LNG

Mountain Valley Pipeline spanning the states of Virginia and West Virginia and whose operator is Equitrans Midstream, a company currently the subject of a merger deal with LNG player EQT Corp., has formally started up to meet soaring demand and as the most politicised and delayed pipeline in North America.

Southern Energy Corp., the established producer with natural gas and light oil assets in the northern US Gulf Coast, has posted earnings for the first quarter affected by declining gas prices compared with last year.

The US Federal Energy Regulatory Commission has announced a special meeting on May 13 to consider its long-awaited electricity transmission reform proposals that will affect energy markets across America.

The reforms have been considered since severe storms in states from North Dakota to Georgia struck in the Christmas of 2022. This followed an earlier major winter storm in Texas that caused power outages in the Southeast.

The Transmission Reform meeting begins at 11am on May 13 in the Commission Meeting Room at the FERC’s Washington, D.C. headquarters.

FERC has proposed a set of regulatory reforms to speed a much-needed expansion of the nation’s network of long-distance electric transmission lines.

FERC’s final rules, which are now set to be debated, are expected to substantially update the framework under which transmission lines are planned and paid for, and pave the way for the growth of clean energy.

Analysts noted that the FERC’s reforms come at a time when the future of the electric grid has become the focus of partisan debate and legal challenges to FERC’s proposed rules are expected.

Power demand surge

Electricity demand in the United States is expected to grow dramatically over coming decades, by some estimates tripling before 2050.

This is because under current US plans, from cars to home heating, there will be a move to the use of more electric power.

Accompanying this demand will be a fundamental shift in how electricity is produced, with renewable energy becoming an ever-larger portion of the generation mix.

Both of these trends to more and cleaner power will require simultaneous expansion of the network of long-distance transmission lines to reliably deliver power to consumers.

Yet despite clear need, relatively few miles of new transmission have been built in recent years.

At the core of the challenge are outdated frameworks for how the grid is planned and paid for.

In addition, the future of the electric grid has become the focus of political debate, turning what was once primarily an engineering challenge into a political one.

“One factor at play here is that the utility industry wants to make sure that the system is developed for its own needs, which don’t necessarily align with broader decarbonization goals or the interests of consumers in having low-cost power,” said one study filed with FERC.

Global liquefied natural gas cargo prices from North Asia to the European Union continued their upward trend for a fifth week, defying the record storage levels at the end of the winter season amid market concerns about possible energy policy or geopolitical threats that could undermine sentiment in the months ahead.

US Natural gas production is forecast to decline during the coming year and will only increase in 2025, driven by expected higher associated gas output in the Permian Basin of West Texas due to growth in LNG export demand.

EQT Corp., one of the leading US natural gas producers, reported a swing to first-quarter net profits as it reported improved average realised prices amid high cash flow from operations in the Appalachia shale-gas basins following the 2022 first-quarter losses that were caused by derivatives and tax impacts.

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.

Pioneer Natural Resources, the biggest Texas oil producer and the largest acreage holder in the oil and gas-rich Permian Basin of the southwest US, reported fourth-quarter profits that were better than expected and said it would push ahead with drilling, completions, facilities and water infrastructure spending of up to $4.75 billion in 2023.

The US said liquefied natural gas exports will be lower over the next few months of 2023 because of high gas stocks in Europe and Freeport LNG being offline while record dry gas production growth has been outpacing demand.

US oil and natural gas and LNG production companies are monitoring Tropical Storm Karl that has formed in the southern part of the Gulf of Mexico in the Bay of Campeche.