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2013 Gas Supply and Pricing

Outlook Outlook
Cascade Natural Gas Cascade Natural Gas
Corporation Corporation
Mark Sellers-Vaughn
Manager, Supply Resource Planning
J uly 18 2013 J uly, 18, 2013
Market Fundamentals and Assessment
US recovery continues to moving along, but very slowly.
Natural gas prices while relative low are still regionally running 50-60% higher than at this
time last year. NYMEX Henry Hub is flirtingwith $4 for the upcoming Nov13-Mar14 forward
period. p
Shale in not only abundant in US, but globally as well. North America has the technological
advantage for now.
Nationally and regionally, storage levels continue to be above the 5 year average
NOAA Weather: above normal tropical weather is expected during the J un13-Nov13
hurricane season with 3-6 being intense level hurricanes hurricane season, with 3-6 being intense level hurricanes.
Baker Hughes reports that oil rig counts down by 4 to 1391 but gas rigs are up by 7 to 362
active as J uly 12 (11 week high). Stockpiles are up 82 billion CF to 2.687 trillion; five year
injections remain higher than the 5 year average.
Dalles Dam flows projected to be 97% of normal this year. Grand Coulee at 104%.
EIA expects this year's annual average natural gas Henry Hub spot price to be $3.76. EIA
projects a 2014 price of 3.91 (slightly down from last month's projection).
LNG exports may have the potential to cause price volatility if US becomes a major global LNG
force
Keeping an eye on USnatural gas exports to Mexico andCanadian LNGexports, which looks Keeping an eye on US natural gas exports to Mexico and Canadian LNG exports, which looks
to be an increasing factor.
Keeping an eye on nuclear plant closings and the possibilities of natural gas replacements.
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Cascade Natural Gas Corp. Cascade Natural Gas Corp.
GAS SUPPLY AND PRICING OUTLOOK N 13 O 14 GAS SUPPLY AND PRICING OUTLOOK Nov13-Oct14
MEETINGCUSTOMERSNEEDS
Ensure All Core Customers Natural Gas Needs are Met -
Through Disciplined Market Analysis, Long-term Contracts, and Prudent
Storage Management
Actively Promote Customer Conservation
Mitigate Price Volatility for Customers -
Through Multi-Year Hedging anda Diversified Portfolio Through Multi Year Hedging and a Diversified Portfolio
EMPLOYINGEFFECTIVESUPPLYSIDESTRATEGIES
Maintain a Rolling Multi-Year Physical Supply Portfolio g y pp y
Firm, Diversified Supply Contracts
Prices are Hedged with Fixed-price Physical contracts. Our portfolio also includes
a mixture of structured products designed to take advantage of both upside and
downside price opportunities
Utilize Market Area Storage: J ackson Prairie and Plymouth LNG g y
Effectively Manage Wholesale Prices -
Through Cost-Effective FOM and Day Gas Purchases
By Participating in USA and Canadian Pipeline Rate Filings and Forums
By Optimizing Pipeline Capacity and Other Core Resources Through Available
Release Mechanisms (capacity release asset management agreements)
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Release Mechanisms (capacity release, asset management agreements)
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Typical Winter Day Supply Stack Nov13-Mar14
250000
200000
IMBALANCE
Plymouth
(Storage)
FOM/Day Gas
(As Needed)
J k P i i
150000
IMBALANCE
STORAGE
PEAKING
CITYGATE
J ackson Prairie
(Storage)
P ki (A
Annual (365 days)
100000
BRITISH COLUMBIA
ROCKIES
ALBERTA
Peaking (As
Needed)
Citygate (As
Needed)
Pipeline
0
50000
Pipeline
Imbalance (if
available)
Seasonal (Winter)
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Total Core Load in this example is 195,000 dths, with a system degree day of 42.
$5.50
Gas Supply Regional Basis Price Forecast as of 07/ 10/ 2013
$4.50
$5.00
$3.50
$4.00
$2.50
$3.00
$2.00
NYMEX CURRENT MARKET SUMAS CASCADE FORECAST PRICE
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ROCKIES CASCADE FORECAST PRICE AECO CASCADE FORECAST PRICE
MALIN CASCADE FORECAST PRICE
November 2013 through October 2014
Gas Supply Outlook and Strategies
Peak events unlikely to occur based on most recent
weather predictions p
Cascade has sufficient firm supplies flowing on our firm
transportation to meet load requirements
Firm peaking and citygate delivery contracts in place
Storage accounts will be full by September 30, 2013
Recall released firm capacity, whenever required
We will continue to use fixed-price physical supplies to
f fl minimize impact of price fluctuations
Continual assessment of portfolio and market to seek out
opportunities to minimize portfolio costs
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2013Gas Supply and Pricing pp y g
Outlook
Questions? Questions?