Houston (Platts)--21Nov2012/153 pm EST/1853 GMT

Nuclear plant outages will boost US natural gas demand from power generators through January, but a light spring maintenance season will translate into lower gas burn in the first few months of 2013, according to a Barclays Capital report released late Tuesday.

A "drastic drop" in US nuclear plants' output has boosted gas demand from generators so far in November, the analysts said. November's nuclear generation low is possibly record-setting, surpassed only by the heavy turnaround season in spring 2011, they added.

US Nuclear Regulatory Commission data shows nuclear plants are running at an average of 74,769 MW so far this month, about 12,500 MW or 14% lower, than the same time a year ago.

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Barclays analysts estimated that if this was replaced entirely by gas-fired generation, it would mean a 2.2 Bcf/d increase in gas demand compared with the same time a year ago.

Announced restart dates and maintenance schedules suggest nuclear plant utilization will be 3,750 MW and 1,900 MW lower in December and January 2013, respectively, than the year-ago levels. If fully replaced by gas, that would translate into an incremental 675,000 Mcf/d and 340,000 Mcf/d, respectively, for those months.

The analysts noted that most of the plants are offline because of scheduled maintenance, while others are undergoing prolonged shutdowns.

Some, such as the 482-MW Fort Calhoun plant in Nebraska and the 838-MW Crystal River-3 unit in Florida have been idle since 2011 and 2009, respectively.

Fort Calhoun has been offline since April 2011 because of several technical and mechanical issues, but it due to start back up in the first quarter of 2013.

Crystal River-3 is grappling with containment issues and repairs are not expected to begin before next summer. A restart is scheduled for sometime in 2014.

Other plants, meanwhile, are undergoing upgrades to boost capacity, such as Florida's Turkey Point-4 and St. Lucie-2.

From a year-on-year perspective, the analysts said, about 4,400 MW of nuclear capacity -- about 4.2% of the US' entire nuclear capability -- has been idled this year and have unknown restart dates.

In most cases, prolonged nuclear outages have provided tremendous support for gas prices.

When the two San Onofre nuclear units in California were shut in January due to a degradation of tubes in the steam generators, gas-fired generation in the state jumped nearly 50% in the first seven months of 2012, the analysts noted

They added: "The outage has significantly affected the regional gas market, with natural gas becoming the marginal fuel for power generation in off-peak hours."

Spot gas prices at West Coast city-gates markets --- specifically Southern California Gas city-gates and Pacific Gas & Electric's city-gate --- were boosted by the outage, often coming in as the highest-priced markets in North America this past shoulder season, according to Platts data.

Hurricane Sandy had a similar effect on the East Coast. The analysts said either ahead of the storm, or because of damage from it, three nuclear facilities were shut, while operating rates were reduced at three others, affecting a total of 4,490 MW of nuclear generation capacity.

In the spot market, these outages exacerbated an already tight supply-demand situation and boosted New England city-gate spot markets to some of their highest levels of the year at over $8/MMBtu and helped to give rise to $3/MMBtu price increases in intraday trading, according to Platts data.

Looking forward, however, a light spring maintenance season compared with 2012's is on tap.

Barclays analysis suggests nuclear generation in March, April and May 2013 should run 6,500 MW, 4,700 MW and 9.300 MW, respectively, higher than in 2012. If replacing just gas-fired output, this would mean a fall in gas burn by power generators of around 1.2 Bcf/d, 800,000 Mcf/d and 1.7 Bcf/d, in those three months, respectively, compared with the same time this year.

Of the 35,750 MW scheduled for plant turnaround next spring, Barclays said about 13,700 MW will affect the Northeast, 7,700 MW will be in the West and 6,000 will be in the Southeast.

--Samantha Santa Maria, samantha_santa_maria@platts.com

--Edited by Keiron Greenhalgh, keiron_greenhalgh@platts.com

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