SPA

Strategic Petroleum Reserve (SPR) inventories have been climbing over the past year as the Department of Energy (DOE) advances plans to replenish it following the record 180-MMbbl drawdown after Russia’s invasion of Ukraine in 2022. But DOE officials have said its refilling efforts are complicated by upgrades at three of the four SPR storage sites. In today’s RBN blog, we look at the scope of these “life-extension” projects, the completion timetable, and how it might drag out restocking efforts. 

It has been an epic year for U.S. LNG. After COVID-19 and the subsequent global market crash brought LNG development to a standstill and shut-in production from existing terminals in 2020, this year has seen global prices repeatedly smash previous record highs, driving existing terminals to operate at peak levels and renewing interest in new LNG buildout. U.S. feedgas demand and LNG production will close out the year at all-time highs, but with just a few weeks left it looks like 2021 will be the first year since 2017 that no new LNG terminals will achieve a positive final investment decision. But that’s driven more by the tailwinds of 2020 — the back half of 2021 has seen a tremendous amount of commercial activity in the LNG sector. More than 21 million metric tons per annum of medium- and long-term capacity from planned LNG projects has been sold this year, creating enough forward momentum for multiple projects to move toward FID in 2022. We cover all the latest developments in our LNG Voyager Quarterly report, and in today’s RBN blog we take a look at some of the recent LNG deals and what they tell us about the future of North American LNG.

Since the first LNG ship left its dock in February, Cheniere’s Sabine Pass LNG terminal has exported 17 cargoes containing the super-cooled, liquefied equivalent of over 50 Bcf of natural gas from the first of six planned liquefaction “trains.” And in a monthly progress report filed with the Federal Energy Regulatory Commission last month, Sabine Pass said it expected to begin loading a commissioning cargo from Train 2 in August, with commercial operation of that facility starting as early as September. In today’s blog we provide an update of Sabine Pass’s export activity, as well as the impact on the U.S. gas flows and demand.

The first U.S. liquefied natural gas (LNG) export cargo from the Lower 48 is now likely within just a week or two of shipping from the Cheniere Sabine Pass, LA terminal. In the meantime, physical flow data is already giving us a first glance at how the terminal will be supplied from U.S. natural gas production. In today’s blog, we begin a look at flows to the terminal, how the gas is getting there and where it’s coming from.

How the international market for liquefied natural gas (LNG) expands and evolves is of critical importance to U.S. and Canadian natural gas producers and midstream companies alike. The success of North American-sourced gas in penetrating LNG demand centers--Asia and Europe in particular—will help determine not only how much gas needs to be produced, but how much incremental pipeline and liquefaction/LNG export capacity needs to be developed, and how much upward pressure there will be on U.S. and Canadian natural gas prices. There is a lot of uncertainty about how things will shake out. Today, we conclude our series with an assessment of what we know, what we aren’t sure about, and what we think we’re likely to see happen.

Canada’s National Energy Board (NEB) already has approved export licenses for nine LNG export projects in British Columbia that, if all built, would demand a total of up to 16 Bcf/d of Western Canada natural gas. Several other LNG export projects also are under development in BC. In reality, though, at most only a handful of all these projects will be financed and constructed. The BC government’s optimistic estimate is that five liquefaction “trains” with a combined gas throughput of 3.5 Bcf/d (to produce up to 25 million metric tons/year of LNG) will be online by 2023. The questions then are, what will it take for a project to advance, and which developers are making the most headway so far. Today, in the second of our Slip Sliding Away series, we start to assess BC’s top LNG export contenders, including a few late-arriving long shots that could surprise.