Presenter says Pacific Northwest relies heavily on Canadian gas; pipeline constraints and weather drive local prices

Randy Schultz, a market analyst with IGI Resources Inc., told the Idaho Oil and Gas Conservation Commission on Feb. 18 that natural-gas pricing and reliability in the Pacific Northwest are shaped chiefly by a single major pipeline, limited regional storage and large flows of gas from Canada.

Schultz said IGI and other market participants view three principal supply pricing points for the Northwest — Sumas (British Columbia), the Alberta hubs, and Rocky Mountain points — and that most gas that serves Idaho, Washington and Oregon moves on Northwest Pipeline. He told the commission that roughly 80% of the gas serving the Pacific Northwest market (Washington, Oregon, Idaho and northern Nevada) comes from Canada.

Schultz described how the region’s pipeline is multi-directional and operates on “displacement,” meaning molecules nominated at one point do not necessarily travel the physical route to a distant city; instead, regional scheduling and nominations shift flows and prices. He said constraints…