Cheniere

Tuesday, 10/24/2017

Energy Transfer Partners Rover Pipeline’s Mainline A first began flowing natural gas west from the Marcellus/Utica on September 1, and volumes are now averaging about 1.0 Bcf/d. The bulk of that is being delivered into TransCanada’s ANR Pipeline and, pipeline flow data shows some of that, either directly or indirectly, is making it all the way south to the Gulf Coast, specifically toward Cheniere Energy’s Sabine Pass LNG liquefaction and export facility (SPL). Deliveries to the facility have climbed to nearly 3.0 Bcf/d in recent weeks as the fourth liquefaction train was brought online. Along the way, the Rover-ANR combo is increasing competition with other pipes that feed ANR, including other Marcellus/Utica takeaway pipelines such as REX and Dominion. Today, we look at how Rover has changed flow patterns for gas targeting Gulf Coast demand.

Sunday, 10/08/2017

Cheniere Energy’s Sabine Pass LNG liquefaction and export facility in Louisiana last week received federal approval to begin operating its fourth 650-MMcf/d liquefaction train, bringing the total export capacity at the terminal to 2.6 Bcf/d. Natural gas supply delivered to the terminal for export has averaged 2.0 Bcf/d in recent months, with flows jumping as high as 2.9 Bcf/d on some days last month as the operator readied Train 4 for operations. There are several supply regions targeting this new demand, including the fastest growing producing region, the Marcellus/Utica Shale in the U.S. Northeast. While there isn’t yet a direct beeline from the Marcellus/Utica to Sabine Pass, there are early indications that recent pipeline takeaway and reversal projects from the producing region and the resulting connectivity are indirectly bridging the divide. In today’s blog, we examine pipeline flow data to understand recent changes in flows and what they can tell us about future flow patterns as export demand continues to grow.

Monday, 08/14/2017

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.

Thursday, 04/20/2017

U.S. LNG exports via Cheniere Energy’s Sabine Pass LNG export facility are poised to be a major demand driver of the domestic natural gas market in 2017. Pipeline deliveries to the terminal have more than tripled since mid-2016 and are set to climb further as more liquefaction capacity ramps up. With two liquefaction trains already operational, the Federal Energy Regulatory Commission last month approved Train 3 to begin operations and also green-lighted the start-up of Train 4 commissioning. Today, we provide an update of Sabine Pass’s export activity and its potential effect on U.S. gas demand this year.

Tuesday, 03/21/2017

Cheniere Energy last Friday announced it has signed precedent agreements (firm capacity deals) with foundation shippers for its 1.4-Bcf/d Midship Pipeline project, which is targeted for an early 2019 in-service date. The announcement marks the latest milestone for midstream companies looking to move natural gas production from the SCOOP/STACK shale plays in central Oklahoma to growing demand markets in the Southeast and along the Texas Gulf Coast. Production from SCOOP and STACK grew by 1.0 Bcf/d, or 60%, in the past three years to 2.7 Bcf/d in 2016 and is expected to grow by another 1.5 Bcf/d by 2021. Besides Midship, there are other projects vying to move SCOOP/STACK gas to market. But how much capacity is really needed and by when? Today we look at the Midship project and its role in alleviating potential takeaway constraints.

Thursday, 02/09/2017

South Texas—and its primary trading hub, Agua Dulce—is emerging as the fulcrum for U.S. natural gas producers and growing demand markets on the Texas Gulf Coast and across the border in Mexico. Between the Freeport and Corpus Christi LNG export projects and cross-border pipeline projects to Mexico, nearly 4.0 Bcf/d of export capacity is being developed in South Texas over the next few years. Meanwhile, U.S. producers as far north as the Marcellus/Utica are jockeying to capture this new demand. Large investments are being made to expand and reverse traditional pipeline flows across the Texas-Louisiana border to get gas all the way down to South Texas and the Texas-Mexico border. But will enough capacity be available when the demand shows up? Today, we break down the natural gas supply/demand picture in South Texas and what it will take to balance the market there as exports ramp up.

Tuesday, 01/10/2017

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.

Wednesday, 12/14/2016

The CME/NYMEX Henry Hub January contract settled yesterday at $3.54/MMBtu, about 30.8 cents (~10%) above where the December contract expired ($3.232) and 77.6 cents (28%) higher than where November settled ($2.764). The natural gas winter withdrawal season is officially underway—it’s a lot colder and gas demand has spiked. But this week also marks another key bullish threshold: as today’s Energy Information Administration (EIA) storage report will likely show, the U.S. natural gas inventory has fallen below the prior year’s levels for the first time in two years (since early December 2014). That’s in sharp contrast to where the inventory started the injection season in April—more than 1,000 Bcf higher compared to April 2015. Moreover, we expect the emerging deficit to grow substantially over the next several weeks. Today we look at the supply-demand fundamentals driving this shift and what it means for the winter gas market.

Wednesday, 11/30/2016

The U.S. natural gas market in the past two years has undergone massive change, from breaking storage records and crossing long-held thresholds to flipping flow patterns and pricing relationships on their heads. This November, the market crossed yet another milestone:  the U.S. became a net exporter of natural gas for the first time ever on September 1, 2016. That lasted only a few days. But net exports resumed again starting November 1 and have continued through the month, almost without interruption, with pipeline deliveries to Mexico and to the first two liquefaction “trains” at Cheniere Energy’s Sabine Pass LNG terminal exceeding imports from Canada and LNG import terminals by an average 0.6 Bcf/d. Today, we look into what’s really driving this shift and what that tells us about the trend going forward.

Thursday, 11/03/2016

A total of 13 U.S. liquefaction trains with a combined capacity of about 58 MTPA (~8 Bcf/d) are either in early stages of operation along the Gulf Coast or under construction and scheduled to be online by the end of 2019. Of that, about 3.2 Bcf/d is being developed along the Texas Gulf Coast. Beyond that, a “second wave” of liquefaction projects is lining up, with as much as an additional 11 Bcf/d of capacity proposed for Texas by the early 2020s. While many of these second-wave projects may not get built, those that do will require the construction or rejigging of hundreds of miles of pipelines, particularly along that Gulf Coast corridor. Several of the first and second wave liquefaction projects have proposed to build laterals that connect to and branch out from nearby long-haul pipelines, creating new Gulf Coast-bound delivery points for Eagle Ford shale gas as well for supply that will eventually move south from supply basins as far north as the Marcellus and Utica shales. Today, we take a closer look at these liquefaction-related pipeline projects and how they will connect to and impact the existing pipeline network.

Thursday, 07/14/2016

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.

Monday, 04/04/2016

As if the international market for liquefied natural gas weren’t complicated enough, add the facts that 1) the LNG shipped from various export terminals differs in chemical composition, and 2) the specifications for the natural gas consumed by various countries around the world differ too. In other words, you can’t assume that the heating value and other important characteristics of the super-cooled gas in the LNG shipped from exporting country A will align with the gas specs enforced in importing country B. That’s a big deal to LNG exporters and traders who would like to be able to ship their LNG to wherever it would make the most money, but who need to consider a lot more. Today, we look into the increasing significance of LNG/gas spec differences as the old rules of the LNG market break down.

Thursday, 02/25/2016

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.

Monday, 02/22/2016

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.

Wednesday, 02/17/2016

Demand for liquefied natural gas has been flat recently, but liquefaction/LNG export capacity is on the rise. The resulting supply/demand imbalance along with the crash in crude oil prices has sent LNG prices to unexpectedly low levels, and raises questions about the competitiveness of all the new Australian and U.S. projects coming online in 2016-20. Today, we continue our examination of the fast-changing international market for LNG with a look at the new capacity being added to an already saturated LNG market, and how U.S. LNG exporters might fare in a hyper-competitive world.