NEW YORK, Jan 23 (Reuters) - William Companies Inc’s Transcontinental Gas Pipeline Co (Transco), a major provider of natural gas to the U.S. Northeast, issued a system-wide operational flow order to its natural gas shippers on Wednesday as cold weather led to significant demand.
In a website posting to customers, Transco said it issued the order to ensure system integrity, manage imbalances on its system and handle within-the-day volatility effective on Thursday.
Gas traders said gas for Thursday delivery on the Transco pipeline at the New York citygate traded as high as $43 early and was at an average price of $37.50, the highest average price for New York tracked by Reuters since a peak at $38 in early January 2008.
Operational flow orders, or OFOs, protect the integrity of a pipeline by requiring shippers to balance their supply with customers’ usage, typically within a specified tolerance band.
The 10,000-mile Transco natural gas pipeline system has the capacity to carry 9.6 billion cubic feet of supply per day from South Texas to New York City. It is a major provider of natural gas to the U.S. Northeast and Southeast.
The Weather Channel’s weather.com said temperatures in New York would reach a high of only 22 degrees Fahrenheit on Wednesday and 23 F on Thursday, dipping to lows in the mid-teens F overnight, with a similar forecast for much of the week.