US shale-gas flows help fill supply gaps at much lower prices as LNG and domestic needs grow
US natural gas flows out of the Appalachian shale-gas basins into the rest of the country have continued to grow and averaged more than 16 billion cubic feet per day last month and proved useful in filling supply gaps as domestic use and LNG exports increase.
US LNG exports and domestic natural gas demand fall as storage hits lowest since 2014
The US exported five LNG cargoes last week, a drop from seven shipments in the previous week, as domestic natural gas demand fell by 10 percent and inventories ended the winter heating season at their lowest level since 2014.
US says rising shale-gas output in Appalachia affects regional flows and boosts LNG feed-gas
US natural gas production in the Mid-Atlantic and Ohio region from the Marcellus and Utica shale basins is continuing to grow, resulting in adequate domestic supplies being available in the northern region and feed-gas been transported south for LNG plants on the Gulf Coast.
US LNG exports decline as domestic natural gas consumption rises 4 percent amid supply fall
US liquefied natural gas exports decreased in the past week to six shipments, four from Sabine Pass in Louisiana, one from Cove Point in Maryland and one from Corpus Christi in Texas, compared with eight the previous week, while two vessels were lifting cargoes at Sabine Pass through January 24.
LNG shipments fell as domestic natural gas demand increased over the holiday weekend and the start of the week, according to a report from the Energy Information Administration.
The average total supply of natural gas declined by 1 percent compared with the previous week and net imports from Canada dropped by 6 percent from last week as pipeline exports to Mexico rose by 1 percent.
“Total US consumption of natural gas rose by 4 percent compared with the previous week,” said the EIA.
“In the residential and commercial sectors, consumption increased by 8 percent as cold temperatures spurred heating demand,” it added.
“Natural gas consumed for power generation was flat, averaging 25.3 billion cubic feet per day,” stated the report.
Spot prices fell at most locations with the Henry Hub dropping from $3.61 per million British thermal units to $3.10 per MMBtu.
“Net withdrawals from working gas totaled 163 Bcf for the week. Working natural gas stocks are 2,370 Bcf, which is 1 percent more than the year-ago level and 11 percent lower than the five-year (2014-2018) average for this week,” said the EIA.
“Prices at the Algonquin Citygate, which serves Boston-area consumers, were volatile amid stretches of cold temperatures. Prices went down $7.85 from $11.38 per MMBtu on January 16 to $3.53/MMBtu,” added the report.
“At the Transcontinental Pipeline Zone 6 trading point for New York City, prices decreased $1.06 from $4.04 per MMBtu to $2.98 per MMBtu,” it said.
The EIA said that shale-gas prices in Appalachia fell as temperatures increased and takeaway capacity was restricted.
The Tennessee Zone 4 Marcellus spot prices decreased 67 cents from $3.43 per MMBtu on January 16 to $2.76 per MMBtu.
“Prices at Dominion South in southwest Pennsylvania fell 70 cents from $3.42 per MMBtu to $2.72 per MMBtu,” said the report.
“A combination of factors likely affected prices in the region. As in New England and New York City, cold temperatures throughout the Northeast over the long weekend receded, reducing heating demand,” it added.
“Prices west of the Rockies also decreased as a winter storm that brought snow to the mountains of Southern California moved out of the area,” according to the EIA.
Prices at the Pacific Gas & Electric Citygate in Northern California fell $1.02 per MMBtu to $3.60 per MMBtu.
Southwest and Texas prices were also lower. At the Waha Hub in West Texas, which is located near Permian Basin production activities, prices averaged $2.29 per MMBtu, $1.32 per MMBtu lower than Henry Hub prices.
Atlantic Sunrise project to boost shale-gas volumes in US markets is placed into service
US pipeline company Williams said the Federal Energy Regulatory Commission had approved the placing into full service of its Atlantic Sunrise project to boost shale-gas volumes to main markets, including for LNG.
US LNG and shale update
Aug 31 (LNGJ) - US LNG exports increased in the past week to six shipments, including five from Cheniere Energy’s Sabine Pass facility in Louisiana and one from the Dominion Energy Cove Point plant in Maryland. One further LNG carrier was lifting a cargo from Cove Point for imminent departure, according to a report from the Energy Information Administration. The benchmark Henry Hub natural gas spot price declined on the week to $2.96 per million British thermal units. Appalachian shale-gas prices and Permian Basin prices saw their discounts to the Henry Hub widen in the week because of flat demand. “Tennessee Zone 4 Marcellus spot prices decreased 25 cents from $2.61 per MMBtu to $2.36 per MMBtu. Prices at Dominion South in southwest Pennsylvania fell to $2.62 per MMBtu,” said the EIA. “Permian Basin spot prices at the Waha Hub in West Texas, which is located near the Permian, declined and are now at record lows compared to the Henry Hub,” it added. “Prices at the Waha Hub averaged $1.27 per MMBtu, $1.69 per MMBtu lower than Henry Hub prices. This decrease is the largest differential between Waha and Henry Hub prices since at least 2013,” stated the EIA.
