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More in STORE - April 2024 edition
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This issue highlights Spire Midstream President Scott Smith’s interview with S&P Global on how the addition of more renewable energy onto the Western U.S. energy grid is driving gas price volatility and demand for more natural gas storage.
S&P Global interviews Scott Smith about need for Spire Storage West expansion
Spire Midstream President Scott Smith recently chatted with S&P Global about how the addition of more renewable energy onto the Western U.S. energy grid is driving gas price volatility and demand for more natural gas storage. He also provided an update on the Spire Storage West expansion project, which will increase working gas capacity to 39 Bcf.
Natural gas market update
Spire Midstream concludes open seasons
Spire Storage West concluded its open season for additional firm storage capacity on Feb. 29. The strong market response to the open season reaffirms the need for additional storage capacity in the Rockies and West regions.
Spire Storage Salt Plains also closed an open season on Feb. 14 for additional firm storage capacity. The successful completion marked the second open season since Spire acquired the asset in 2023. Coupled with the continued optimization of the recently acquired MoGas Pipeline, these commercial activities highlight Spire’s goal of midstream growth in the Midcontinent region.
Market overview
In recent weeks, more Appalachian gas producers guided to lower or near flat production on the heels of weak gas prices across the lower 48. The decrease in production should come as positive news to an oversupplied market. Bullish signals are also showing up in the form of weather forecasts; this summer is projected to be one of the hottest in the last 30 years. DTN’s (March 27 update) forecast predicts a top three year for population weighted CDDs since the 1980s.
In the latest oil and gas midstream “mega deal,” Appalachian gas producer EQT Corp announced a $6.3 billion all-stock deal to purchase Equitrans Midstream on March 11. The deal comes after a historic 2023 year for U.S. oil and gas mergers and acquisitions and is the latest multibillion dollar deal in Q1 2024.
What we’re reading
- S&P Global Commodity Insights: CERAWEEK: US gas executives stress need for new storage capacity to accommodate growth
- RBN Energy: Fear And Loathing - With Brutally Bearish Fundamentals, How Low Could Natural Gas Prices Go?
- McKinsey: Global Energy Perspective 2023: Natural gas outlook
Construction update: Wyoming expansion project
Spire Storage West continues its expansion project. Drilling for the new wells is complete, with the first well pad in the project being placed into service on Feb. 23.
The new control room is erected, with interior buildout ongoing. We’re also continuing exterior work on the compressor building with new horsepower set to come online in November.
Spire Storage’s contribution to the Wyoming Wildlife Crossing Project
Spire Storage is proud to support the Kemmerer Wildlife Crossing Project, which will build road infrastructure and fencing along highways near the Spire Storage West facility, ultimately creating safer traveling conditions for motorists and migrating pronghorn and mule deer.
Spire Storage, along with several other donors, helped raise nearly $1M for the WYldlife Fund to bolster the competitive federal grant request. As a result, Wyoming received a $24.3M federal grant from the U.S. Department of Transportation for the project, which will kick off this year. Spire Storage is grateful to have played a role in this important project that will make roads safer for wildlife and motorists in Wyoming.