RE:RE:RE:RE:RE:RE:Hedging A couple of interesting reads in nat gas this week.
One on high nitrogen content in some permian gas production ruins the LNG economics when mixed in the pipeline stream. So far they have dealt with it by blending. An item to watch going forward. RBN had one article.
It looks like the hot weather, lower gas production and restart of some LNG has worked inventories back down to the 5 year average.
To me this confirms a belief that the main benefit to us on this side of the pipeline is that LNG and pipeline exports to Mexico will shorten gas price cycles. No more multi year price troughs while industry works off some enormous supply imbalance.
With another 10-12 bcf of LNG facilities coming in the next few years that will get more interesting.
Regarding AECO prices there is still some reluctance to enter long term pipeline export deals pre LNG Canada start up. More capacity is also coming on to export to the U.S west coast and likely an LNG Canada expansion. And Alberta demand is growing internally.
that could keep spot a little lower until producers see a direction on prices, tolls and contracting. The feeling is pretty optimistic over the next two years
Cold weather anyone?