2014 Natural Gas Outlook Ch-ch-ch-Changes Randy Friedman Director, Gas Supply July 8, 2014
Baby it’s cold outside Lower-48 10 Coldest Winters Since 1950 Bank of America, special report for NW Natural, April 1, 2014 Jan. 6, 2014 - Ice builds up along Lake Michigan 2nd coldest in the last 35 years
Crazy after all these years • Lowest spring inventory levels in a decade • Pressure on summer refill prices • Concern over storage inventory levels for the winter RBC Capital Markets, Weekly Underground Storage Report, April 27, 2013
We’ll meet again some sunny day TD Securities, Commodities Market Comment, June 26, 2014
Everything old is new again Active Gas Trading Hubs Storage Plants Owned or Contracted by NW Natural Pipeline Capacity Under Contract to NW Natural Natural Gas Reserves Owned by NW Natural
Back in the saddle again • We went from 100% reliance on Sumas to zero after the Western Energy Crisis of 2000-2001 • Added T-South to Station 2 • Added SCP, Foothills, NGTL to AECO • T-South contract is up for renewal and current Station 2 to Sumas price spreads do not justify retaining that capacity • About ½ of our Sumas receipts will still be gas purchased at AECO and delivered through SCP • As before with Station 2, we will hedge a high percentage of our winter purchases at Sumas due to its higher volatility Station 2 NGTL T-South Alberta (AECO) Foothills SCP Sumas
It’s been such a long time… • NW Natural had relied on NWP’s Plymouth LNG Plant for firm peak day service for over 30 years. • Service was interrupted in Dec. 2013 due to pipeline constraints through the Columbia Gorge. • We removed Plymouth for our firm resource stack and started evaluating replacement options through the IRP process. • March 31, 2014: an incident at Plymouth probably means Plymouth will not even be an option for us this coming winter. • We have some concerns if a design day hits, but the problem will ease the following year due to Mist recall.