Canadian natural gas rose along with New York futures after Chesapeake Energy Corp. announced plans to reduce production.
Alberta gas rose 6.9 percent after Oklahoma City-based Chesapeake said it will pare production immediately by 500 million cubic feet a day and cut investment in gas fields this year. The company accounts for about 9 percent of U.S. gas output.
“It’s not the first company that’s come out and said they would cut production,” said Eric Bickel, a natural gas analyst at Summit Energy Services in Louisville, Kentucky. “Chesapeake is the largest so far.”
Alberta gas for February delivery rose 14.75 cents to C$2.30 a gigajoule ($2.16 per million British thermal units) at 3:05 p.m. New York time on NGX, a Canadian Internet market. NGX Alberta gas has slipped 20 percent this month.
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 February delivery on the New York Mercantile Exchange rebounded from a 10-year low. It rose 18.2 cents, or 7.8 percent, to settle at $2.525 per million Btu.
Spot gas at the Alliance delivery point near Chicago jumped 20.97 cents, or 8.6 percent, to $2.6493 per million Btu on the Intercontinental Exchange. Alliance, an express line, can carry 1.5 billion cubic feet a day to the Midwest from western Canada.
At the Kingsgate point on the border of Idaho and British Columbia, gas rose 11.26 cents, or 4.7 percent, to $2.5312, according to ICE. At Malin, Oregon, where Canadian gas is traded for California markets, gas was up 14.7 cents, or 5.9 percent, to $2.6311.
Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.6 billion cubic feet, 194 million below target.
Gas was flowing at a daily rate of 2.22 billion cubic feet at Empress, Alberta. The fuel is transferred to TransCanada’s main line at Empress.
At McNeil, Saskatchewan, where gas is transferred to the Northern Border Pipeline for shipment to the Chicago area, the daily flow rate was 2.16 billion cubic feet.
Available capacity on TransCanada’s British Columbia system at Kingsgate was 312 million cubic feet. The system was forecast to carry 1.71 billion cubic feet today, or 85 percent of its capacity of 2.02 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 3.09 billion cubic feet at 1:35 p.m.