LNG will put upward pressure on ngas prices

[dan_s]

IMO the combination of demand for power generation, more gas needed to refill storage, increasing LNG exports and increasing industrial demand will cause natural gas prices to rise heading into Q4. - Dan

Competition cuts liquefaction costs
From Petrochemical Update

A flurry of Gulf Coast LNG export facilities is set to raise U.S. domestic gas prices in the coming years and developers are optimizing liquefaction technology to capitalize on growing arbitrage opportunities between U.S. and global gas markets, analysts said.

The U.S. started to export LNG from the lower 48 states in February 2016, when Cheniere brought online its 1.4 Bcf/d Sabine Pass export facility in Louisiana. Around 5 Bcf/day of additional export capacity is expected to be completed by 2020 to export LNG to large markets in Asia, including China and Japan. Those terminals could make the U.S. the world’s third largest exporter of natural gas by 2018, according to the U.S. Energy Information Administration (EIA).

Rising Gulf Coast LNG export capacity is opening up new trading opportunities and creating greater contract flexibility. U.S. LNG will soon pass Qatar as the largest source of flexible-LNG supply that can quickly respond to global market prices, according to S&P Global Platts.

Rising LNG exports are having a growing influence on U.S. domestic natural gas prices and the EIA predicts gas prices will rise significantly in the coming years. The EIA’s reference scenario forecast, shown below, reflects rising demand from petrochemical and LNG export facilities, increased shale gas drilling levels and the expansion of gas production to higher-cost drilling areas.

Full article: http://www.oilandgas360.com/u-s-gas-use ... aign_2016)