Williams sees significant gas shut-ins

OREANDA-NEWS. November 03, 2015. Energy infrastructure company Williams said today that significant amounts of northeast natural gas production remain shut in as producers await new pipelines and the appropriate price signals to bring those supplies to market.

The company estimates that 900mn cf/d (25mn m?/d) of gas on its northeast gathering system is shuttered and there is a growing backlog of wells in the Marcellus shale, the top gas-producing field by volume.

"If our producers saw \\$2/mmBtu pricing we would see tremendous volume growth in the northeast," Jim Scheel, senior vice-president of northeast gathering and processing said during a conference call to discuss Williams' third quarter results.

US gas market participants are keeping a close eye on northeast production as winter approaches. New pipelines such as Williams' 525mn cf/d Leidy Southeast expansion will funnel more northeast production into parts of the southern US, and Columbia Gas' 650mn cf/d East Side expansion will feed more Marcellus gas into the mid-Atlantic. Both projects are scheduled to come on line later this year.

Those pipelines will provide an outlet for gas stranded in the northeast but could aggravate an already gas-glutted US market. Producers in the northeast shuttered production earlier this year as gas prices at some markets there dropped below \\$1/mmBtu. Prices this month on the Williams-owned Leidy line are averaging about \\$1.02/mmBtu, down from \\$1.97/mmBtu in October 2014.