U.S. Energy Information Administration - EIA - Independent Statistics and Analysis

Natural Gas

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Natural Gas Weekly Update

for week ending April 15, 2015 | Release date: April 16, 2015 | Next release: April 23, 2015 | Previous weeks

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

In the News:

U.S. LNG export terminals on the move towards commercial operations

Cheniere Energy's Corpus Christi, Texas, liquefaction export facility, approved by the Federal Energy Regulatory Commission (FERC) this past December, is moving toward construction with an anticipated start-date during the second quarter of 2015. If it occurs as planned, there will be five liquefied natural gas (LNG) export facilities in varying stages of construction in the Lower 48 states. Four of these LNG terminals are brownfield projects being developed on existing regasification sites already in operation, which allows them to share functions with existing LNG import facilities to conserve on construction and operating expenses. Cheniere's Corpus Christi facility, being developed on Cheniere's La Quinta Channel property previously approved for a regasification facility (but not constructed), is the first greenfield project approved by FERC. These East Coast and Gulf Coast facilities, representing nearly 9 billion cubic feet per day (Bcf/d) of LNG export capacity, are expected to begin operations in late 2015. All of them are scheduled to be in service by 2018.

As of April 1, FERC, which is responsible for authorizing the siting and construction of LNG import and export facilities and associated pipelines, has received plans for15 proposed LNG export terminals for approval, with more LNG facilities in the early planning stages. It is unclear how many additional natural gas liquefaction facilities will move into the construction phase, or when that might happen, particularly as questions have been raised about how recent low oil prices could affect LNG markets. In its Annual Energy Outlook 2015 Reference case, released two days ago, EIA projects that LNG exports from the Lower 48 states will reach 7 Bcf/d by 2022. These five projects alone, if all go into operation at their fully rated capacity, will exceed EIA's projection of LNG exports by 2 Bcf/d.

The first U.S. LNG export facility to file for FERC approval, and begin construction, was Sabine Pass in Louisiana. This four-train facility received approval to export 2.2 Bcf/d, and is scheduled to enter service by late 2015, with full capacity projected to be online in 2016.

Cameron LNG in Louisiana is slated to be a three-train LNG export terminal that will be capable of exporting 1.7 Bcf/d of LNG, much of which is contracted to its partners. Construction on this project began in October 2014, with commercial operation expected to begin in 2018.

The Cove Point facility in Maryland began LNG import operations nearly 40 years ago, but the marine terminal has been mothballed for much of the time since then. However, the cryogenic tanks have been used for storage. The export project, which will add a single 0.82-Bcf/d train, is targeted to begin operations in late 2017. Construction of the off-site facilities supporting this project began in late October 2014, and a ceremonial groundbreaking at the on-site facilities occurred earlier this month.

The Freeport LNG and Corpus Christi LNG terminals, both in Texas, have respective capacities of 1.8 Bcf/d and 2.14 Bcf/d. Freeport LNG began construction of its three-train facility in November 2014, while construction of the Corpus Christi three-train LNG export terminal, which will include construction and operation of a 23-mile long, 48-inch diameter, bidirectional pipeline, is expected to start soon. Both facilities are scheduled for commercial service in 2018.

Even before operations begin, expansions are in the works for Sabine Pass and Cameron. Both asked FERC for two additional LNG liquefaction trains. The Sabine Pass expansion, approved by FERC on April 6, will add additional capacity of 1.3 Bcf/d, while the Cameron LNG expansion will add 1.4 Bcf/d of capacity, if approved.

Overview:

(For the Week Ending Wednesday, April 15, 2015)

Natural gas prices fell slightly at most market locations during the report week (Wednesday, April 8 — Wednesday, April 15). Henry Hub spot prices fell from $2.67 per million British thermal unit (MMBtu) last Wednesday to $2.58/MMBtu yesterday.
At the New York Mercantile Exchange (Nymex), the near-month (May 2015) natural gas contract lost less than a penny, declining from $2.619/MMBtu last Wednesday to $2.610/MMBtu yesterday.
Working natural gas in storage increased to 1,539 Bcf as of Friday, April 10, according to the U.S. Energy Information Administration (EIA) Weekly Natural Gas Storage Report (WNGSR). A net injection into storage of 63 Bcf for the week resulted in storage levels 81.7% above year-ago levels and 8.6% below the five-year average for this week.
Total rigs fell by 40 units to 988 as of April 10, according to data reported by Baker Hughes Inc. The last time total rigs were less than 1,000 was in August 2009. Oil rigs fell by 42 units to 760, while gas rigs rose by 3 to 225. The miscellaneous rig count fell by 1 unit.
The natural gas plant liquids composite price fell 2.5%, a 14¢ decline, for the week ending April 10, from $5.49/MMBtu to $5.35/MMBtu from Friday to Friday. This was driven by a decrease in the price of ethane, which fell 8¢ from $2.33/MMBtu to $2.25/MMBtu. Natural gasoline and propane prices also fell, by 6.0% and 1.1%, respectively. The price of butane and isobutane rose by 0.6% and 1.1%, respectively.

more summary data

Prices/Demand/Supply:

Mild temperatures lead to modest price declines. Prices remained relatively low at most market locations during an uneventful week with mild temperatures and relatively low demand from both the heating and cooling sectors in most regions. Henry Hub spot prices fell from $2.67/MMBtu last Wednesday to $2.58/MMBtu yesterday, and price movements across much of the country were similar. At the Chicago Citygate, prices fell from $2.60/MMBtu last Wednesday to $2.54/MMBtu yesterday, hitting a weekly low of $2.48/MMBtu on Friday. At the PG&E Citygate in San Francisco, prices fell from $2.91/MMBtu last Wednesday to $2.86/MMBtu yesterday.

Northeast prices fluctuate. Prices in the Northeast fell week over week, dropped more than other areas, and traded in a broader range. Prices at the Algonquin Citygate, which serves Boston, began the week at $3.58/MMBtu last Wednesday, rose to $3.82/MMBtu the next day, then ended the week at $2.60/MMBtu. At Transcontinental Pipeline's Zone 6 trading point for New York City, prices began the week at $2.73/MMBtu, fell to $1.83/MMBtu on Friday, then ended the week at $2.26/MMBtu.

Marcellus prices remain low. Prices at most Marcellus locations declined this week. At Tennessee's Zone 4 Marcellus trading location, prices dropped from $1.51/MMBtu last Wednesday to $1.43/MMBtu yesterday. On the Transco Leidy Line, prices fell from $1.67/MMBtu last Wednesday to $1.49/MMBtu yesterday. At the Dominion South trading point, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices fell from $1.73/MMBtu to $1.50/MMBtu.

Nymex prices flat. The near-month (May 2015) Nymex contract fell from $2.619/MMBtu last Wednesday to $2.610/MMBtu yesterday. The contract dropped to $2.511/MMBtu on Friday before mostly recovering its losses at the end of the report week. The 12-month strip (the average of the 12 contracts between May 2015 and April 2016) fell from $2.895/MMBtu last Wednesday to $2.864/MMBtu yesterday.

Total supply remains flat. Total supply this week was flat over last week, but 8.8% greater than the same week last year. Dry production declined by 0.1% week over week, but was 7.8% greater than the same time last year. Imports from Canada increased 2.4% week over week, with a 15.6% increase occurring in the Midwest. LNG sendout remained at minimal levels, making up a fraction of a percent of total supply.

Consumption declines. Total consumption fell by 3.8% week over week, with declines coming in the industrial and residential/commercial sectors. Industrial consumption fell by 1.3%, while residential/commercial consumption fell by 13.1% as temperatures warmed up. Power consumption increased 3.9%, likely reflecting small amounts of cooling demand.

more price data

Storage

This week's storage injections increase from the previous week. The net injection reported for the week ending April 10 was 63 Bcf, up from 15 Bcf last week. This compares with the five-year average net increase of 35 Bcf for that week and last year's net increase of 22 Bcf. Working gas inventories for the storage week totaled 1,539 Bcf, 692 Bcf (81.7%) higher than last year at this time and 145 Bcf (8.6%) lower than the five-year (2010-14) average.

Storage injections exceed market expectations. Market expectations, on average, called for a build of 53 Bcf. With the larger-than-expected injection, when the EIA storage report was released, at 10:30 a.m. on April 16, the price for the May natural gas futures contract decreased 5¢ to around $2.55/MMBtu in trading on the Nymex.

Only the West region reports a net withdrawal for the week. The West region had a net withdrawal of 2 Bcf, while over the past five years it had an average net injection of 3 Bcf for the same week. Both the East and Producing regions had net injections of 15 Bcf (1 Bcf lower than its five-year average net injection) and 50 Bcf (35 Bcf greater than its five-year average net injection), respectively. The East and Producing regions' inventories are below their five-year averages by 181 Bcf (25.9%) and 42 Bcf (5.9%), respectively. In contrast, stock levels in the West region are above its five-year average for the week, by 78 Bcf (28.4%). Storage levels for the East, West, and Producing regions are above their year-ago levels by 209 Bcf, 186 Bcf, and 297 Bcf, respectively.

Temperatures during the storage report week warmer than normal. Temperatures in the Lower 48 states averaged 53.3° for the storage report week, 3.1° warmer than the 30-year normal temperature and 2.3° warmer than the average temperature during the same week last year. There were 94 population-weighted heating degree days during the storage report week, 13 higher than the five-year average and 11 fewer than during the same period last year.

more storage data

Spot Prices ($/MMBtu)	Thu, 09-Apr	Fri, 10-Apr	Mon, 13-Apr	Tue, 14-Apr	Wed, 15-Apr
Henry Hub	2.63	2.55	2.56	2.55	2.58
New York	2.16	1.83	2.07	2.26	2.26
Chicago	2.62	2.48	2.51	2.52	2.54
Cal. Comp. Avg,*	2.58	2.47	2.52	2.53	2.55
Futures ($/MMBtu)
May contract	2.528	2.511	2.511	2.530	2.610
June contract	2.577	2.558	2.548	2.572	2.649
*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: (4/8/15 - 4/15/15)
	Percent change for week compared with:
	last year	last week
Gross production	7.86%	-0.12%
Dry production	7.79%	-0.12%
Canadian imports	27.07%	2.39%
West (net)	36.14%	3.14%
Midwest (net)	25.16%	15.59%
Northeast (net)	-68.56%	-81.99%
LNG imports	-64.87%	-7.25%
Total supply	8.76%	0.04%
Source: BENTEK Energy LLC

U.S. consumption - Gas Week: (4/8/15 - 4/15/15)
	Percent change for week compared with:
	last year	last week
U.S. consumption	3.2%	-3.8%
Power	17.7%	3.9%
Industrial	-1.8%	-1.3%
Residential/commercial	-4.8%	-13.1%
Total demand	3.6%	-3.7%
Source: BENTEK Energy LLC

Rigs
	Fri, April 10, 2015	Change from
	Fri, April 10, 2015	last week	last year
Oil rigs	760	-5.24%	-49.90%
Natural gas rigs	225	1.35%	-27.42%
Miscellaneous	3	-25.00%	-25.00%

Rig numbers by type
	Fri, April 10, 2015	Change from
	Fri, April 10, 2015	last week	last year
Vertical	128	-5.88%	-67.26%
Horizontal	770	-3.63%	-37.09%
Directional	90	-3.23%	-58.33%
Source: Baker Hughes Inc.

Working gas in underground storage
	Stocks billion cubic feet (bcf)
Region	2015-04-10	2015-04-03	change
East	519	504	15
West	353	355	-2
Producing	667	617	50
Total	1,539	1,476	63
Source: U.S. Energy Information Administration

Working gas in underground storage
	Historical comparisons
	Year ago (4/10/14)		5-year average (2010-2014)
Region	Stocks (Bcf)	% change	Stocks (Bcf)	% change
East	310	67.4	700	-25.9
West	167	111.4	275	28.4
Producing	370	80.3	709	-5.9
Total	847	81.7	1,684	-8.6
Source: U.S. Energy Information Administration

Temperature -- heating & cooling degree days (week ending Apr 09)
		HDD deviation from:			CDD deviation from:
Region	HDD Current	normal	last year	CDD Current	normal	last year
New England	169	14	19	0	0	0
Middle Atlantic	130	-8	-9	0	0	0
E N Central	117	-25	-31	0	0	0
W N Central	124	-11	-17	2	1	2
South Atlantic	46	-26	-17	30	17	10
E S Central	38	-28	-24	18	13	15
W S Central	16	-18	-27	42	26	27
Mountain	112	-15	-7	4	-2	-1
Pacific	80	5	26	0	-2	-3
United States	94	-14	-11	12	8	5
Note: HDD = heating degree-day; CDD = cooling degree-day Source: National Oceanic and Atmospheric Administration