Trunkline

Natural gas deliveries for export via Cheniere Energy’s Sabine Pass LNG terminal in Louisiana reached a record in late July, topping 2.5 Bcf/d. In the first seven months of 2017, exports have added an average of 1.5 Bcf/d — or more than 300 Bcf total — of baseload gas demand year on year. Thus far, the terminal has been operating with three liquefaction trains. Now the fourth train, which would bring on another 650-MMcf/d of potential export demand, is nearing completion. The incremental gas deliveries are scheduled to come just as winter heating season is kicking off and likely will tighten the gas market. Today, we look at the latest developments at the terminal.

Northeast producers are about to get a new path to target LNG export demand at Cheniere Energy’s Sabine Pass LNG terminal. Cheniere in late December received federal approval to commission its new Sabine Pass lateral—the 2.1-Bcf/d East Meter Pipeline. Also in late December, Williams indicated in a regulatory filing that it anticipates a February 1, 2017 in-service date for its 1.2-Bcf/d Gulf Trace Expansion Project, which will reverse southern portions of the Transcontinental Gas Pipe Line to send Northeast supply south to the export facility via the East Meter pipe. Today we provide an update on current and upcoming pipelines supplying exports from Sabine Pass.

Demand for U.S. natural gas exports via Texas is set to increase by close to 6 Bcf/d over the next few years.  At the same time, Texas production has declined more than 3.0 Bcf/d (16%) to less than 17 Bcf/d in the first half of November from a peak of over 20 Bcf/d in December 2014, and any upside from current levels is likely to be far outpaced by that export demand growth. Much of the supply for export demand from Texas will need to come from outside the state, the most likely source being the only still-growing supply regions—the Marcellus/Utica shales in the U.S. Northeast. Perryville Hub in northeastern Louisiana will be a key waystation for southbound flows from the Marcellus/Utica to target these export markets along the Louisiana and Texas Gulf Coast, particularly given the hub’s connectivity and prime location. Today, we look at the pipeline expansion projects into Perryville that will make this flow reversal possible.

After years of debate and speculation regarding prospects for U.S. exports of liquefied natural gas (LNG), the first cargo left the Gulf Coast around 8:30 pm EST Wednesday (February 24, 2016) from Cheniere’s Sabine Pass terminal, according to Genscape’s global LNG cargo monitoring service. The vessel carrying a little more than 3.0 Bcf of LNG is reportedly bound for Petrobras in Brazil. The incremental export demand that this LNG cargo and others like it to follow represent, is potentially good news for U.S. gas producers, with benchmark futures prices at Henry Hub, LA closing yesterday (February 25, 2016) near record seasonal lows at $1.711/MMBtu in the face of mild winter demand, record production and brimming storage levels. Today we look at how this first cargo was supplied and what that tells us about current and future impact to flows and regional prices.

The acquisition of Williams Companies by Energy Transfer will create a midstream behemoth. The deal is expected to close during the first half of 2016 subject to regulatory approval. Once complete the main holding company Energy Transfer Corp (ETC) will be a C-Corp entity sitting atop Master Limited Partnerships (MLPs – see Masters of the Midstream for a more complete explanation of these structures) containing the assets of Energy Transfer Partners (ETP), Williams Energy Partners (WPZ), Sunoco LP (SUN) and Sunoco Logistics (SXL). The combined natural gas pipeline network will carry as much as 45% of U.S. Lower 48 dry gas production. Today we take a look at the natural gas infrastructure assets in the deal.

The latest Energy Information Administration (EIA) April 2013 short term energy outlook forecasts US crude oil production to increase from an average of 6.5 MMb/d in 2012 to 7.9 MMb/d in 2014. Surging crude production needs to find routes to market – and often competes for pipeline space with growing Canadian imports. New crude pipelines are taking too long to build. At the same time many natural gas pipelines are flowing far beneath capacity because new gas production nearer to market makes them redundant. Converting these natural gas pipelines to crude oil use where geography allows is a potential win-win. Today we look at gas to crude pipeline conversion economics.