Outages Could Threaten New England’s Gas Market
After frequent rescheduling and downgrading, including a last-minute delay after market close last Friday, September 21, New England’s main natural gas pipeline, Algonquin Gas Transmission (AGT), may finally run their biggest maintenance event of the year in terms of impact and duration. From September 25 through October 12, Algonquin will conduct an outage between its Stony Point (NY) and Oxford (CT) compressors.
The outage reduces operational capacity at the Stony Point compressor from 1,141 MMcf/d to 744 MMcf/d for the duration of the event. While AGT reported average flows of 1,110 MMcf/d through Stony Point over the last two weeks, implied flows including no-notice nominations show Stony Point averaging 1,274 MMcf/d, meaning this event will cut over ~0.5 Bcf/d of mainline flows relative to the previous two-week average. Assessing previous years’ flows through Stony is somewhat tricky because of recent years’ restrictions for the Algonquin Incremental Market (AIM) expansions, but Summer ’18 Stony Point flows are well above the five-year average, once adjusted for no-notice. The outage also limits the Oxford compressor to a capacity of 867 MMcf/d.
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Algonquin Gas Transmission mainline as illustrated in Genscape’s Natural Gas RT platform.
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Stony Point Compressor Station to Oxford outage from August 21, 2018 through September 22, 2018.
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Stony Point flows are well above the five-year average this September.
Stony Point is the main constraint point for the AGT mainline, meaning this event brings significant upside risk to AGT Citygate prices and downstream demand. Mainline demand will rely on supply interconnects downstream of Stony Point; including Everett liquefied natural gas (LNG), the Salem Essex interconnect with Maritimes, and the Lincoln and Mendon interconnects with Tennessee Gas Pipeline (TGP). AGT also notified preemptively declaring an operational flow order (OFO) effective on Monday, heavily penalizing shippers for imbalances. Algonquin also plans to suspend its no-notice service beginning on September 25 and lasting for the duration of the maintenance.
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