In the News:
Approximately 5 Bcf/d of natural gas pipeline capacity has entered service in 2020
The United States added approximately 5 billion cubic feet per day (Bcf/d) of pipeline capacity in 2020 through early July, according to EIA’s recently updated Natural Gas Pipeline Project Tracker. Although most of the new pipeline capacity serves to increase connectivity in the producing regions, several projects that increase deliverability to growing demand markets in North America are also starting operations.
Projects that primarily serve to connect additional natural gas supplies to existing infrastructure include:
Cheyenne Connector Pipeline and Cheyenne Hub Enhancement Project
These Tallgrass Energy projects, which entered service in late June 2020, added 1.6 Bcf/d of capacity in total. The 0.6 Bcf/d Cheyenne Connector is a 70-mile, 36-inch pipeline that brings natural gas coproduced in the Denver-Julesburg Basin, an oil-rich play in eastern Colorado, into the Cheyenne Hub. The Cheyenne Hub Enhancement Project increases interconnectivity and deliverability between the Rockies Express Pipeline and other interstate transmission systems, allowing increased flexibility and expanding markets for Rockies production.
Cheniere MIDSHIP Pipeline
Cheniere’s 233-mile, 36-inch greenfield MIDSHIP Pipeline began operations in April 2020, bringing natural gas produced in the SCOOP-STACK Basin in western Oklahoma to the Bennington hub at the Oklahoma-Texas border. From the Bennington hub, natural gas supplies will serve growing southeastern demand markets, including liquefied natural gas (LNG) facilities owned by Cheniere.
Waha Hub interconnects
Three projects totaling more than 1 Bcf/d that connect to the Waha Hub are located in western Texas near Permian Basin production areas:
- Northern Delaware Basin Expansion: Completed in February 2020, this 14-mile, 0.32 Bcf/d expansion of the El Paso Natural Gas Transmission System (EPNG) increased takeaway capacity out of the Delaware Basin.
- Sendero Carlsbad Gateway Project: This new pipeline was completed in May 2020 and connects natural gas processing plants in southeastern New Mexico to the Waha hub. The 23-mile, 24-inch pipeline has a capacity of 0.40 Bcf/d.
- South Mainline Expansion Project: Another expansion on EPNG, this project entered service in early July 2020. Providing 0.32 Bcf/d of additional westbound capacity out of the Waha Hub, the South Mainline Expansion delivers additional supplies to Arizona and Southern California markets. A related project, the 0.32 Bcf/d Sierrita Pima Expansion, was also completed in early 2020, increasing the capacity on the Sierrita export pipeline from Tucson, Arizona, to the border with Mexico.
In addition to these projects, which account for most of the new pipeline capacity in the first half of 2020, the second phases of the Sabal Trail pipeline (0.17 Bcf/d) and the Hillabee Expansion (0.2 Bcf/d) entered service in April, increasing deliverability to southeast demand markets. The 0.3 Bcf/d Empire North Expansion Project, which increases deliverability to western New York consumers on the Empire Pipeline, entered partial service in late June.
EIA’s Natural Gas Pipeline Projects Tracker is updated quarterly. EIA will publish the next update in October 2020.
Overview:
(For the week ending Wednesday, July 29, 2020)
- Natural gas spot prices rose at most locations this report week (Wednesday, July 22 to Wednesday, July 29). The Henry Hub spot price rose from a low of $1.64 per million British thermal units (MMBtu) last Wednesday to $1.75/MMBtu yesterday.
- At the New York Mercantile Exchange (Nymex), the August 2020 contract expired yesterday at $1.854/MMBtu, up 17¢/MMBtu from last Wednesday. The September 2020 contract price increased to $1.930/MMBtu, up 21¢/MMBtu from last Wednesday to yesterday. The price of the 12-month strip averaging September 2020 through August 2021 futures contracts climbed 18¢/MMBtu to $2.620/MMBtu.
- The net injections to working gas totaled 26 billion cubic feet (Bcf) for the week ending July 24. Working natural gas stocks totaled 3,241 Bcf, which is 24% more than the year-ago level and 15% more than the five-year (2015–19) average for this week.
- The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 22¢/MMBtu, averaging $4.88/MMBtu for the week ending July 29. The prices of natural gasoline, propane, ethane, butane, and isobutane all rose, by 14%, 5%, 2%, 2%, and 1%, respectively.
- According to Baker Hughes, for the week ending Tuesday, July 21, the natural gas rig count decreased by 3 to 68, the lowest level on record. The number of oil-directed rigs rose by 1 to 181. The total rig count decreased by 2, and it now stands at 251.
Prices/Supply/Demand:
Prices rise at most locations. This report week (Wednesday, July 22 to Wednesday, July 29), the Henry Hub spot price rose 11¢ from a low of $1.64/MMBtu last Wednesday to $1.75/MMBtu yesterday. Temperatures were generally close to normal across the Lower 48 states, with warmer-than-normal temperatures across the eastern seaboard and upper Midwest. At the Chicago Citygate, the price increased 18¢ from a low of $1.61/MMBtu last Wednesday to a high of $1.79/MMBtu yesterday.
California prices are up. The price at PG&E Citygate in Northern California rose 21¢, up from $2.38/MMBtu last Wednesday to a high of $2.59/MMBtu yesterday. The price at SoCal Citygate in Southern California increased 84¢ from $1.76/MMBtu last Wednesday to $2.60/MMBtu yesterday. Genscape reports that on Tuesday SoCalGas began storage withdrawal restrictions at the Honor Rancho storage field. Genscape expects the withdrawal restrictions to last until September 19.
Northeast prices increase. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 15¢ from $1.59/MMBtu last Wednesday to $1.74/MMBtu yesterday as New England experienced warmer-than-normal temperatures during the week. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 4¢ from $1.76/MMBtu last Wednesday to $1.80/MMBtu yesterday.
The Tennessee Zone 4 Marcellus spot price increased 5¢ from $1.15/MMBtu last Wednesday to $1.20/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose 6¢ from $1.24/MMBtu last Wednesday to $1.30/MMBtu yesterday.
Permian Basin discount to the Henry Hub stays relatively flat. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $1.22/MMBtu last Wednesday, 42¢/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a high of $1.32/MMBtu, 43¢/MMBtu lower than the Henry Hub price. On Monday, the price at the Waha Hub reached as low as $1.04/MMBtu as Hurricane Hanna made landfall over southern Texas on Saturday, bringing cooler air into the region that lowered power demand over the weekend. In addition, AEP Texas, one of the state’s largest electricity providers, reported nearly 200,000 customers were without power after the storm on Sunday morning, although power had been restored to most customers by Wednesday.
U.S. Southeast braces for Tropical Storm Isaias. Tropical Storm Isaias is expected to make landfall in Florida this coming Friday or Saturday. EIA's Energy Disruptions map shows hurricane-related map layers from the National Hurricane Center and EIA's map layers for energy-related infrastructure such as high-voltage transmission lines, power plants, and petroleum bulk terminals.
Supply rises slightly. According to data from IHS Markit, the average total supply of natural gas rose by 0.1% compared with the previous report week. Dry natural gas production grew by 0.2% compared with the previous report week. Average net imports from Canada decreased by 2.1% from last week.
Demand rises across all domestic sectors, with power generation reaching a summer high. Total U.S. consumption of natural gas rose by 0.9% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation climbed by 0.7% week over week, reaching 43.6 Bcf/d on Monday, the highest level so far in summer 2020. Industrial sector consumption increased by 1.3% week over week. In the residential and commercial sectors, consumption increased by 0.6%. Natural gas exports to Mexico decreased 0.9%.
U.S. LNG exports are flat week over week. Seven liquefied natural gas (LNG) vessels (two each from Cameron and Cove Point and one each from Corpus Christi, Sabine Pass, and Freeport) with a combined LNG-carrying capacity of 25 Bcf departed the United States between July 23 and July 29, 2020, according to shipping data provided by Marine Traffic.
Storage:
The net injections into storage totaled 26 Bcf for the week ending July 24, compared with the five-year (2015–19) average net injections of 33 Bcf and last year's net injections of 56 Bcf during the same week. Working natural gas stocks totaled 3,241 Bcf, which is 429 Bcf more than the five-year average and 626 Bcf more than last year at this time.
According to The Desk survey of natural gas analysts, estimates of the weekly net change to working natural gas stocks ranged from net injections of 17 Bcf to 32 Bcf, with a median estimate of 24 Bcf.
The average rate of injections into storage is 11% higher than the five-year average so far in the refill season (April through October). If the rate of injections into storage matched the five-year average of 9.2 Bcf/d for the remainder of the refill season, the total inventory would be 4,152 Bcf on October 31, which is 429 Bcf higher than the five-year average of 3,723 Bcf for that time of year.
More storage data and analysis can be found on the Natural Gas Storage Dashboard and the Weekly Natural Gas Storage Report.
See also:
| Spot Prices ($/MMBtu) | Thu, 23-Jul |
Fri, 24-Jul |
Mon, 27-Jul |
Tue, 28-Jul |
Wed, 29-Jul |
|---|---|---|---|---|---|
| Henry Hub |
1.69 |
1.73 |
1.76 |
1.77 |
1.75 |
| New York |
1.75 |
1.79 |
1.89 |
1.88 |
1.80 |
| Chicago |
1.65 |
1.67 |
1.71 |
1.74 |
1.79 |
| Cal. Comp. Avg.* |
1.83 |
1.86 |
2.05 |
2.22 |
2.18 |
| Futures ($/MMBtu) | |||||
| August contract | 1.785 |
1.808 |
1.734 |
1.800 |
1.854 |
| September contract |
1.835 |
1.867 |
1.786 |
1.864 |
1.930 |
| *Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg. | |||||
| Source: NGI's Daily Gas Price Index | |||||
| U.S. natural gas supply - Gas Week: (7/23/20 - 7/29/20) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| Marketed production | 101.5 |
101.4 |
102.9 |
| Dry production | 89.8 |
89.7 |
90.4 |
| Net Canada imports | 4.4 |
4.5 |
4.8 |
| LNG pipeline deliveries | 0.2 |
0.2 |
0.1 |
| Total supply | 94.4 |
94.4 |
95.3 |
|
Source: IHS Markit | |||
| U.S. natural gas consumption - Gas Week: (7/23/20 - 7/29/20) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| U.S. consumption | 71.3 |
70.7 |
68.9 |
| Power | 41.6 |
41.3 |
39.4 |
| Industrial | 20.7 |
20.4 |
20.9 |
| Residential/commercial | 9.0 |
8.9 |
8.6 |
| Mexico exports | 5.6 |
5.6 |
5.4 |
| Pipeline fuel use/losses | 5.6 |
5.6 |
6.3 |
| LNG pipeline receipts | 3.2 |
3.7 |
5.9 |
| Total demand | 85.7 |
85.6 |
86.6 |
|
Source: IHS Markit | |||
| Rigs | |||
|---|---|---|---|
Tue, July 21, 2020 |
Change from |
||
last week |
last year |
||
| Oil rigs | 181 |
0.6% |
-76.7% |
| Natural gas rigs | 68 |
-4.2% |
-59.8% |
| Note: Excludes any miscellaneous rigs | |||
| Rig numbers by type | |||
|---|---|---|---|
Tue, July 21, 2020 |
Change from |
||
last week |
last year |
||
| Vertical | 14 |
-6.7% |
-75.0% |
| Horizontal | 215 |
0.0% |
-73.9% |
| Directional | 22 |
-4.3% |
-67.2% |
| Source: Baker Hughes Co. | |||
| Working gas in underground storage | ||||
|---|---|---|---|---|
Stocks billion cubic feet (Bcf) |
||||
| Region | 2020-07-24 |
2020-07-17 |
change |
|
| East | 706 |
693 |
13 |
|
| Midwest | 815 |
799 |
16 |
|
| Mountain | 196 |
190 |
6 |
|
| Pacific | 313 |
311 |
2 |
|
| South Central | 1,211 |
1,221 |
-10 |
|
| Total | 3,241 |
3,215 |
26 |
|
|
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report | ||||
| Working gas in underground storage | |||||
|---|---|---|---|---|---|
Historical comparisons |
|||||
Year ago (7/24/19) |
5-year average (2015-2019) |
||||
| Region | Stocks (Bcf) |
% change |
Stocks (Bcf) |
% change |
|
| East | 591 |
19.5 |
626 |
12.8 |
|
| Midwest | 669 |
21.8 |
687 |
18.6 |
|
| Mountain | 155 |
26.5 |
176 |
11.4 |
|
| Pacific | 270 |
15.9 |
295 |
6.1 |
|
| South Central | 930 |
30.2 |
1,028 |
17.8 |
|
| Total | 2,615 |
23.9 |
2,812 |
15.3 |
|
| Source: Form EIA-912, Weekly Underground Natural Gas Storage Report | |||||
| Temperature – heating & cooling degree days (week ending Jul 23) | ||||||||
|---|---|---|---|---|---|---|---|---|
HDD deviation from: |
CDD deviation from: |
|||||||
| Region | HDD Current |
normal |
last year |
CDD Current |
normal |
last year |
||
| New England | 1 |
-1 |
0 |
75 |
31 |
7 |
||
| Middle Atlantic | 0 |
-1 |
-1 |
98 |
39 |
10 |
||
| E N Central | 1 |
-1 |
-2 |
78 |
20 |
1 |
||
| W N Central | 1 |
-3 |
-1 |
76 |
4 |
0 |
||
| South Atlantic | 0 |
0 |
0 |
123 |
25 |
12 |
||
| E S Central | 0 |
0 |
0 |
118 |
23 |
24 |
||
| W S Central | 0 |
0 |
0 |
132 |
6 |
7 |
||
| Mountain | 0 |
-3 |
-1 |
92 |
12 |
-2 |
||
| Pacific | 0 |
-3 |
-1 |
49 |
4 |
-8 |
||
| United States | 0 |
-2 |
-1 |
94 |
19 |
5 |
||
|
Note: HDD = heating degree day; CDD = cooling degree day Source: National Oceanic and Atmospheric Administration | ||||||||
Average temperature (°F)
7-day mean ending Jul 23, 2020
Source: National Oceanic and Atmospheric Administration
Deviation between average and normal (°F)
7-day mean ending Jul 23, 2020
Source: National Oceanic and Atmospheric Administration
