Transportation

Hydrogen has a well-established, if limited, role in the modern economy. It has been used in refining and ammonia production for decades, but its potential has long been touted in various areas, including decarbonizing hard-to-abate industrial processes such as steelmaking, as well as in larger roles in heavy-duty transportation and energy storage. The last few years have seen a significant push to expand hydrogen’s role — an attempt to capitalize on its versatility and lack of carbon dioxide (CO2) emissions —  but a number of formidable obstacles to wider adoption remain, including price, availability and infrastructure, in addition to its tenuous political support. In today’s RBN blog, we look at the challenges that make forecasting the industry’s growth difficult and the emerging consensus around the most practical end uses for hydrogen. 

New U.S. LNG export projects battling rising labor and equipment costs and/or financing woes have one more thing to worry about that the first wave of projects didn’t: ensuring the feedgas supply will be there when they need it. Bottlenecks have already developed for moving natural gas volumes to the Louisiana coast, where the bulk of future export capacity will be sited. As more liquefaction capacity is built out and more export projects are greenlighted, a lot more pipeline capacity will be needed to move feedgas supply from the Haynesville and other supply basins into southern Louisiana and across the last mile to the terminals. In today’s RBN blog, we conclude our roundup of pipeline expansions in the Bayou State that would help ease transportation constraints and balance the market, this time with a look at announced-but-yet-to-be sanctioned greenfield pipeline expansions, along with an update on their associated export projects.

The U.S. won’t add new LNG export capacity this year for the first time since it became an exporter in 2016. But that lull is not going to last long. At least five facilities are under construction and due for completion in the next few years, several other expansions were recently sanctioned, and there are more final investment decisions (FIDs) on the way. With export development expected to accelerate in the coming years, the race to debottleneck feedgas pipeline routes is on. More natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of new liquefaction will be sited. In today’s RBN blog, we resume our series on the pipeline expansions targeting LNG export demand, this time highlighting TC Energy’s Gillis Access Project and how it fits into the Louisiana LNG market picture.

Hardly a day goes by without news related to U.S. LNG export capacity expansions, whether it’s upstream supply deals, offtake agreements or liquefaction capacity announcements. One project is nearing commercialization, another five are under construction and due for completion in the next few years, still others are fully or almost-fully subscribed and will be officially sanctioned any day now, and the announcements keep coming. Just days ago, Venture Global reached a final investment decision (FID) for the second phase of its Plaquemines LNG project. With export development accelerating in the coming years, more natural gas pipeline capacity will be needed, particularly for moving gas supply to the Louisiana coast, where the bulk of the new capacity will be sited. In today’s RBN blog, we continue our series highlighting the pipeline expansions targeting LNG export demand, this time focusing on projects moving gas to southeastern Louisiana, including those designed to deliver feedgas to Venture Global’s under-construction Plaquemines LNG project.

As U.S. LNG export project development accelerates in the coming years, a lot more natural gas pipeline capacity will be needed to supply the numerous liquefaction facilities vying for a piece of the global gas market pie. That’s particularly true for a small stretch of the Gulf Coast from the Sabine River on the Texas-Louisiana border to the Calcasieu Pass Ship Channel — where the bulk of planned export capacity additions are concentrated — even as transportation bottlenecks are emerging for getting natural gas supply to the area. To address the growing demand, a number of pipeline expansions are planned or proposed to bring more supply into the region or deliver feedgas across the “last mile” to these multibillion-dollar facilities. In today’s RBN blog, we continue our series highlighting some of these LNG-related pipeline projects, this time focusing on ones aiming to feed exports out of southwestern Louisiana.

LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years. After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year. Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market. The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, we begin a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast.

Just downstream from the Appalachian supply basin — where daily spot natural gas prices are among the lowest in the country — cash and forward prices in the Mid-Atlantic and Southeast have rocketed, becoming the highest gas prices in the land, and in some cases are at never-before-seen levels for this time of year. No doubt it’s been a sweltering summer so far, and low storage levels aren’t helping either. But there’s more to the price premiums than that. Limited access to supply and constraints on Williams’ Transco Pipeline — the primary system delivering gas to the region — have created a demand “island” there just as persistent heatwaves boosted cooling demand. Moreover, without additional pipeline capacity, the dynamics unfolding this summer could become a regular feature of the Southeast/Mid-Atlantic markets. In today’s RBN blog, we break down the factors driving regional prices to new heights.

The U.S. West Coast natural gas market is at the forefront of the energy transition, but regional natural gas prices are instead signaling the need for construction of newbuild gas pipeline capacity to the region. Without it, markets west of the Permian Basin have been hard-pressed to take advantage of the supply growth in West Texas and have struggled to consistently maintain adequate natural gas supplies for some time now. To make matters worse, last month, a segment of El Paso Natural Gas Pipeline (EPNG), a primary artery for moving Permian gas west, experienced a rupture, further tightening supplies. Today, we highlight the major market impacts and longer-term implications of the pipeline blast and subsequent flow restrictions.

After idling near the 4.6-Bcf/d level for months, piped gas flows to Mexico raced to a record of more than 5 Bcf/d for the first time earlier in July, and have hung on to that level since. This new export volume signifies incremental demand for the U.S. gas market at a time when the domestic storage inventory is already approaching the five-year low. At the same time, it would also signify some much-needed relief for Permian producers hoping to avert disastrous takeaway constraints — that is, if the export growth is happening where it’s needed the most, from West Texas. However, that’s not exactly the case. What’s behind the sudden increase, where is it happening and what are the prospects for continued growth near-term? Today, we analyze the recent trends in exports to Mexico.

Crude oil pipelines out of Cushing are filling up. With U.S. crude production approaching the 11 MMb/d mark, more and more production from the Rockies, Midcontinent and Permian is funneling into the Cushing, OK, trading hub. It’s getting increasingly difficult to get all of that volume to the major demand center at the Gulf Coast. The two major pipelines out of Cushing — Seaway and Marketlink — are near full capacity and differentials are responding as West Texas Intermediate (WTI) at Cushing is now trading at a $7.60/bbl discount to Magellan East Houston (MEH) at the Gulf. Today, we look at some of the major factors affecting the WTI-MEH spread, space on major pipelines between the two points, and potential implications going forward.