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New Jersey Natural Gas Market Update
Presentation to:
SNJDC Natural Gas Seminar
Tom KileyNortheast Gas Association
March 25, 2015Mullica Hill, NJ
About NGA
Non-profit trade association
Local gas utilities (LDCs) serving New England, New York, and New Jersey
Several interstate pipeline companies
LNG importers (Distrigas, Repsol) and LNG trucking companies
Over 200 “associate member” companies, from industry suppliers and contractors to electric grid operators
www.northeastgas.org
A Cold 2015…
• Coldest February in over 2 decades, and 3rd coldest February in NJ since 1895.
• Average temp. of 22 degrees, more than 11 degrees colder than average.
• Monthly cold record remains Feb. 1934 at 17.9 degree average.
• Consistent throughput, esp. Jan-Feb
• High demand on system infrastructure
1200 2200 3200 4200
New Eng. Actual
New Eng. Normal
Mid-Atl. Actual
Mid-Atl. Normal
Source: U.S. NOAA. Data thru Feb. 28, 2015.
Heating Degree Days,Nov. 2014 - Feb. 2015
New Peak Day Set by Gas Utilities in Feb.
• South Jersey Gas – new sendoutrecord on Feb. 15, 2015
• New Jersey Natural Gas – new sendout record on Feb. 15, 2015
• PSE&G – 2nd highest sendout on Feb. 15, 2015
• New England natural gas utilities combined – new sendout record on Feb. 15, 2015
2‐5 2‐31‐28 1‐8
2‐2
1‐13 1‐7
18 of Top 25 Days on Algonquin Pipeline Set this Winter
Chart: Spectra Energy
New Records for Pipeline Throughput: AGT
Market Prices Less Volatile than Last Winter – but still higher than national average
Chart: U.S. FERC, March 2015
Short-Term Price Outlook: EIA
Source: U.S. EIA, March 2015
0
2
4
6
8
10
12
Jan 2014 Jul 2014 Jan 2015 Jul 2015 Jan 2016 Jul 2016
Henry Hub Natural Gas Pricedollars per million Btu
Historical spot price
STEO forecast price
Source: Short-Term Energy Outlook, March 2015.
Note: Confidence interval derived from options market information for the 5 trading days ending Mar. 5, 2015. Intervals not calculated for months with sparse trading in near-the-money options contracts.
Natural Gas Retains a Price Advantage
0
500
1,000
1,500
2,000
2,500
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Source: U.S. EIA, Mar. 10, 2015. Natural gas data is for Northeast states of CT, ME, MA, NH, NJ, NY, PA, RI, VT. Heating oil is U.S. average.
Average Consumer Expenditures for Heating Fuels, $, 2008-2015
Natural Gas
Heating Oil
Overview
Natural Gas Use in NJ
Primary energy: 30%
Electric generation capacity: 54%
% of households with gas as main heating fuel: 74%
Annual consumption: 681 billion cubic feet (Bcf) of natural gas.
Home Heating Market
• New Jersey statewide has strong gas share for home heating: 74% (compared to 56% in NY and 38% in New England).
• NJ home heating shares: gas, 74%; oil, 10%; electric, 12%
• Still potential for further residential sector growth– notably in southern part of state
Proposed Power Plants by Fuel, Northeast
Source: ISO-NE
Natural Gas, 63
Other, 1
Wind, 36GENERATOR PROPOSALS IN THE
ISO NEW ENGLAND QUEUEPercentage, 2015
NEW YORK ISO SYSTEM, 2014Proposed Power Projects by Fuel Type
Megawatts
Source: NY ISO
95
0.6 4 0.40
20
40
60
80
100
NaturalGas
Wind Solar Other
NEW JERSEY, 2014Queued Capacity by Fuel Type,
Percentage (In-State Only)Approx. 7,776 MW
Source: PJM, March 2015
63%
70%95%
Interstate Pipelines
· Algonquin Gas Transmission and Texas Eastern Transmission, subsidiaries of Spectra Energy. · Columbia Transmission, a subsidiary of NiSource. · Dominion Transmission· Tennessee Gas Pipeline Company, a subsidiary of Kinder Morgan. · Transcontinental Pipeline, a subsidiary of Williams.
Source: U.S. EIA, 7-14
Marcellus Shale Production:Still Robust
Source: U.S. EIA, 3-15
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Jan-
11
Jul-1
1
Jan-
12
Jul-1
2
Jan-
13
Jul-1
3
Jan-
14
Jul-1
4
Jan-
15
Marcellus Production, 2007-2015, Mcf/d
Prepared by NGA, based on publicly available information. Project locations approximate. As of 3-15.
VERMONT
Proposed Pipeline Projects
Spectra, “AIM”
National Fuel / Empire,
“Tuscarora Lateral”
Williams, “Rockaway Lateral”
Williams & Cabot,
“Constitution Pipeline”
Tennessee, “Northeast
Energy Direct”
Iroquois, “Wright
Interconnect”
Columbia, “East Side Expansion
Project”
PNGTS, “C2C”
Spectra, “Atlantic Bridge”
Tennessee, “ConnecticutExpansion”
Iroquois, “South to North”
National Fuel / Empire, “Northern
Access 2015 & 2016”
Dominion, “New Market
Project”
Tennessee, “Niagara
Expansion”
PennEastProject
Williams/Transco, “Garden State
Expansion Project”
Spectra/ Eversource
Energy/National Grid, “Access
Northeast”
Millennium, “Corning to Rockland”
East Side Expansion Project:Columbia Gas / NiSource
Project Scope: The project will involve the installation
of two natural gas pipelines with approximately 9.5 miles of pipeline in Chester County, PA and 9.5 miles of pipeline in Gloucester County, NJ. Provides up to 312,000 Dth/d.
Customers:• Cabot Oil & Gas Corporation, • New Jersey Natural Gas Company, • Southwestern Energy
Services Company, • South Jersey Gas Company, and• South Jersey Resources Group, LLC
Project Status: Received FERC Certificate, Dec. 2014 Planned In-Service Date
– November 2015
Map: Columbia Gas Transmission
Garden State Expansion: Transco/Williams
Project Scope: Provide up to 180,000 dekatherms
per day of natural gas service in two phases to a new delivery point with New Jersey Natural Gas in Burlington County, N.J. Installation of new compression and
meter/regulation station; no pipeline expansion required.
Customer:New Jersey Natural Gas
Project Status: FERC filing, Feb., 2015 Est. Phase I in-service: Nov. 2016 Est. Phase 2 in-service: Nov. 2017
Map: Transco/Williams
PennEast Pipeline Project
Project Scope: Provide up to 1 Bcf/d to move Marcellus
production to customers in PA and NJ. Proposed 110-mile, 36” pipeline.
Project Partners: AGL Resources,NJR Pipeline Company, a subsidiary of
New Jersey Resources, PSE&G Power, Spectra Energy Partners, South Jersey Industries,UGI Energy Services (UGIES), a
subsidiary of UGI Corporation.
Project Status:Open season held, Aug. 2014 In FERC pre-filing process, Oct. 2014 Proposed in-service: 2018
Map: PennEast
System Safety / Infrastructure Enhancements
• Primary focus of federal and state oversight agencies, along with addressing methane emissions.
• NJ gas utilities working with BPU to implementstorm resilience programs and acceleratereplacement of older pipeline system components.
Northeast Market Opportunity• Northeast region remains highest-priced U.S. region for energy
• Traditionally at a distance from gas resource fields – now very close thanks to Marcellus
• Market demand remains strong for gas for home heating, power gen – and potentially transportation
• Pipeline capacity constraints in Northeast are leading to numerous infrastructure proposals, to increase access to Marcellus gas.