With their scale and 130-gigawatt pipeline of new large-load customers, the planned combination of electric utility and wholesale power giants NextEra Energy and Dominion may substantially accelerate the buildout of new gas-fired power plants and, with that, the need for more pipeline capacity.
The growing number of energy-intensive data centers coming online across the U.S. is spurring utilities to ramp up their plans for adding new sources of power generation — including a slew of gas-fired plants — and also complicating their efforts to rely more on renewable resources and decarbonize the power grid. The push to quickly develop new energy infrastructure is also running into well-documented issues with permitting such projects. In today’s RBN blog, we discuss the proliferation of massive data centers — many of them catering to the surge in interest in artificial intelligence (AI) — and what that means for utilities and power-related demand for natural gas.
Feedgas demand for U.S. LNG exports has accelerated in recent months with the addition of new liquefaction and upstream pipeline capacity. The latest export facility contributing to the winter surge in feedgas flows is Cheniere Energy’s Corpus Christi LNG (CCL) in South Texas — the first greenfield LNG export terminal in the Lower 48 and the first such terminal, greenfield or otherwise, in Texas. Train 1 has yet to be commercialized, but already it’s added 0.5 Bcf/d of gas demand to the Texas market through December. The facility sources its gas via a number of legacy interstate and Texas intrastate pipelines, many of which have undergone reversals and expansions in order to serve LNG terminals but also another competing export market: Mexico. How will CCL change gas flows in South Texas? Today, we provide an update of feedgas flows to Corpus Christi, including a closer look at the upstream pipeline routes facilitating those flows.
After somewhat of a lull in U.S. LNG export growth through much of 2018, demand for feedgas has revved up this fall. Total feedgas deliveries to U.S. LNG export terminals topped 5 Bcf/d for the first time this past weekend, thereby also surpassing exports to Mexico for the first time. All five commercialized liquefaction trains — four at Cheniere Energy’s Sabine Pass and one at Dominion’s Cove Point LNG — are operating at or near full capacity for the first time. Simultaneously, commissioning activity is under way now for four new liquefaction trains, including the initial trains at two new export terminals. This steady gas demand is underpinned by gas pipeline expansions designed to provide more direct and economical connectivity between U.S. producing regions and the export terminals. Today, we continue our blog series looking at feedgas pipeline projects and their effect on feedgas flows, this time with a focus on Dominion’s Cove Point LNG.
With recent project completions, Northeast takeaway constraints have eased, and regional supply prices have strengthened. But now the slate of planned pipeline expansions is dwindling. Between late-2015 and the end of 2018, midstreamers will have completed 23 takeaway projects out of Appalachia, totaling nearly 14.5 Bcf/d of capacity. That leaves just a handful of projects with little more than 6 Bcf/d of capacity to come, most of them facing stiff environmental opposition, regulatory turmoil and higher costs. Yet, as Appalachian gas production continues to grow, these projects will be critical to keeping the takeaway constraints and depressing supply pricing from returning, at least for a little longer. More than half of the remaining capacity would come from two competing projects — Dominion Energy’s Atlantic Coast Pipeline (ACP) and EQM Midstream Partners’ Mountain Valley Pipeline (MVP) — both greenfield efforts tied to growing gas-fired power generation demand along the Mid- and South-Atlantic seaboard and both embattled by a barrage of legal challenges. In today’s blog, we provide an update on the Atlantic Coast and Mountain Valley projects, including the latest status and timing.
For the first time in years, natural gas takeaway capacity constraints from the Marcellus/Utica producing region appear to be easing, even as production volumes from the area continue to record new highs. That’s allowed regional supply prices this year to strengthen dramatically relative to national benchmark Henry Hub. A closer look at pipeline flow data indicates these developments stem from shifting gas flows that coincide with the ramp-up of Energy Transfer Partners’ Rover Pipeline. In today’s blog, we continue our update of the Northeast gas market with the latest on Rover’s gas receipts, along with its effects on other regional takeaway capacity and price relationships.
Everyone in the North American gas industry knows that a big wave of U.S. LNG exports is coming. Although Cheniere Energy’s Sabine Pass terminal in southwestern Louisiana started shipping out LNG in 2016, exports really started having a major impact in 2017 — increasing demand for U.S.-produced gas, providing an outlet for Marcellus and Utica supplies, and affecting physical flows at the Henry Hub and in south Louisiana more generally. But with the first four liquefaction trains at Sabine Pass all but fully ramped up, attention in recent months has been turning to the next facility being commissioned: Dominion’s Cove Point terminal on Chesapeake Bay in Maryland, which exported its first cargo in early March. But tracking gas pipeline flows into the Cove Point plant has not been easy, and in today’s blog, we consider the various possibilities and discuss our view of how best to monitor the amount of LNG feedgas going into Cove Point.
The contiguous U.S. natural gas market is on its way to having its second major LNG export terminal and a new source of demand in the Northeast region by the end of the year. Dominion’s Cove Point liquefaction project, located on the Chesapeake Bay in Calvert County, Maryland, last month received approval from the Federal Energy Regulatory Commission (FERC) to introduce fuel gas, signaling the start of commissioning activities, a precursor to start-up activities for the liquefaction train itself. Dominion also last November applied for permission from the Department of Energy to export up to 250 Bcf of LNG during pre-commercial operations starting as early as fourth-quarter 2017, and is awaiting a response. Once operational, the facility, which is located within just a few hundred miles of the Marcellus/Utica shales — will have access to one of the primary southbound pipeline corridors for Marcellus/Utica takeaway capacity and add nearly 0.8 Bcf/d of demand to the Northeast gas market. Today we provide a detailed look at the Cove Point LNG facility.
We talk a lot here in the RBN blogosphere about the bearish market effects of the Shale Revolution, and frequently highlight the U.S. Northeast natural gas region — rapidly growing gas production from the Marcellus/Utica; oversupplied, trapped-gas conditions; and resulting regional price discounts. These dynamics are driving massive investments in pipeline reversals, expansions and new capacity to move the gas to market. Northeast producers are counting on that increase in takeaway capacity to relieve price pressure and balance the market. But all this gas moving out of the region needs a home. Fortunately, new demand is emerging, from exports (to Mexico and overseas LNG) and into the U.S. power sector. One of the big growth regions is the U.S. Southeast, where power utilities are investing heavily in building out their fleet of gas-fired generation plants and are banking on this new, unfettered access to cheap Marcellus/Utica gas supply. Today’s blog provides an update on power generation projects coming up in the southern half of the Eastern Seaboard, based on a recent report by our good friends at Natural Gas Intelligence — “Southern Exposure: Gas-Fired Generators Rising in the Southeast; But Will Northeast Gas Show Up?”
<p>MarkWest Energy Partners is clearly the big dog in the Marcellus/Utica, with by far the largest gas processing and fractionation capacity there.</p>
