We are pretty well versed in writing about freeze-offs, but we struggled with this phenomenon that is currently shaping the Western Canadian gas market…hot-offs. Several compressor stations have gone offline for periods of time due to the extreme heat. The unplanned compressor outages beginning on the weekend resulted in a decline in field receipts which is expected to persist for several days until temperatures moderate. Field receipts took a nosedive from just over 12 Bcf/d last week to just 10.3 Bcf/d for gas day 28.
The operational stress felt on the NGTL system showed in the balances yesterday. EGAT volumes declined to ~3.5 Bcf and NGTL had a very unusual summer withdrawal of 0.7 Bcf. Exports to the Northwest are flowing near capacity as power outages in California and western states lead to higher gas prices.
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Source: NGTL, AEGIS
AECO cash rocketed to $4.90 CAD/GJ yesterday in early trading before settling at $4.10 CAD/GJ. AECO cash is hovering around $4.15 CAD/GJ while Station 2 is ~$3.85 CAD/GJ midmarket this morning.
All-time records have been set in Interior BC, and the heat warning spans the western provinces, even stretching up into Northwest Territories and The Yukon. The extreme heat is expected to stick around for at least this week and likely into next with little relief. It is likely that supply continues to be impacted particularly if overnight temperatures do little to give equipment a reprieve.
Source: Environment Canada