Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Marcellus Poised to Replace Depleted Natural Gas Inventories

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Marcellus Poised to Replace Depleted Natural Gas Inventories

Article excerpt

Just as this harsh winter broke records nationwide, so did the amount of natural gas that was available in storage and used to heat homes and businesses.

For the first time in more than a decade, the amount of natural gas in storage nationally fell below 1 trillion cubit feet (Tcf) as of March 14, according to the U.S. Energy Information Administration's weekly report. That's down 49.4 percent from about 1.89 Tcf during the same time last year.

"After this winter -- a winter that won't quit -- it's no surprise that storage is at historically low levels," said Joe Gregorini, vice president of rates and regulatory affairs for Pittsburgh-based Peoples Natural Gas.

But, while storage inventories are low, the Marcellus Shale region is generating the supply needed to help refill the deficit, Mr. Gregorini said. "The supply will be there, and companies [that operate storage facilities] will be looking to fill it," he said. "The Marcellus and other shale plays have plenty of gas to deal with events like this winter."

The EIA is predicting a "robust" injection season between April and October with nearly 2,500 billion cubic feet to be added to storage as drillers seek to rebuild inventory levels before the next winter heating season.

Jeff Moore, energy analyst for Denver-based Bentek Energy, said the market is "poised for record injections" this summer.

"We have record production. We have a huge hole to fill. The two go hand-in-hand," Mr. Moore said. "The Marcellus will help fill the storage fields in the East."

Even so, storage inventories may not reach the high levels seen in the past few years.

The Energy Information Administration expects that by the end of October -- after natural gas producers have had time to send their supply to storage facilities -- the amount of natural gas in storage will be at its lowest level for that time of year since 2008.

High injections, meaning the amount put back into storage, "would not fully erase the deficit in storage volumes caused by this winter's heavy withdrawals," EIA reported in its short term energy outlook.

As of March 14, storage levels had hit "the lowest inventory since 2003, which was obviously a different market. …

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