Working natural gas in storage rose to 3,716 Bcf as of Friday, October 21, according to EIA’s WNGSR (see Storage Figure). Following a net injection of 92 Bcf from the previous week, stocks are now 28 Bcf below last year and 158 Bcf above the 5-year average. The injection was much larger than the 5-year average injection of 47 Bcf and last year’s injection of 74 Bcf.
Another large build means that storage levels have nearly matched those of last year. Typically, the storage season is assumed to end at the close of October or early November. The East region tends to begin drawing on inventories before the other regions due to heating demand. If the relatively mild weather and high production levels continue, however, it would not be surprising to see injections continue well into November.
Temperatures during the week ending Thursday, October 20 averaged 58.0 degrees, 1.7 degrees warmer than normal and 1.1 degrees warmer than last year (see Temperature Maps and Data). Temperatures were above average in the Northeast and West but cooler than normal in the Midwest and much of the South. Weather was generally mild with the heating degree-days 17 percent below average for the week.
Other Market Trends
Kitimat LNG Receives Export License. Earlier this month, Canada’s National Energy Board (NEB) approved an application for KM LNG Operating General Partnership to export LNG from its proposed facility in Kitimat, British Columbia. The export license allows for export of up to 468 Bcf of natural gas per year over 20 years to Asian countries. Natural gas to supply the facility will be sourced from the Western Canada Sedimentary Basin. According to the NEB, this is the first LNG export license the board has considered since deregulation of the natural gas market in 1985. The terminal is a partnership between Apache Canada (the operator), EOG Resources Canada, and Encana. Construction on the facility is expected to begin in early 2012, with operations beginning in 2015. According to a recent BENTEK Energy analysis, the location of the Kitimat facility is optimally located for access to premium markets in Asia and could compete with new LNG projects in Australia.