Around 11pm on Oct 11, Texas Eastern Transmission (TETCO) declared a force majeure on an unplanned outage that occurred on the gas pipeline just south of its Berne Compressor Station in eastern Ohio. As of mid-morning on Oct 12, TETCO has not yet provided an estimate for when service will be restored. As a result of the force majeure, TETCO notified shippers that nominations scheduled south through the compressor station (on the 30-in line) are being reduced to zero for gas day Oct 12.
EVA’s pipeline flow data shows outflows at the Berne Compressor Station have averaged ~1.6 BCFD over the last 30 days, ranging even higher (1.7 BCFD) over the past week. Preliminary data shows flows at the station fell significantly between Oct 10-11, dropping ~0.7 BCFD. Flow data for Oct 12 will likely be revised even lower on the I2 and I3 cycles, falling to near zero by the end of the day. Similarly, flows at receipt points in Zone M2 could be revised down from the evening cycle due to the force majeure.
EVA expects the outage situation to exert bullish pressure on downstream gas prices. Northeast gas might be redirected downstream via Dominion, TCO and TGP, or go into storage facilities. However, given current constraints on takeaway capacity and with storage nearing capacity, production could temporarily be limited, thereby putting downward pressure on supply-area pricing such as Dominion South and TETCO M2.
As of mid-morning on Oct 12, next day Dominion is averaging $0.31/MMBTU for tomorrow delivery. The November contract is also lower DoD, trading near near -$0.945/MMBTU. The outage is unlikely to last more than a few days, though the exact timing is uncertain and coincidentally, tomorrow is Friday the 13th…