RBN Energy

Before the bullish winter of 2021-22, it appeared the Northeast natural gas market was headed for familiar territory: worsening seasonal takeaway constraints and deeper, constraint-driven price discounts starting as early as this spring. Instead, the market went in the other direction the past few months. Takeaway utilization out of Appalachia has been lower year-on-year and, for the most part, Appalachian supply basin prices have followed Henry Hub higher even as that benchmark rocketed to 14-year highs. That’s not to say that constraints out of the Northeast aren’t on the horizon. But the market is now poised to escape the worst of it this year, despite the completion of the last major takeaway pipeline project in the region, Mountain Valley Pipeline (MVP), being pushed out another year or longer, if it crosses the finish line at all. In today’s RBN blog, we provide an update on regional fundamentals and what recent trends mean for gas production growth and pricing in the region.

An explosion June 8 at Freeport LNG, the 15.3 MMtpa (2 Bcf/d) export terminal on Quintana Island, TX, has knocked it offline at a time when the global market is already facing tight conditions because of the war in Ukraine and other factors. The explosion, fire and subsequent shutdown — which fortunately did not include any injuries — sent U.S. natural gas tumbling off recent highs and shot global gas prices higher. Much is still unknown about the developing situation, including exactly how long the outage will last. While Freeport has said it expects the terminal to be offline for at least three weeks, multiple regulatory agencies have investigations underway and will likely need to approve a return to service. In today’s RBN blog, we look at the latest news from Freeport LNG and run through the potential market implications, starting with impacts to the U.S. gas market.

The momentum for North American LNG right now is incredible. With Europe’s efforts to wean itself off Russian natural gas supplies boosting long-term LNG demand in the continent and Asian demand expected to grow even further, there has been a strong push for new LNG projects in the U.S., Mexico and Canada, with enough commercial support and capital present to advance at least some of them to construction and operation. Venture Global on May 25 reached a final investment decision on Phase 1 of Plaquemines LNG, the first North American project to take FID since Energía Costa Azul LNG in 2020. But it’s unlikely to be the last. Cheniere’s Corpus Christi Stage III is likely to follow in the coming months and support is coalescing around a handful of other projects too. So far this year, more than 20 MMtpa of long-term, binding commitments tied to new North American LNG capacity have been signed, propelling a new wave of LNG projects towards FID. In today’s RBN blog, we take a look at the trends in the recent commercial commitments.

Just like there’s room for Amazon and Etsy in the e-commerce world — one for mass marketers and the other for artisans — there’s room in the energy industry for both large- and small-scale LNG companies and plants. By focusing on the development of niche markets and scaling their production and distribution operations accordingly, a number of smaller (but growing) players in the LNG space have been making natural gas available to a surprising variety of customers: from industrial, oil-and-gas and mining companies to rocket launchers, Caribbean resorts and island utilities. ESG is a big driver — the LNG supplied often replaces diesel, fuel oil and propane, which can have bigger carbon impacts. In today’s RBN blog, we continue our series on small-scale LNG with a look at a cross-section of key players in this space and how they’ve been growing their businesses.