample U.S. Stocks Pare Import Need

Canadian natural gas fell after a report showed U.S. inventories are 58 percent above five-year norms, paring the need for imports of the fuel.

Alberta gas slid 1.8 percent. U.S. inventories gained 25 billion cubic feet to 2.512 trillion last week, according to the Energy Department, in line with the median of 25 analyst estimates compiled by Bloomberg. The five-year average increase is 26 billion.

“Canadian imports have been generally below year-ago levels through mid-April,” said Stephen Smith, an energy analyst and president of Stephen Smith Energy Associates in Natchez, Mississippi.

Alberta gas for May delivery fell 2.75 cents to C$1.47 a gigajoule ($1.40 per million British thermal units) as of 3:10 p.m. New York time on NGX, a Canadian Internet market.

Gas traded on the exchange is shipped to users in Canada and the U.S. and priced on TransCanada Corp. (TRP)’s Alberta system. NGX gas is down 49 percent this year.

Natural gas for May delivery on the New York Mercantile Exchange declined 4.4 cents to $1.907 per million Btu, the lowest settlement since September 2001.

Spot gas at the Alliance delivery point near Chicago fell 0.8 cent to $2.023 per million Btu on the Intercontinental Exchange. Alliance is an express line that can carry 1.5 billion cubic feet a day from western Canada.

Spot Prices

At the Kingsgate point on the border of Idaho and British Columbia, gas fell 2.08 cents to $1.7973 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices slipped 2.41 cents to $1.8609.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.4 billion cubic feet, 416 million below target.

Gas was flowing at a daily rate of 2.25 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 2.04 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 1 billion cubic feet. The system was forecast to carry 1.65 billion cubic feet today, or 59 percent of its capacity of 2.65 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 2.97 billion cubic feet at 2:05 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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