Columbia Gas urges pipeline customers to pick up restocking pace

Fri May 9, 2014 2:56pm EDT
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By Eileen O'Grady

HOUSTON May 9 (Reuters) - The operator one of the largest natural gas pipeline systems in the United States is urging customers to accelerate the pace of rebuilding stocks to ensure sufficient supply to meet heating demand next winter.

Columbia Gas Transmission (TCO), a unit of NiSource Inc , said gas injections on the system in April and early May trailed historical amounts due to heavy withdrawals during the coldest winter in decades, leaving working gas in the system at half the amount it was a year ago.

"This raises concerns about customers expecting to inject at higher rates later in the season," Columbia Gas said in an advisory on May 2. "If the majority of storage customers take this approach, demand for storage injections late in the season may exceed TCO's injection capabilities."

Some analysts are concerned that it will be difficult for utilities and others to rebuild the nation's gas stockpile sufficiently before the next heating season to avoid price spikes when cold weather arrives. Others expect rising gas production to allow storage to refill in time.

"We have just reminded our customers that being at 55-60 percent (of storage contract amounts) by July 1 will help ensure that everyone is on track for next winter," said Columbia spokeswoman Katie Dupuis Martin.

Analysts are closely watching storage levels on pipeline systems operated Columbia, Dominion Resources Inc, ANR Pipeline, a unit of TransCanada Corp and others.

Pipelines commonly post levels of working gas, but Dominion has no plans to issue an advisory similar to Columbia's.

"Our customers have indicated they intend to fill storage as they have done in the past," said Dominion spokesman Frank Mack.   Continued...