When it comes to Texas natural gas markets, the Permian tends to steal the show. With its roughly 2 Bcf/d of annual production growth, constrained pipelines and absurdly cheap — sometimes even negative — pricing, it’s hard for the other gas hubs in the Lone Star State to garner much attention. However, the myopic focus on West Texas overlooks a noteworthy gas market shake-up taking place on the Texas Gulf Coast, where most of the Permian’s incremental gas production is headed and where multiple new liquefied natural gas facilities are coming online to move the new supplies into world markets. Also, new export pipelines are moving increasing volumes south of the border to Mexico. Today, we provide an update on the latest in Texas Gulf Coast gas infrastructure changes and their potential impacts on the region’s supply and demand balance.
Last summer, we wrote a two-part blog series called “Get Ready” in which we discussed the changes coming to the Gulf Coast gas market. In Part 1, we laid out the general flow patterns within Texas, with a particular focus on how natural gas makes its way from other regions, such as the Permian and East Texas, to hubs along the water, primarily the Houston Ship Channel (HSC) and South Texas regional hubs. At the time, prices at HSC had shifted to a discount versus the benchmark Henry Hub, after spending much of 2018 at a premium, and in Part 2, we pulled apart some of the drivers of the HSC price shift: namely a pipeline reversal on the Gulf South Pipeline that resulted in incremental supply showing up at the hub before the start-up of the Freeport liquefied natural gas (LNG) export facility.
The NATGAS Appalachia weekly report provides the data and insights to monitor the northeast natural gas market’s twists and turns and identify the risks and opportunities along the way, including tracking supply-demand trends, outbound capacity and their impact on takeaway pipeline utilization, and regional prices.
A lot has happened since then. By the end of summer 2019, Freeport LNG had significantly ramped up its commissioning activities — and with that, its feedgas intake for liquefaction and export. More recently, the facility brought its Train 1 into commercial service a few weeks ago. That event was quickly followed by the commercial start of Train 2 just a few days ago, and gas flows to the export facility have surged in the days hence. While LNG exports at Freeport are standalone bullish for HSC prices, new Permian supply into the coastal markets of Texas has more than met that rising demand and kept prices under pressure.
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About the song
"The Shift" was written by Brian Wilson and Mike Love, and appears as the sixth track on side two of The Beach Boys' debut album, Surfin' Safari. The lyrics describe a woman's dress style where the dress falls straight from the shoulder, making it easier to move and dance in. The shift dress was first made popular during the flapper movement of the roaring ‘20s. It was revived again in the early ‘60s, mainly due to Audrey Hepburn's black shift dress in the 1961 hit movie, Breakfast at Tiffany's.
The Surfin' Safari album was recorded between October 1961 and September 1962 at Capitol Studios and Hite Morgan Studios in Los Angeles. The album was produced by Nick Venet and released in October 1962. It went to #32 on the Billboard Top 200 Albums chart. Three singles were released from the album, all charting on the Billboard Hot 100 Singles chart, with the song, "Surfin' Safari" reaching the highest spot at #14. The iconic album cover photo — shot at Paradise Cove, north of Malibu, by photographer Ken Veeder — features The Beach Boys with a surfboard on a yellow Model A Ford pickup truck dressed up with palm fronds. Personnel on the record were: Brian Wilson (lead and harmony vocals, bass, organ), Mike Love (lead and harmony vocals), Carl Wilson (lead and harmony vocals, lead and acoustic guitar), Dennis Wilson (lead and harmony vocals, drums), Al Jardine (harmony vocals) and David Marks (lead and harmony vocals, rhythm guitar).
The Beach Boys are an American rock band formed in Hawthorne, CA, in 1961. They have released 30 studio albums, eight live albums, 55 compilation albums, 22 EPs and 71 singles. They have won four Grammy Awards and have a star on the Hollywood Walk of Fame. California Landmark Number 1041 is at the spot outside of the Century Freeway (Interstate 105), where the Beach Boys' family home once stood in Hawthorne. Dennis Wilson passed away in 1983, and Carl Wilson in 1998. Brian Wilson continues to record and tour as a solo artist. The Beach Boys, with original member Mike Love and supporting musicians, will be on tour across America beginning in February of this year.
