May 8, 2018 / 5:14 PM / 6 months ago

Southern California summer/winter natgas supply could fall short -regulators

May 8 (Reuters) - California regulators said reduced capacity in Southern California Gas' (SoCalGas) natural gas system poses a "moderate threat" to gas and electric reliability this summer and a "more serious threat" next winter.

The SoCalGas system has been operating at less than full capacity because of pipeline outages and restrictions on the use of the Aliso Canyon gas storage facility, the utility's biggest, following a leak between October 2015 and February 2016.

"The potential for additional (pipeline) outages means that the situation may be getting worse, not better," the Aliso Canyon Technical Assessment Group said in a report released Monday, noting SoCalGas avoided serious problems last winter due to unusually warm weather.

"With so many pipeline outages, it will be difficult for SoCalGas to fill storage to a level sufficient to ensure energy reliability throughout the coming winter," the group made up of state regulators and regional power companies said.

Officials at SoCalGas, a unit of California energy company Sempra Energy, could not immediately comment on the report.

To avoid power and gas interruptions this summer and next winter, the group recommended SoCalGas import liquefied natural gas (LNG) from Costa Azul in Mexico and that state regulators allow the utility to boost the capacity and use of Aliso Canyon.

The state has limited the amount of gas SoCalGas can inject into the 86-billion cubic feet (bcf) Aliso Canyon to just 24.6 bcf and only allows the utility to pull gas from the field when other options are not available to meet demand.

One billion cubic feet is enough to fuel about five million U.S. homes for a day.

The report said this summer's challenges stem primarily from continuing outages and reductions on key pipelines, including Lines 2000, 3000 and 4000 and 235-2.

The technical group projected capacity on SoCalGas' system would total 3.555 billion cubic feet per day (bcfd) this summer, which includes 2.655 bcfd from pipelines and 0.900 bcfd from storage.

That is lower than the 3.638 bcfd available without Aliso Canyon last summer and well below the 4.668 bcfd maximum the system could send out without Aliso Canyon if all pipelines were available, the group has previously forecast.

This summer's projected system capacity is just enough to cover forecast peak demand of 3.511 bcfd, the report said, warning higher gas usage or loss of additional pipelines could result in curtailments of the fuel to electric generators.

Reporting by Scott DiSavino; editing by Grant McCool

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