When it comes to the link between colder than average temperatures and Natural Gas market volatility, New England knows better than most. e New England region had seen a very mild previous winter, and the effects of COVID 19 further brought down Natural Gas pricing across the entire region.
Fast forward to February 2021, where we saw most of the country experiencing colder than average temperatures. e New England grid is designed to handle these colder than average temperatures, and for the month of February 2021, the region was able to benet from a saving grace, LNG. Most of the news regarding LNG has revolved around our exportation facilities going to European and Asian markets.
Here we address how the region of New England was able to benefit from taking in LNG to tamper volatility on the supply side as well as pricing side.
Between Canaport and Everett, MA, the region received 5 LNG tanker loads that helped our region keep Natural Gas Cash pricing well below the volatile levels seen in previous cold winters. is LNG is gasied and injected into the region’s transport system. is brings lower cost gas immediately into the region bypassing the limited bandwidth of the major transport lines coming into the region. It goes to the power generators to keep the lights on, pressurizes the lines to keep the manufacturers running, and reduces volatility in pricing.
As the weather warms through March, we will see reduced withdrawals on the nation’s Natural Gas Storage facilities, and we will begin to transition to injection season which traditionally starts April 1 each year. Between April 1, and October 31, the facilities take injections, so they are ready to be released for withdrawal season. LNG helps play a role on both fronts of injections as well as withdrawals.
So next time you are driving to Logan Airport or are on the north shore of the Bay of Fundy, look at the terminals.