Natural gas spot market prices are narrowing between the benchmark Henry Hub and pricing points in and around the Marcellus and Utica shale plays as new pipeline projects have come online, the U.S. Energy Information Administration said Wednesday.
“With limited infrastructure to deliver natural gas to consumers, the Marcellus region can quickly become oversupplied, causing prices within the Marcellus [especially Pennsylvania] to be discounted,” the EIA said.
New infrastructure projects have come online to alleviate the disconnect between prices in producing and consuming areas around the country, Kallanish Energy understands.
While prices in the Marcellus are still low, trading under $1.50 per million British thermal units (MMBtu), the gap between Marcellus region price points and Henry Hub has narrowed, Kallanish Energy finds.
The price at Transcontinental Pipeline’s (Transco) Leidy Hub in central Pennsylvania averaged $0.93/per MMBtu below the Henry Hub price from Dec. 1, through Jan. 15. However, last July, the differential was much larger, averaging $1.65/MMBtu for the month, EIA found.
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