U.S. Energy Information Administration logo

Natural Gas

‹ See the most recent Natural Gas Weekly Update

Natural Gas Weekly Update

for week ending August 19, 2015   |  Release date:  August 20, 2015   |  Next release:  August 27, 2015   |   Previous weeks

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

In the News:

Jamaica inks contract to get LNG from Florida

Jamaica Public Service (JPS), Jamaica's electricity distributor, and New Fortress Energy, an energy service provider and a subsidiary of the American based Fortress Investment Group, entered into a contract for New Fortress Energy to deliver containerized liquefied natural gas (LNG) from Florida to JPS's 120-megawatt (MW) Bogue power plant in Montego Bay, Jamaica.

This August 7 agreement was preceded by a joint commitment by the U.S. Department of Energy and the government of Jamaica, signed at the April 2015 United States and Caribbean Community (CARICOM) summit, which supported Jamaica's fuel diversification and shift to natural gas. It is considered by the Jamaican government and New Fortress Energy as the first step in establishing a potential LNG hub in Jamaica to meet the emerging LNG needs of the western Caribbean.

The Bogue power plant, which first went into service in 2003 as a 120-MW oil-fired generator, is being converted to allow for gas-fired generation, and is undergoing infrastructure work to allow for the receipt of containerized LNG, including the addition of regasification facilities. JPS anticipates bringing the converted Bogue power plant online in early 2016.

New Fortress Energy will provide LNG from its affiliate American LNG Marketing LLC, which is developing natural gas liquefaction facilities at two Florida locations. The first, in Medley, Florida, now under construction, is near the Port of Miami, and the second, in Titusville near Port Canaveral, will begin construction shortly. These facilities include small-scale liquefaction, and LNG will be transported in truck or rail mounted containers (see photos), then loaded onto container ships or roll-on/roll-off oceangoing carriers from ports near the American LNG Florida locations.

American LNG has received authorization from DOE to export containerized LNG to free trade agreement (FTA) and non-FTA nations, the latter of which will allow shipments to Jamaica. American LNG's two facilities received FTA approvals, allowing for shipments of containerized LNG totaling approximately 33 billion cubic feet per year (Bcf/y). On August 7, the company received approval to export up to 3.02 Bcf/y of gas to non-FTA countries, including Jamaica, from the Medley location. Currently, only the Medley facility is approved for shipping to non-FTA nations, while the Titusville location, with its larger capacity of 30 Bcf/y, is approved for FTA shipments.

The 40-foot long, 8-foot square ISO pressure-transfer container, often chosen for these tasks, is designed to be stacked and secured as cargo on sea going container vessels and barges, or mounted on truck/train frames for transport. They hold approximately 11,500 gallons of LNG (0.95 million cubic feet of natural gas) and can remain in service for between 50 and 60 days, depending on the model's pressure ratings.

In addition to New Fortress Energy's American LNG, other companies, such as Clean Energy in Newport Beach, California and Crowley Maritime in Jacksonville, Florida, are providing containerized LNG to Puerto Rico, Alaska, and Hawaii as part of the expanding small scale LNG industry. This emerging industry segment is positioning to deliver LNG from the United States to FTA and non-FTA nations with locations out of reach to the larger commercial LNG tankers, which typically hold the equivalent of 3 Bcf of natural gas.

Overview:

(For the Week Ending Wednesday, August 19, 2015)

  • Prices of natural gas declined in most market locations across the country over the report week (Wednesday, August 12, through Wednesday, August 19), and remained relatively low. The Henry Hub spot price began the week at $2.91 per million British thermal units (MMBtu) last Wednesday and ended the week at $2.73/MMBtu.
  • At the New York Mercantile Exchange (Nymex), the price of the near-month futures contract (September 2015) declined from $2.931/MMBtu last Wednesday to $2.716/MMBtu yesterday.
  • Working natural gas in storage increased to 3,030 Bcf as of Friday, August 14. A net injection into storage of 53 Bcf for the week resulted in storage levels 19% above a year ago and 3% above the five-year average for this week.
  • The total oil and natural gas rig count remained unchanged from the previous week at 884 units for the week ending Friday, August 14, and was 1,029 rigs below the same week in 2014, according to data from Baker Hughes Incorporated. The oil rig count increased by 2 units to 672, and the natural gas rig count declined by 2 to 211 units.
  • The natural gas plant liquids composite price at Mont Belvieu increased by 8¢/MMBtu to $4.48/MMBtu for the week ending August 14. All components of the composite price increased. Natural gasoline prices increased the most, by 1.6% (14¢), while prices of ethane, propane, butane, and isobutane increased by 2.0%, 1.5%, 2.8%, and 1.7%, respectively.

more summary data

Prices/Demand/Supply:

Prices decline in most market locations amid cooler weather. Natural gas prices decreased in most market locations last week, as cooler temperatures moved in across most of the country. The Henry Hub spot price began the report week at $2.91/MMBtu last Wednesday and settled yesterday at $2.73/MMBtu. Prices at other market locations also declined. In the West, prices at PG&E Citygate, serving Northern California, fell by 3% from $3.28/MMBtu last Wednesday to $3.18/MMBtu yesterday. Prices at the Chicago Citygate decreased by 4% Wednesday-to-Wednesday, closing yesterday at $2.85/MMBtu.

New England prices increase Wednesday-to-Wednesday. In the Northeast, prices fluctuated during the report week in response to varying temperatures, increasing in New England, and falling or remaining relatively flat elsewhere. Gas prices at the Algonquin Citygate, which serves Boston, started the report week at $2.38/MMBtu, increased to $3.22/MMBtu on Monday, amid above-average temperatures, and settled at $2.62/MMBtu yesterday as the heat receded. Similarly, at the Tennessee Zone 6 200L serving lower New England, prices fluctuated during the report week, starting last Wednesday at $2.30/MMBtu, increasing to $3.18/MMBtu on Monday, and settling yesterday at $2.53/MMBtu. At Transcontinental Pipeline's Zone 6 trading point for New York City delivery, the spot price remained essentially unchanged, starting the report week at $2.74/MMBtu, and settling yesterday at $2.73/MMBtu.

Marcellus prices fall below $1. Already-low Marcellus-area prices declined in all trading locations through the week, possibly because of maintenance on several Marcellus-area pipelines. At Tennessee's Zone 4 Marcellus location, prices declined by 50¢, from $1.28/MMBtu last Wednesday to 78¢/MMBtu yesterday. On the Transco Leidy Line, prices declined by 51¢ (40%), from $1.28/MMBtu last Wednesday to 77¢/MMBtu yesterday. At Dominion South, which serves customers in portions of Pennsylvania, Ohio, Maryland, West Virginia, and Virginia, prices decreased by 22%, from $1.56/MMBtu to $1.22/MMBtu.

Nymex prices decline. At the Nymex, the September contract began the week at $2.931/MMBtu and fell 21.5¢ to close at $2.716/MMBtu yesterday. The 12-month strip, which averages the September 2015 through August 2016 Nymex prices, closed at $2.933/MMBtu yesterday, down 17.1¢/MMBtu from the week-ago price.

Supply increases slightly. Dry natural gas production increased by 0.3% this week and averaged 72.0 billion cubic feet per day (Bcf/d), 4% higher than last year's levels, according to Bentek Energy data. Imports of natural gas from Canada increased by 21%, led by a 28% increase in imports to the Midwestern part of the country as flows on the Alliance pipeline resumed on August 13 and deliveries returned to normal levels after conditions were remedied that forced the company to declare force majeure. LNG sendout increased by 18%, but remains a small contributor to supply. Overall, supply increased by nearly 2% week over week and averaged 78.1 Bcf/d.

Consumption increases. U.S. consumption increased by 2% overall, compared to the last report week, led by a 7% increase in the residential/commercial sector. Consumption of natural gas for power generation (power burn) increased slightly, by 1% during the report week, and was 23% higher than the same week last year. The largest week-over-week percent increase in power burn was in the Midwest, where consumption increased by 26%, while consumption in the Midcontinent, Texas, and Southeast declined by 10%, 10%, and 7%, respectively. Industrial consumption declined slightly by 0.2%, and was 2% lower than the same week last year. Exports to Mexico averaged 2.9 Bcf/d, a 6% increase over the previous week, and 24% higher than exports for the same week last year.

more price data

Storage

Net storage injection is lower than both the five-year average and last year's builds. The net injection reported for the week ending August 14 was 53 Bcf, down from 65 Bcf the previous week. This compares with the five-year average increase of 54 Bcf for the week and last year's increase of 86 Bcf. Working gas inventories for the storage week totaled 3,030 Bcf, 488 Bcf (19%) higher than last year at this time and 80 Bcf (3%) higher than the five-year (2010-14) average.

Storage injections are lower than market expectations. Market expectations, on average, called for a build of 59 Bcf. When the EIA storage report was released at 10:30 a.m. on August 20, the price for the September natural gas futures contract rose about 4¢ to around $2.77/MMBtu in Nymex futures trading.

From the week ending April 3 (the beginning of the injection season) through the week ending August 14, net storage injections totaled 1,569 Bcf, or 140 Bcf less than the 1,709 Bcf injected during the same 20 weeks in 2014. During these weeks for the years 2010-14, net injections into storage averaged 1,299 Bcf. The estimated average unit value of the natural gas storage holders put into storage from April 3 to August 14 this year is $2.77/MMBtu, 37% lower than the average value of $4.40/MMBtu for the same 20 weeks last year. The highest winter-month Nymex price (for the January 2016 contract) in trading for the week ending August 14 averaged $3.22/MMBtu. This price is 38¢/MMBtu more than the September Nymex contract price. A year ago, the difference was 33¢/MMBtu.

Temperatures during the storage report week were close to normal. Temperatures in the Lower 48 states averaged 75° for the storage report week, similar to the 30-year normal temperature and 1° warmer than the average temperature during the same week last year. There were 71 population-weighted cooling degree days (CDD) this report week, 5 CDD fewer than the five-year average and 7 CDD more than during this week last year.

more storage data

See also:



Natural gas spot prices
Spot Prices ($/MMBtu)
Thu,
13-Aug
Fri,
14-Aug
Mon,
17-Aug
Tue,
18-Aug
Wed,
19-Aug
Henry Hub
2.92
2.83
2.76
2.71
2.73
New York
2.77
2.93
2.86
2.72
2.73
Chicago
3.01
2.90
2.86
2.85
2.85
Cal. Comp. Avg,*
3.07
2.98
2.94
2.89
2.90
Futures ($/MMBtu)
September contract
2.787
2.801
2.728
2.704
2.716
October contract
2.820
2.837
2.767
2.740
2.747
*Avg. of NGI's reported prices for: Malin, PG&E citygate, and Southern California Border Avg.
Source: NGI's Daily Gas Price Index
Natural gas futures prices
Natural gas liquids spot prices


U.S. natural gas supply - Gas Week: (8/12/15 - 8/19/15)
Percent change for week compared with:
 
last year
last week
Gross production
4.19%
0.34%
Dry production
4.15%
0.34%
Canadian imports
14.12%
20.53%
      West (net)
24.84%
3.34%
      Midwest (net)
-6.52%
27.58%
      Northeast (net)
-110.73%
-109.28%
LNG imports
207.57%
17.85%
Total supply
5.10%
1.67%
Source: BENTEK Energy LLC
U.S. consumption - Gas Week: (8/12/15 - 8/19/15)
Percent change for week compared with:
 
last year
last week
U.S. consumption
10.1%
1.6%
Power
23.2%
1.1%
Industrial
-1.6%
-0.2%
Residential/commercial
-1.2%
6.6%
Total demand
10.6%
1.8%
Source: BENTEK Energy LLC
Natural gas supply


Weekly natural gas rig count and average Henry Hub
Rigs
Fri, August 14, 2015
Change from
 
last week
last year
Oil rigs
672
0.30%
-57.71%
Natural gas rigs
211
-0.94%
-34.27%
Miscellaneous
1
0.00%
-66.67%
Rig numbers by type
Fri, August 14, 2015
Change from
 
last week
last year
Vertical
127
-1.55%
-65.49%
Horizontal
676
0.60%
-49.13%
Directional
81
-2.41%
-62.50%
Source: Baker Hughes Inc.


Working gas in underground storage
Stocks
billion cubic feet (bcf)
Region
2015-08-14
2015-08-07
change
East
1,457
1,407
50
West
475
471
4
Producing
1,098
1,099
-1
Total
3,030
2,977
53
Source: U.S. Energy Information Administration
Working gas in underground storage
Historical comparisons
Year ago
(8/14/14)
5-year average
(2010-2014)
Region
Stocks (Bcf)
% change
Stocks (Bcf)
% change
East
1,333
9.3
1,516
-3.9
West
406
17.0
458
3.7
Producing
804
36.6
975
12.6
Total
2,542
19.2
2,950
2.7
Source: U.S. Energy Information Administration


Temperature -- heating & cooling degree days (week ending Aug 13)
 
HDD deviation from:
 
CDD deviation from:
Region
HDD Current
normal
last year
CDD Current
normal
last year
New England
3
-1
0
25
-15
1
Middle Atlantic
2
-1
-1
42
-12
4
E N Central
2
-2
-3
43
-8
10
W N Central
0
-3
-3
65
1
18
South Atlantic
0
0
0
94
1
7
E S Central
0
0
-1
93
3
6
W S Central
0
0
0
151
28
21
Mountain
0
-3
0
79
8
8
Pacific
0
-2
0
49
3
-8
United States
1
-2
-1
71
1
7
Note: HDD = heating degree-day; CDD = cooling degree-day

Source: National Oceanic and Atmospheric Administration

Average temperature (°F)

7-Day Mean ending Aug 13, 2015

Mean Temperature (F) 7-Day Mean ending Aug 13, 2015

Source: NOAA/National Weather Service

Deviation between average and normal (°F)

7-Day Mean ending Aug 13, 2015

Mean Temperature Anomaly (F) 7-Day Mean ending Aug 13, 2015

Source: NOAA/National Weather Service