SoCal Citygate Prices Skyrocket Amid Storage Draws

Southern California natural gas prices have surged as new pipeline capacity has come online upstream. The SoCal Citygate spot price settled at $3.850/MMBtu on Thursday, while the SoCal Border Avg. reached $2.975. The premium of the SoCal Citygate to the SoCal Border prices widened to 88.1 cents in July from 68.7 cents a year earlier and has held steady at 88.6 cents month to date.

SoCalGas has drawn nearly 8.1 Bcf of system storage since a July 12 peak of 107.6 Bcf, leaving the balance at 99.5 Bcf as of Aug. 5. This represents roughly half the storage built since April 1. Net withdrawals have occurred on 22 of the 24 gas days since the peak, averaging roughly 342 MMcf/d.

SoCalGas reversed from injections to pulling from storage to meet weather demand, running 70% on summer cooling load and 30% on reduced receipts. SoCal Citygate spot prices have averaged $3.744 since the draw began, up from $2.416 during the build.