An equipment failure on an El Paso Natural Gas Pipeline in New Mexico is stranding gas in the Permian Basin and prices there plummeted Monday to an all-time low.
El Paso Permian dropped $1.31 on the day and was trading at 20 cents/MMBtu.
EP Permian cash basis widened to negative $2.65/MMBtu after averaging negative $1.11/MMBtu in the year so far. Spot prices averaged 71 cents below Henry Hub during the same time last year.
S&P Global Platts began assessing EP Permian on December 28, 1990. The last time it was assessed at a lower price than on Monday was March 30, 2001, when it came in at zero cent/MMBtu on a day when no trades were seen.
The previous low was 41 days ago on February 4 when prices settled at 40.5 cents/MMBtu.
According to the company's website equipment failures at the Lordsburg and Florida compressor stations will reduce capacity through the L2000 constraint to 384,700 dekatherms, or 66% of the usual capacity of 584,700 Dth - leading EPNG to declare a force majeure until further notice.
The reduction in capacity comes at a time when warmer weather has moved into Southern California which dampened demand to 2.7 Bcf Monday after averaging nearly 3 Bcf over the previous seven days.
