Working gas in storage was 3,695 Bcf as of Friday, December 1, 2017, according to EIA estimates. This represents a net increase of 2 Bcf from the previous week. Stocks were 264 Bcf less than last year at this time and 36 Bcf below the five-year average of 3,731 Bcf. At 3,695 Bcf, total working gas is within the five-year historical range.
Cheer up: Snow flurries are possible in Houston tonight.
November & December is when there are some wild swings in U.S. natural gas storage. I promise, there will be a big draw from storage reported next Thursday for the week ending December 8th. The weather forecast for the rest of December is very bullish for natural gas.
My SWAG is that natural gas storage will dip to near 3,000 Bcf by December 31st. That will put storage very close to the bottom of the 5-year range.
At December 31, 2016 natural gas in U.S. storage was ~3,300 Bcf and the gas price spike to over $3.70/MMBtu.
Remember: The natural gas price you see quoted is the price of the front month NYMEX contract (Jan). Speculative traders control the commodity markets on NYMEX. A high percentage of the trades are on margin. Most traders put on tight stop loss orders. When something unexpected happens there is a cascade effect that can cause exaggerated moves in the price. Obviously, for commodities the price cannot go to zero, so buyers eventually step in to stabilize the price. As it sinks in that winter has arrived, the price of gas should go a lot higher.
Here are the 5-year average draws for the next four weeks:
Dec 08: 64 Bcf
Dec 15: 132 Bcf
Dec 22: 114 Bcf
Dec 29: 123 Bcf
The weather forecast for the rest of December is not for "average" temperatures.
Natural Gas Storage Report - Dec 7
Natural Gas Storage Report - Dec 7
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec 7
Antero Resources (AR) has more than 100% of their natural gas production hedged for Q4 2017 and Q1 2018. So, the dip in price will actually result in a higher realized price when they report Q4 results. In the long-run, AR definitely wants higher gas and NGL prices so they can layer on more hedges.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
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John.A.Hunt
- Posts: 52
- Joined: Wed Nov 08, 2017 1:42 pm
Re: Natural Gas Storage Report - Dec 7
What is the winter forecast for Europe, China, Japan? Any gauge how their heating needs this season will affect the markets?
Re: Natural Gas Storage Report - Dec 7
Natural Gas trades on regional markets, so weather outside of the U.S. has very little impact on the U.S. gas price.
A "Polar Vortex" in Southeast Canada will because we export gas to the big cities in SE Canada.
A "Polar Vortex" in Southeast Canada will because we export gas to the big cities in SE Canada.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec 7
U.S. LNG exports reach a tipping point. Houston Chronicle.
In 2011, Cheniere Energy was a little-known company with big ambitions when it signed an $8 billion contract that would transform the United States into an exporter of liquefied natural gas after decades of relying on foreign suppliers. Five years later, just days before the Houston company shipped its first LNG cargo, another big deal gave a jolt to nascent U.S. industry. Royal Dutch Shell bought Cheniere's customer, BG Gas for $50 billion, a move that made Shell the world's largest international LNG producer and marketer and allied it with this nation's biggest LNG exporter. Shell remains Cheniere's best customer, buying almost half the production of Cheniere's massive Sabine Pass LNG terminal. These two events have helped bring the United States to a tipping point, as LNG exports, mostly out of Texas and Louisiana, grow quickly. The Energy Department projects that LNG production capacity will quadruple by the end of 2019, making the nation the largest source of LNG after Qatar and Australia. The International Energy Agency predicts the U.S. could vault to first within a decade.
In 2011, Cheniere Energy was a little-known company with big ambitions when it signed an $8 billion contract that would transform the United States into an exporter of liquefied natural gas after decades of relying on foreign suppliers. Five years later, just days before the Houston company shipped its first LNG cargo, another big deal gave a jolt to nascent U.S. industry. Royal Dutch Shell bought Cheniere's customer, BG Gas for $50 billion, a move that made Shell the world's largest international LNG producer and marketer and allied it with this nation's biggest LNG exporter. Shell remains Cheniere's best customer, buying almost half the production of Cheniere's massive Sabine Pass LNG terminal. These two events have helped bring the United States to a tipping point, as LNG exports, mostly out of Texas and Louisiana, grow quickly. The Energy Department projects that LNG production capacity will quadruple by the end of 2019, making the nation the largest source of LNG after Qatar and Australia. The International Energy Agency predicts the U.S. could vault to first within a decade.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Natural Gas Storage Report - Dec 7
U.S. liquefied natural gas exports have increased as new facilities come online
U.S. liquefied natural gas exports have increased as new facilities come online
Source: U.S. Energy Information Administration, Natural Gas Monthly (data for October and November 2017 are EIA estimates based on tanker loads)
In August 2017, total U.S. natural gas liquefaction capacity in the Lower 48 states increased to 2.8 billion cubic feet per day (Bcf/d) following the completion of the fourth liquefaction unit at the Sabine Pass liquefied natural gas (LNG) terminal in Louisiana. With increasing liquefaction capacity and utilization, U.S. LNG exports averaged 1.9 Bcf/d, and capacity utilization averaged 80% this year, based on data through November.
Sabine Pass, located on the U.S. Gulf Coast near the Louisiana-Texas border, consists of four existing natural gas liquefaction units, or trains, with a fifth train currently under construction. When complete, Sabine Pass will have a total liquefaction capacity of 3.5 Bcf/d. Five additional LNG projects are currently under construction in the United States, and they are expected to increase total U.S. liquefaction capacity to 9.6 Bcf/d by the end of 2019:
Cove Point liquefaction terminal (one train, 0.75 Bcf/d capacity) in Maryland is 97% complete, and Dominion Energy expects to place it in service before the end of 2017.
Elba Island LNG (10 modular liquefaction trains, 0.03 Bcf/d capacity each) in Georgia is owned by Kinder Morgan. Six trains are scheduled to come online in the summer of 2018, and four trains are scheduled to come online by May 2019.
Freeport LNG (three trains, 0.7 Bcf/d capacity each) in Texas is being developed by Freeport LNG Development, L.P. The first train is expected to come online in November 2018, with the remaining two trains following in six-month intervals.
Corpus Christi (two trains, 0.6 Bcf/d capacity each) in Texas is being developed by Cheniere and is expected to come online in 2019.
Cameron LNG (three trains, 0.6 Bcf/d capacity each) in Louisiana is being developed by Sempra LNG and is expected to come online in 2019.
Source: U.S. Energy Information Administration, based on IHS and trade press
Overall utilization of existing LNG liquefaction facilities is expected to average 80% in 2017 and 79% in 2018, based on LNG export projections in EIA’s latest Short-Term Energy Outlook. Several factors can affect utilization rates, including weather-related disruptions, demand fluctuations, seasonality in import markets, production schedules for new LNG facilities, and maintenance on existing facilities.
At Sabine Pass, the ramp-up process, combined with maintenance on Train 1, resulted in capacity utilization for Trains 1 and 2 averaging 51% in 2016. Capacity increased in 2017 with the addition of Trains 3 and 4, but the ramp-up periods for those trains, as well as lower spring demand in markets in Asia and Europe and disruptions caused by Hurricane Harvey in August, limited total utilization.
Exports from Sabine Pass began to increase in September 2017 as Train 4 ramped up to full production—reaching 2.7 Bcf/d in November—with an overall capacity utilization rate of 96% across four trains. Utilization at Sabine Pass is projected to remain well above 90% in winter 2017–2018 as a result of expected strong natural gas winter demand and high spot LNG prices in Asia and Europe
U.S. liquefied natural gas exports have increased as new facilities come online
Source: U.S. Energy Information Administration, Natural Gas Monthly (data for October and November 2017 are EIA estimates based on tanker loads)
In August 2017, total U.S. natural gas liquefaction capacity in the Lower 48 states increased to 2.8 billion cubic feet per day (Bcf/d) following the completion of the fourth liquefaction unit at the Sabine Pass liquefied natural gas (LNG) terminal in Louisiana. With increasing liquefaction capacity and utilization, U.S. LNG exports averaged 1.9 Bcf/d, and capacity utilization averaged 80% this year, based on data through November.
Sabine Pass, located on the U.S. Gulf Coast near the Louisiana-Texas border, consists of four existing natural gas liquefaction units, or trains, with a fifth train currently under construction. When complete, Sabine Pass will have a total liquefaction capacity of 3.5 Bcf/d. Five additional LNG projects are currently under construction in the United States, and they are expected to increase total U.S. liquefaction capacity to 9.6 Bcf/d by the end of 2019:
Cove Point liquefaction terminal (one train, 0.75 Bcf/d capacity) in Maryland is 97% complete, and Dominion Energy expects to place it in service before the end of 2017.
Elba Island LNG (10 modular liquefaction trains, 0.03 Bcf/d capacity each) in Georgia is owned by Kinder Morgan. Six trains are scheduled to come online in the summer of 2018, and four trains are scheduled to come online by May 2019.
Freeport LNG (three trains, 0.7 Bcf/d capacity each) in Texas is being developed by Freeport LNG Development, L.P. The first train is expected to come online in November 2018, with the remaining two trains following in six-month intervals.
Corpus Christi (two trains, 0.6 Bcf/d capacity each) in Texas is being developed by Cheniere and is expected to come online in 2019.
Cameron LNG (three trains, 0.6 Bcf/d capacity each) in Louisiana is being developed by Sempra LNG and is expected to come online in 2019.
Source: U.S. Energy Information Administration, based on IHS and trade press
Overall utilization of existing LNG liquefaction facilities is expected to average 80% in 2017 and 79% in 2018, based on LNG export projections in EIA’s latest Short-Term Energy Outlook. Several factors can affect utilization rates, including weather-related disruptions, demand fluctuations, seasonality in import markets, production schedules for new LNG facilities, and maintenance on existing facilities.
At Sabine Pass, the ramp-up process, combined with maintenance on Train 1, resulted in capacity utilization for Trains 1 and 2 averaging 51% in 2016. Capacity increased in 2017 with the addition of Trains 3 and 4, but the ramp-up periods for those trains, as well as lower spring demand in markets in Asia and Europe and disruptions caused by Hurricane Harvey in August, limited total utilization.
Exports from Sabine Pass began to increase in September 2017 as Train 4 ramped up to full production—reaching 2.7 Bcf/d in November—with an overall capacity utilization rate of 96% across four trains. Utilization at Sabine Pass is projected to remain well above 90% in winter 2017–2018 as a result of expected strong natural gas winter demand and high spot LNG prices in Asia and Europe
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group