Energy Prospectus

Forbes: U.S. liquefied natural gas hits record highs again
Over the final week of 2018, U.S. feedgas for LNG exports surpassed 5 billion cubic feet per day for the first time ever This is an increase of over 60% for the same time in 2017. LNG is now 4% of total U.S. gas needs and remains our largest incremental market going forward. Bolstered by an easing of the trade war with China, the largest new gas user in the world (with nearly 15 regasification terminals scheduled to come on line 2020-2023), 2019 will be the "biggest year ever" for U.S. LNG. China was the third-largest buyer of U.S. LNG last year after Mexico and South Korea, despite having no off take agreements.
There are now three U.S. LNG export facilities: Sabine Pass (LA), Cove Point (MD), and Corpus Christi (TX), with the latter just recently began commissioning liquefaction trains in November. There will be six such sites by the end of 2019.
The first half of 2019 will a busy one for the U.S. LNG business. Green lighted final investment decisions for projects over the next six months could eventually inject $20-25 billion into the Gulf Coast region alone over the next four years. And over the next seven years, it is easy to see U.S. LNG gas export capacity exploding to 20-25 Bcf/d. That would be around a quarter of current U.S. gas output.

NGI: LNG-related approvals by FERC signaling more U.S. exports in 2019
Federal authorities started off the new year with approvals for a pair of liquefied natural gas (LNG)-related projects that indicate more U.S. exports this year.
> On January 3rd, one day after receiving FERC approval to begin service on the remaining components of a Texas expansion project to Gulf Coast LNG terminals, parent company Williams announced that full service had begun on the Gulf Connector Expansion.
> The Federal Energy Regulatory Commission said Transcontinental Gas Pipe Line Co. LLC (Transco) was cleared to start service on Compressor Station 17 in San Patricio County and Compressor Station 32 in Wharton County.
> The United States is on pace to have the third-largest export capacity in the world by the end of 2019, more than doubling its current export capacity to 8.9 Bcf/d, according to the Energy Information Administration. Qatar and Australia hold the top two respective spots in exports.

S&P Global Platts: Cheniere ramp-up fuels US LNG feedgas demand strength

US LNG feedgas deliveries remained near record levels Monday with Cheniere Energy continuing equipment testing on the second liquefaction train at its export facility near Corpus Christi, Texas, S&P Global Platts Analytics data showed. Commissioning of the unit is progressing well, a company spokesman said in an email responding to questions. The biggest US exporter of LNG produced from shale gas has been ahead of schedule with construction at the Texas terminal, as well as its Sabine Pass liquefaction facility in Louisiana. With as many as three more export terminals expected to start up in 2019, the US is on the verge of becoming a major player in the global supply of LNG. The additions and expansions are expected to more than double the amount of domestic LNG feedgas demand this year compared with 2018. The biggest question mark hanging over the US industry, and by extension market participants in Asia, Europe and Latin America, is how many new projects will be advanced by developers in what is shaping up to be a busy year for final investment decisions. To hit the early- to mid-2020s timeframe when global supply is forecast to be short, construction would need to start in 2019, or soon after.
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MY TAKE: There is FEAR that a surge in associated gas from the Permian Basin when new pipelines come on-line will over-supply the U.S. gas market and cause Henry Hub gas prices to fall. This happened in early 2016 when a mild winter combined with a surge of associated gas from the South Texas Eagle Ford caused HH prices to dip below $2.00/MMBtu. The difference now is that we have a much stronger export market. In addition to LNG exports ramping up BIG in 2019, Enbridge has a new pipeline filling up today that will be exporting over 2.5 Bcfpd of gas to Mexico. Plus, gas in storage will be near record low by the end of Q1 2019. PS: natural gas prices spiked to $3.87/MMBtu in December, 2016.