FP: Gas producers angry with TransCanada over new pipeline system rules

|About: TransCanada Corporation (TRP)|By:, SA News Editor

Natural gas producers in Alberta are frustrated with TransCanada (NYSE:TRP) for changing the way it operates its gas pipeline network with little notice, which has led to massive commodity price swings, Financial Post reports.

Under its new set of priorities, TRP gave producers who have firm-service contracts on its natural gas pipelines priority over shippers that use the service intermittently; previously, the company would slightly scale back service for firm-service shippers during maintenance to make allowances for spot shippers, but the new policy means that at times of maintenance or outages, TRP entirely cuts service to shippers with interruptible contracts on its gas gathering and transmission network, leaving those shippers unable to access the pipeline network to get to storage sites.

As a result, natural gas prices at Alberta’s AECO pricing hub have been extremely volatile in September and October, and many gas producers have been forced to shut in production at some of their wells in response to swings in gas prices to avoid selling for virtually nothing in the spot market, FP reports.