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Canada Natural Gas Gains on Below-Normal Stockpile Gain

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May 31 (Bloomberg) -- Canadian natural gas rose as increased use of the fuel for power generation helped trim a surplus in U.S. stockpiles.

July gas in Alberta climbed 2.5 percent after the U.S. Energy Department said gas in storage rose 71 billion cubic feet last week to 2.815 trillion. Inventories are 35 percent above the five-year average, compared with 61 percent March 30, department data showed today.

“Power generation spiked last week,” said Gordy Elliott, a risk-management specialist with INTL FC Stone LLC in St. Louis Park, Minnesota. “It consumed a lot of natural gas that would normally go to inventories.”

Alberta gas for July delivery gained 4.75 cents to C$1.98 a gigajoule ($1.82 per million British thermal units) as of 3:15 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.’s Alberta system. NGX gas, which rose 14 percent in May, has declined 31 percent this year.

Natural gas for July delivery on the New York Mercantile Exchange gained 0.4 cent to settle at $2.422 per million Btu.

Spot gas at the Alliance delivery point near Chicago fell 12.77 cents, or 5.2 percent, to $2.3432 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 declined 3.6 cents, or 1.6 percent, to $2.1618 per million Btu. At Malin, Oregon, where Canadian gas is traded for California markets, prices slipped 2.63 cents, or 1.2 percent, to $2.2655.

Volume on TransCanada’s Alberta system, which collects the output of most of the nation’s gas wells, was 16.9 billion cubic feet, 146 million above target.

Gas was flowing at a daily rate of 2.23 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 1.66 billion cubic feet.

Available capacity on TransCanada’s British Columbia system at Kingsgate was 891 million cubic feet. The system was forecast to carry 1.73 billion cubic feet today, or 66 percent of its capacity of 2.62 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 2.87 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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