May 30, 2018 – Natural Gas Intelligence
Triple-Digit Build Expected as Natural Gas Futures Continue Slide; Spot Prices Mixed
By: Jeremiah Shelor
After Tuesday’s sell-off, natural gas futures slid further Wednesday ahead of a weekly government storage report expected to show a triple-digit storage injection, though more supportive afternoon weather guidance offered some hope for the bulls…
Read the full article here: http://www.naturalgasintel.com/articles/114552-triple-digit-build-expected-as-natural-gas-futures-continue-slide-spot-prices-mixed
…As supply growth from the Permian Basin has driven steep discounts on Waha spot prices, “incremental demand -- from exports to Mexico for gas-fired power generation as well as for power demand in Texas -- has provided some relief for West Texas prices in recent weeks,” RBN Energy LLC analyst Sheetal Nasta said earlier this week. “But Texas power demand is seasonal and, while Waha’s exports to Mexico are expected to continue growing, it’s likely to be on a piecemeal basis.”
New takeaway will be needed to balance the Permian market longer term, Nasta said, and a number of new projects are in development.
“Nearly 4.0 Bcf/d of new pipeline capacity has been proposed to target the Agua Dulce/Corpus Christi area in South Texas,” with another roughly 4.2 Bcf/d planned to head to the Houston Ship Channel/Katy area and 2.0 Bcf/d proposed for takeaway to Gillis, LA, according to Nasta.
“...Based on these projects, we know that much of the incremental Permian supply growth over the next five years will head east to the Texas and Louisiana Gulf Coast. But which pipes get built will determine where along the coast all that gas will end up -- South Texas, Louisiana or somewhere in between,” she said. “And that, along with the timing of” liquefied natural gas “export demand, will drive downstream prices at Agua Dulce, Houston Ship Channel and Henry Hub.”
