What is Tetco M3?

curl -H "Authorization: Token YOUR_KEY" \
  "https://api.oilpriceapi.com/v1/prices/past_year?by_code=NATURAL_GAS_TETCO_M3_USD&interval=daily"

Where is Tetco M3?

"Tetco" is Texas Eastern Transmission, and M3 is one of its market zones. EIA lists TETCO-M3 as the hub representing the Mid-Atlantic region and places M-3 Delivery in the eastern Pennsylvania, New Jersey and New York area. That puts it in the same corridor as Transco Zone 6 NY, served by a different pipeline.

What is the Texas Eastern pipeline?

Texas Eastern runs 1,700 miles from producing fields on the Texas and Louisiana Gulf Coast to Ohio, Pennsylvania, New Jersey and New York, with a design capacity of 6 Bcf/d and 75 Bcf of working storage (Morningstar DBRS). It is part of Enbridge's gas transmission business.

The line was built to carry Gulf gas north. Since the Marcellus and Utica shales came on, it also carries Appalachian gas south: before a May 2020 explosion on Line 10 near Owingsville, Kentucky, Texas Eastern was sending an average of 1.3 Bcf/d from the Appalachia region to Gulf Coast markets (EIA). That two-way role is what makes M3 behave differently from the New England hubs.

What sets the price?

M3 is Henry Hub plus a local basis, and the basis depends on which way the pressure runs. When Appalachian output has plenty of room to leave the region, M3 is priced against the markets that gas can reach. When the outlets shrink, gas backs up into the Northeast and M3 falls relative to Henry Hub. In cold weather the direction reverses: Mid-Atlantic heating load competes for the same pipe, and M3 rises above Henry Hub.

What happened in May 2020?

On 4 May 2020 Enbridge reported an explosion on Line 10, a 30-inch segment of the Texas Eastern system near the Owingsville compressor station, 50 miles east of Lexington, Kentucky. EIA expected flow restrictions to last at least two to three more weeks. Gas that had been leaving Appalachia on Texas Eastern was rerouted, and flows out of the Appalachia region on other routes rose by 0.9 Bcf/d over the period (EIA Natural Gas Weekly Update, May 2020). The episode set up the pressure limits that moved M3 a year later.

A worked example: June 2021

After the 2020 explosion, the Pipeline and Hazardous Materials Safety Administration (PHMSA) restricted operating pressure on parts of the Texas Eastern system. By December 2020 PHMSA had let Texas Eastern return Lines 10, 15 and 25 to full pressure, on condition that it reapply every 90 days (EIA).

PHMSA then denied the next waiver request. Pressure was reduced from 1 June 2021, cutting southbound capacity out of Appalachia by 39%, from 1.8 to 1.1 Bcf/d. With less room to send gas south, the basis between Henry Hub and Texas Eastern M-3 Delivery went from −50 cents/MMBtu on 28 May to −$1.09/MMBtu on 15 June (EIA Natural Gas Weekly Update). Nothing changed in Mid-Atlantic demand; the discount came from a pipeline hundreds of miles away.

And in winter?

Cold weather pulls M3 the other way. In the week ending 15 March 2017, with colder-than-normal temperatures and a late-season snowstorm forecast for the Northeast, Texas Eastern M-3 rose more than 75% from Monday to close at $4.04/MMBtu on Friday 10 March. Henry Hub rose from $2.69 to $3.00 over the same report week, a 31-cent move against more than $1.70 at M3 (EIA).

How is M3 traded?

Daily trades set the spot price, and monthly exposure is hedged with exchange contracts. ICE's TETCO M3 Index Future, for example, settles on the average of the daily Gas Daily prices for M3 in the month minus the Inside FERC monthly bidweek price, in lots of 2,500 MMBtu (ICE). That contract isolates the gap between the price fixed before the month and what the days of the month actually delivered, which is the risk a Mid-Atlantic buyer on a monthly index carries. The basis spreads guide covers the Henry Hub leg.

What to watch

• Texas Eastern operating limits. Pressure restrictions and outages on the southbound lines move M3 directly, as June 2021 showed.
• Appalachian output. More supply in the region with the same outlet capacity widens the discount. Compare M3 with Eastern Gas South, the producer-side Appalachian price.
• Northeast weather. Cold snaps turn the discount into a premium, as in March 2017.
• National storage. M3 is quoted as Henry Hub plus basis, so the storage balance sets the level the basis is added to.

Using the data

NATURAL_GAS_TETCO_M3_USD returns the Tetco M3 daily spot price in $/MMBtu, one value per trading day. Pair it with NATURAL_GAS_USD (Henry Hub) on shared dates to compute basis; match on date, because Henry Hub rows can include days M3 does not trade. The other regional hubs are compared on the natural gas hubs page.