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Natural Gas Weekly Update

for week ending February 20, 2019   |  Release date:  February 21, 2019   |  Next release:  February 28, 2019   |   Previous weeks


JUMP TO: In The News | Overview | Prices/Supply/Demand | Storage

In the News:

Bahrain is on track to begin LNG imports this spring

In the next few weeks, Bahrain is expected to receive its first import of liquefied natural gas (LNG), becoming the fifth country in the Middle East to import LNG. The Bahrain LNG import terminal will have a capacity of 0.8 billion cubic feet per day (Bcf/d) and will utilize an offshore floating storage unit (FSU) and a separate regasification platform connected via undersea pipelines to an onshore receiving facility located in the Khalifa bin Salman Port. An FSU vessel called Bahrain Spirit, with a storage capacity of approximately 173,000 cubic meters (0.8 Bcf/d), will serve the project under 20-year term charter.

LNG supply for the project will be procured in the global spot market to supplement existing domestic production until new production from the recently discovered offshore Khalij al Bahrain 2 oil and natural gas field comes online. Although Bahrain’s domestic natural gas production has increased in recent years, most of the increase is non-marketed production used for reinjection to maintain output levels at the country’s aging Bahrain field, which has been producing oil and natural gas since 1932.

LNG imports will be used to meet Bahrain’s growing natural gas demand, primarily from the industrial sector. Bahrain LNG will supply natural gas to two new combined-cycle natural gas-fired power plants scheduled to be in service in 2019–2020, as well a new refinery expected to come online by 2022. One of the natural gas-fired power plants (1.8 gigawatts (GW)) will be used to supply electricity to an expanded aluminum smelter, which is expected to be the largest single-site smelter in the world.

In 2018, global LNG regasification capacity expanded by an estimated 3.4 Bcf/d (3%) as two new countries—Bangladesh and Panama—began LNG imports, and several other countries (China, Turkey, Japan, Greece, and Finland) expanded their LNG import capacity. Early in 2019, Russia and Gibraltar (an overseas territory of the United Kingdom), have become the newest LNG importers. In 2019–2020, EIA estimates that an additional 9.6 Bcf/d of LNG import capacity will be placed in service. Most of this new capacity will be located in India (2.8 Bcf/d) and China (2.0 Bcf/d), accounting for about 50% of the total global capacity additions over this period. Further capacity expansions are expected in Jamaica, Taiwan, Thailand, and South Korea, while Ghana is expected to begin LNG imports by 2020.

Overview:

(For the week ending Wednesday, February 20, 2019)

  • Natural gas spot price movements were mixed this report week (Wednesday, February 13 to Wednesday, February 20). Henry Hub spot prices rose from $2.61 per million British thermal units (MMBtu) last Wednesday to $2.71/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the price of the March 2019 contract increased 6¢, from $2.575/MMBtu last Wednesday to $2.636/MMBtu yesterday. The price of the 12-month strip averaging March 2019 through February 2020 futures contracts climbed 3¢/MMBtu to $2.826/MMBtu.
  • Net withdrawals from working gas totaled 177 billion cubic feet (Bcf) for the week ending February 15. Working natural gas stocks are 1,705 Bcf, which is 4% lower than the year-ago level and 18% lower than the five-year (2014–18) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 38¢/MMBtu, averaging $6.75/MMBtu for the week ending February 20. The price of ethane fell by 3%. The price of natural gasoline, propane, butane, and isobutane rose by 8%, 9%, 9%, and 13%, respectively.
  • According to Baker Hughes, for the week ending Tuesday, February 12, the natural gas rig count decreased by 1 to 194. The number of oil-directed rigs rose by 3 to 857. The total rig count increased by 2, and it now stands at 1,051.

more summary data

Prices/Supply/Demand:

Price movements are mixed across the country. This report week (Wednesday, February 13 to Wednesday, February 20), Henry Hub spot prices rose 10¢ from $2.61/MMBtu last Wednesday to $2.71/MMBtu yesterday. At the Chicago Citygate, prices increased 11¢ from $2.57/MMBtu last Wednesday to $2.68/MMBtu yesterday.

Prices at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $1.94/MMBtu last Wednesday, 67¢/MMBtu lower than Henry Hub prices. Yesterday, prices at the Waha Hub averaged $1.74/MMBtu, 97¢/MMBtu lower than Henry Hub prices.

Prices remain high in the West. Sustained colder-than-normal temperatures west of the Rockies led to higher heating demand, putting upward pressure on prices. Prices at the Opal hub in southwest Wyoming, where Rockies production is delivered to several interstate pipelines, declined 12¢/MMBtu over the report week to average $8.29/MMBtu yesterday.

Prices at PG&E Citygate in Northern California fell 90¢ from $9.34/MMBtu last Wednesday to $8.44/MMBtu yesterday, with a low of $7.76/MMBtu on Thursday. Prices at SoCal Citygate were volatile, increasing $11.56 from $10.73/MMBtu last Wednesday to $22.29/MMBtu yesterday, with a low of $7.94/MMBtu on Thursday. High demand and constrained supply—including a force majeure on the Mojave Pipeline, which flows natural gas into Southern California from Arizona—led to wide swings in prices.

Prices at the California/Arizona border also increased, though not as steeply as SoCal Citygate prices. The SoCal Border average rose from $4.89/MMBtu last Wednesday to $11.17/MMBtu yesterday. Since the beginning of February, Southern California natural gas inventories have decreased by 15 Bcf, or 26%, and are 23% lower than inventories at this time last year. More information on the Southern California energy can be found in EIA’s Southern California Daily Energy Report.

Northeast price movements mixed. At the Algonquin Citygate, which serves Boston-area consumers, prices went down 81¢ from $3.75/MMBtu last Wednesday to $2.94/MMBtu yesterday with warmer temperatures. At the Transcontinental Pipeline Zone 6 trading point for New York City, prices increased 4¢ from $2.65/MMBtu last Wednesday to $2.69/MMBtu yesterday, with a high of $2.99/MMBtu on Tuesday.

Tennessee Zone 4 Marcellus spot prices increased 9¢ from $2.43/MMBtu last Wednesday to $2.52/MMBtu yesterday. Prices at Dominion South in southwest Pennsylvania rose 1¢ from $2.42/MMBtu last Wednesday to $2.43/MMBtu yesterday.

Supply rises. According to data from PointLogic Energy, the average total supply of natural gas rose by 1% compared with the previous report week. Dry natural gas production grew by 1%, primarily from increases in the Northeast. Average net imports from Canada increased by 2% as import volumes rose into both the western United States and the Midwest, according to Genscape.

Demand falls. Total U.S. consumption of natural gas fell by 2% compared with the previous report week, according to data from PointLogic Energy. Natural gas consumed for power generation declined by 4% week over week. Industrial sector consumption decreased by 1% week over week. In the residential and commercial sectors, consumption declined by 2% as temperatures across the country generally increased across the eastern and central United States. Natural gas exports to Mexico decreased 3%.

U.S. LNG exports increase week over week. Nine LNG vessels (seven from Sabine Pass and two from Cove Point) with a combined LNG-carrying capacity of 32.8 Bcf departed the United States from February 14 to February 20, according to shipping data compiled by Bloomberg. One vessel was loading at the Corpus Christi terminal on Wednesday, February 20.

Natural gas feedstock deliveries to the Corpus Christi terminal have averaged 0.7 Bcf/d since February 15, according to data from PointLogic Energy, as the facility prepares to enter commercial service on February 25. After shipping a cargo on January 17, the facility has been undergoing a scheduled maintenance. The facility’s second train, which is currently under construction, is expected to start commissioning activities this spring.

Storage:

Net withdrawals from storage totaled 177 Bcf for the week ending February 15, compared with the five-year (2014–18) average net withdrawals of 148 Bcf and last year's net withdrawals of 134 Bcf during the same week. Working gas stocks totaled 1,705 Bcf, which is 362 Bcf lower than the five-year average and 73 Bcf lower than last year at this time.

According to The Desk survey of natural gas analysts, estimates of the weekly net change from working natural gas stocks ranged from net withdrawals of 142 Bcf to 172 Bcf, with a median estimate of 167 Bcf.

The average rate of net withdrawals from storage is 15% lower than the five-year average so far in the withdrawal season (November through March). If the rate of withdrawals from storage matched the five-year average of 9.8 Bcf/d for the remainder of the withdrawal season, total inventories would be 1,274 Bcf on March 31, which is 362 Bcf lower than the five-year average of 1,636 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:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
14-Feb
Fri,
15-Feb
Mon,
18-Feb
Tue,
19-Feb
Wed,
20-Feb
Henry Hub 2.59 2.61 Holiday 2.68 2.71
New York 2.62 2.78 Holiday 2.99 2.69
Chicago 2.60 2.59 Holiday 2.70 2.68
Cal. Comp. Avg.* 7.20 8.05 Holiday 9.47 9.28
Futures ($/MMBtu)
March Contract 2.573 2.625 Holiday 2.662 2.636
April Contract 2.610 2.656 Holiday 2.697 2.669
*Avg. of NGI's reported prices for: Malin, PG&E Citygate, and Southern California Border Avg.
Sources: Natural Gas Intelligence and CME Group as compiled by Bloomberg, L.P.
Natural gas futures prices
Natural gas liquids spot prices


U.S. natural gas supply - Gas Week: (2/14/19 - 2/20/19)
Average daily values (Bcf/d):
this week
last week
last year
Marketed production
99.3
98.6
87.0
Dry production
88.5
87.8
77.7
Net Canada imports
4.6
4.5
5.5
LNG pipeline deliveries
0.4
0.3
0.3
Total supply
93.4
92.6
83.4

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. natural gas consumption - Gas Week: (2/14/19 - 2/20/19)
Average daily values (Bcf/d):
this week
last week
last year
U.S. consumption
92.7
94.6
78.5
    Power
25.2
26.2
22.1
    Industrial
23.5
23.6
22.2
    Residential/commercial
44.0
44.7
34.3
Mexico exports
4.6
4.8
4.4
Pipeline fuel use/losses
6.9
6.9
5.9
LNG pipeline receipts
4.8
4.0
2.5
Total demand
109.0
110.3
91.3

Source: OPIS PointLogic Energy, an IHS Company
Note: LNG pipeline receipts represent pipeline deliveries to LNG export terminals.

Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Tue, February 12, 2019
Change from
 
last week
last year
Oil rigs
857
0.4%
7.4%
Natural gas rigs
194
-0.5%
9.6%
Note: Excludes any miscellaneous rigs
Rig numbers by type
Tue, February 12, 2019
Change from
 
last week
last year
Vertical
66
-2.9%
1.5%
Horizontal
915
-0.9%
9.1%
Directional
70
20.7%
-1.4%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (Bcf)
Region
2019-02-15
2019-02-08
change
East
395
444
-49
Midwest
436
492
-56
Mountain
   87
95
-8
Pacific
138
155
-17
South Central
649
696
-47
Total
  1,705
 1,882
-177
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report
Working gas in underground storage
Historical comparisons
Year ago
(2/15/18)
5-year average
(2014-2018)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
407
-2.9
438
-9.8
Midwest
434
0.5
507
-14.0
Mountain
113
-23.0
130
-33.1
Pacific
205
-32.7
218
-36.7
South Central
619
4.8
774
-16.1
Total
1,778
-4.1
2,067
-17.5
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report


Temperature – heating & cooling degree days (week ending Feb 14)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
243
-22
19
0
0
0
Middle Atlantic
235
-17
14
0
0
0
E N Central
279
5
-18
0
0
0
W N Central
318
38
-8
0
0
0
South Atlantic
141
-24
24
12
5
-6
E S Central
142
-22
16
0
0
0
W S Central
125
11
-2
1
-3
0
Mountain
235
28
46
0
-1
0
Pacific
150
45
60
0
0
0
United States
214
9
15
2
1
-1
Note: HDD = heating degree day; CDD = cooling degree day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-day mean ending Feb 14, 2019

Mean Temperature (F) 7-Day Mean ending Feb 14, 2019

Source: National Oceanic and Atmospheric Administration

Deviation between average and normal (°F)

7-day mean ending Feb 14, 2019

Mean Temperature Anomaly (F) 7-Day Mean ending Feb 14, 2019

Source: National Oceanic and Atmospheric Administration