In this issue

 

Mexico and South Korea each received four cargoes and China took delivery of two as a total of 16 shipments were delivered from the Sabine Pass plant in Louisiana at lower average prices compared with 15 loaded in the previous month, according to the latest data released by the Department of Energy (DoE).

Tellurian Inc., developer of the Driftwood LNG project on the Gulf Coast of Louisiana, said it had agreed to acquire acreage in Haynesville Shale play in the northwest of the state to add potential gas assets to its portfolio for future export. 

Monday, 02 October 2017

Drilling activity and production of crude oil and natural gas is picking up in Oklahoma’s Anadarko Region, notably in two areas commonly known as the STACK (Sooner Trend Anadarko Canadian and Kingfisher) and the SCOOP (South Central Oklahoma Oil Province) plays. 

Despite the havoc causes by recent hurricanes along the Gulf Coast of Texas and Louisiana, US dry gas production is set to rise to an average of 73.7 billion cubic feet per day in 2017. This year’s output is a 1.4 Bcf/d increase from the 2016 level, and the EIA says 2018 output is also likely to surge. 

Only after 2030, pipeline gas and LNG is seen regain market share in Europe, displacing nuclear power and lignite coal. Before that time, strong renewable energy expansion is forecast to eradicate the growth of gas use in the power sector, according to the EIA’s just-released International Energy Outlook 2017 (IEO2017). 

As Brexit unfolds, the premium on Britain’s National Balancing Point (NBP) and the price volatility in relation with the Dutch Title Transfer Facility (TTF) is likely to play into the hands of LNG sellers and trading houses who are seeking to take advantage of the widening NBP-TTF spread.

Having moved to a competitive market, Mexico’s Energy Regulatory Commission (CRE) released its first monthly price report in late August which shows that Mexican marketers sold gas at $4.10/mmBtu on average in July. CENAGAS, Mexico’s pipeline system operator also launched its natural gas capacity reservation system with electronic bulletin boards for posting natural gas flows. 

The US Federal Energy Regulatory Commission (FERC) has granted a permit to Delfin LNG – the most advanced US floating export development – that will allow developers to transport gas to its proposed deepwater port terminal to be located 30 miles offshore Louisiana in the Gulf of Mexico. 

Edison, capacity holder in the Adriatic LNG import terminal, has signed an agreement to receive 1 mtpa of shipments from Calcasieu Pass liquefaction and export plant, developed Venture Global.

The Atlantic LNG production plant at Point Fortin, Trinidad, has been shut and evacuated after a fire flared up at one of its power generating units. The company said it contained and extinguished the fire, with no injuries reported.

Although global markets are awash with Although global markets are awash with new LNG supply from Australia and the United States, key buyers in India have been courting the incumbent seller Qatar to invest in stranded gas-fired power station as a precondition for new long-term LNG purchase agreements. Reliance Industries, India’s most price-sensitive buyer, is scanning spot markets for US LNG cargoes.

The re-balancing of global oil markets is viewed by the IEA as “a stubborn process” given that some producers, party to the OPEC’s output cut agreement, are "showing signs of weakening their resolve." The compliance rate fell again in July to a new low of 75% from June’s 77%. Still, IEA analysts believe “the market is re-balancing” as the price of Brent crude recently stabilised above $50/bbl.

Excess growth in global LNG supply, notably through the ramp-up of US LNG through 2018 and into 2019, will make European gas prices “move through the coal floor [price]”. Fuel-switching in the Western European power market, according to Societe Generale, will ultimately be determined by short-term gas prices hinging at the variable cost of shipping a US LNG cargo to Europe.

Demand from the industrial sector becomes the main engine of gas consumption growth, replacing power generation, where gas is being squeezed by growing renewables and competition from coal, the International Energy Agency (IEA) says in its latest five-year forecast Gas 2017. Global gas demand is forecast to rise from 3,630 bcm today to nearly 4,000 billion cubic meters (bcm) by 2022.

News Nudges

Commissioning cargo departs from Corpus Christi Train-1

The first commissioning cargo has loaded and departed from Train-1 at Cheniere Energy’s Corpus Christi LNG export terminal in Texas. The LNG was loaded onto the 174,000 cubic metres capacity carrier “Maria Energy”, charted by Houston, Cheniere’s marketing unit. Start-up of Train-1 marks the first export of LNG from the state and from a greenfield liquefaction facility in the lower 48 states. All three Corpus Christi trains combined will produce up to 13.5 mtpa. The first two Trains are fully contracted and Train 3 is mostly contracted. Any excess capacity will be available for Cheniere Marketing to sell. Corpus Christi is being constructed at a cost of $15 billion.