This year has been a mixed bag for Appalachian natural gas producers. Outright prices in the region are higher than they’ve been in a few years, thanks to lower storage inventory levels and robust LNG export demand. However, regional basis (local prices vs. Henry Hub) is weaker year-on-year as higher production volumes have led to record outbound flows from Appalachia and are threatening to overwhelm existing pipeline takeaway capacity. Last month, Equitrans Midstream officially announced that the start-up of its long-delayed Mountain Valley Pipeline (MVP) project will be pushed to summer 2022 at the earliest. Then, just last week, outbound capacity took another hit as Enbridge’s Texas Eastern Transmission (TETCO) pipeline was denied regulatory approval to continue operating at its maximum allowable pressure, effectively lowering the line’s Gulf Coast-bound capacity by nearly 0.75 Bcf/d, or ~40%, for an undefined period. Today, we consider the impact of this latest development on pipeline flows, production, and pricing.

Global gas prices are in the midst of the longest and strongest bull run since 2018 and fundamentals appear supportive of sustaining the rally through at least the upcoming winter. The higher international prices relative to Henry Hub have buoyed demand for U.S. LNG exports. Existing terminals are operating at or near full capacity, and their combined feedgas demand has been steady, averaging more than 6 Bcf/d higher than this time last year when economic cargo cancellations from COVID-19 were heading towards their summer peak. The improved economics for delivering U.S. LNG to international destinations have also renewed interest in offtake agreements for a handful of the second wave of North American LNG projects that had been sidelined because of the pandemic (many others still are). These projects are taking advantage of the less crowded market, which gives them a realistic path forward to reach a final investment decision (FID). In today’s blog, we continue the series on the status of the second wave of LNG projects.

It’s not often these days that you read about gas markets in the San Juan Basin. In fact, the subject was probably never much of a hot topic because the San Juan has been something of an afterthought when it comes to Western gas markets, just a stop on the road between the Permian and markets along the West Coast and in the Rockies. However, those Western gas markets are setting up to be quite interesting this summer, as is the Waha gas market in the Permian, and understanding the mechanics of the San Juan is just one piece of the overall Western puzzle. In today’s blog, we take a look at the far-flung but increasingly interesting markets west of the Permian Basin.

IMO 2020, the mandate that ships plying most international waters slash their sulfur emissions starting in January of last year, was only another step in the International Maritime Organization’s long-running effort to ratchet down the shipping industry’s environmental impact. The group’s next focus, as you might expect, is reducing shippers’ carbon footprint — while no specific rules have been set, the IMO in 2018 laid out the goal of cutting ships’ carbon dioxide emissions by 40% from their 2008 levels by 2030. One way to move toward that goal would be fueling more ships with LNG, which emits 20-25% less CO₂ than very low sulfur fuel oil. But as we discuss in today’s blog, shippers could augment those emission reductions by moving from the LNG trade’s traditional point-to-point model to optimization through cargo swapping.