LNG

Williams Companies, a leading US natural gas pipelines operator with projects aimed at boosting feed-gas supplies for Gulf Coast LNG export plants, has reached an agreement to acquire a portfolio of natural gas storage assets from an affiliate of Hartree Partners LP for $1.95 billion.

The United States has been exporting more liquefied natural gas than any other country and LNG shipments were expected to surge through the next 12 months while deliveries were also increasing of pipeline natural gas to both Mexico and Canada.

US dry natural gas production has remained at relatively high levels throughout 2023 despite a decline in US natural gas prices with growth driven by the Permian Basin where most of the natural gas is produced from associated gas produced from oil wells.

European Union liquefied natural gas and pipeline gas prices fell for a 10th week as storage inventories filled, particularly in Italy and Germany, helped by steady LNG cargo deliveries and low gas demand, while North Asian spot cargo prices also fell, though at a slower rate.

The United States short-term energy outlook for May said that in future it would make use of changed methodology and the new model would combine a 30-year trendline and the National Oceanic and Atmospheric Administration’s forecast to create the weather forecasts.

The US Government expects liquefied natural gas exports to increase in 2023 and 2024 but in the short term during April and May there would be slight declines in the nation’s natural gas output because of pipeline maintenance.

While the US is now one of the world’s largest LNG exporters, the government said states in the Northeast US will pay the highest electricity prices because of inadequate natural gas pipeline supplies, reduced inventories and difficulties in securing LNG shipments for domestic use because of tight global supplies and high prices.

“We forecast that wholesale electricity prices at major power trading hubs will be about 20-60 percent higher on average this winter,” said the Energy Information Administration in its short-term and winter energy outlook.

“The highest wholesale electricity prices are likely to be in New England because of possible natural gas pipeline constraints, reduced fuel inventories for power generation and uncertainty regarding liquefied natural gas shipments given the tight global supply conditions,” explained the EIA report.

The report’s conclusions mean that people in the states of Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island will pay the highest power bills in the nation this winter.

The US benchmark Henry Hub natural gas price is expected to remain above $7 per million British thermal units in the winter season.

Henry Hub price

“We expect the Henry Hub natural gas spot price to average about $7.40 per MMBtu in the fourth quarter and then fall below $6.00 per MMBtu in 2023 as US natural gas production rises,” said the EIA report.

“We forecast that US natural gas inventories will end the injection season (April-October) at nearly 3.5 trillion cubic feet, which would be 6 percent below the five-year (2017-2021) average,” the report added.

US consumption of natural gas is forecast as averaging 87.9 billion cubic feet per day in 2022, up 3.9 Bcf per day from 2021 and reflecting more consumption across almost all sectors.

US dry natural gas production averaged 98.5 Bcf per day in the third quarter.

“We forecast natural gas production will average 99.1 Bcf per day in the fourth quarter and 99.6 Bcf per day in 2023,” stated the EIA.

Natural gas will fuel 38 percent of US electricity generation in 2022, up from 37 percent in 2021.

Renewables and coal

“Growing generation from renewable sources limits growth in natural gas-fired generation and coal’s generation share declines because of the expected retirement of some coal-fired capacity,” the report explained.

The outlook forecasts Brent crude oil spot prices averaging $93 per barrel in the fourth quarter and $95 per barrel in 2023.

“Potential petroleum supply disruptions and slower-than-expected crude oil production growth could lead to higher oil prices, while the possibility of slower-than-forecast economic growth may contribute to lower prices,” said the EIA.

“US crude oil production is forecast to average 11.7 million barrels per day in 2022 and 12.4 million barrels per day in 2023, which would surpass the record high set in 2019,” the report added.

Chart Industries, the US LNG and industrial gases equipment-maker, said it had competed an investment in a US company called Transform Materials.

Transform Materials is a sustainable chemical technology company that uses microwave plasma to convert natural gas into acetylene and hydrogen.

“Its highly selective, cost-effective, net-carbon-negative process converts the methane in natural gas into high-value products suitable for direct use or downstream reactions,” said Chart.

Chart has purchased 5 percent of Riviera Beach, Florida-based Transform Materials’ equity for $25 million.

“We transform methane into acetylene and hydrogen, critical precursors for the synthesis of high-value chemical end products, without using traditional techniques that form carbon dioxide,” explained David Soane, Chairman of Transform Materials.

“That means we can meet important future needs of the petrochemical industry without creating harmful greenhouse gases,” added Soane.

In conjunction with the strategic investment, Chart and Transform also signed a binding commercial memorandum of understanding.

The MOU establishes the commercial collaboration and equipment supply arrangements for Chart to supply Transform projects.

Transform Materials’ process has already been adopted via a global licensing agreement with DSM Nutritional Products Ltd.

“This investment in and commercial agreement with Transform Materials is yet another step toward expanding our customers’ options in our high-growth clean-energy markets, in particular hydrogen,” stated Jill Evanko, Chart’s Chief Executive and President.

“Perhaps most impactful about Transform’s patented process technology is that there is no oxygen involved in the reaction, so therefore no carbon-dioxide is generated, the very definition of clean,” added Evanko.

Rising US natural gas domestic consumption and LNG shipments overseas, along with cross-border pipeline exports, are coinciding with increasing production, keeping prices stable even amid relatively low storage levels.

Jan 19 (LNGJ) - Five LNG carriers with carrying capacity of 17.2 billion cubic feet combined departed the Cheniere Energy-owned Sabine Pass export plant in Louisiana in the week through January 17 and one other tanker with 3.8 Bcf of capacity was loading at the terminal, according to the weekly natural gas report from the Energy Information Administration. In the working gas storage report, which lags by one week, the EIA said withdrawal levels were lower than the five-year average for the first time in three weeks. “Net withdrawals from storage totaled 183 Bcf for the week ending January 12, compared with the five-year (2013-2017) average net withdrawal of 203 Bcf and last year's net withdrawals of 230 Bcf during the same week. Working gas stocks totaled 2,584 Bcf, which is 362 Bcf less than the five-year average and 368 Bcf less than last year at this time,” said the EIA.