In the News:
Global LNG trade sets another record in 2019, recording the highest-ever annual growth
Global trade in liquefied natural gas (LNG) set another record in 2019, reaching 46.7 billion cubic feet per day (Bcf/d), according to the recently released The LNG Industry GIIGNL Annual Report 2020 by the International Group of Liquefied Natural Gas Importers (GIIGNL). Total trade increased by 5.4 Bcf/d (13%) compared with 2018, the largest annual increase on record. Spot and short-term trade increased by 2.6 Bcf/d (20%) in 2019 over the previous year and accounted for 34% of the total global LNG trade.
In the past five years, global LNG trade has increased by 45% (15.2 Bcf/d), led primarily by capacity additions in Australia, the United States, and Russia, which combined accounted for more than 90% of the global growth in liquefaction capacity during this period. In 2019, Australia completed its massive capacity buildout program and became the world’s largest LNG exporter for several months, overtaking Qatar. The United States continued commissioning new liquefaction trains in 2019, including Train 2 at Corpus Christi, the first two trains at Cameron LNG and Freeport LNG, and the first five small modular liquefaction units at Elba Island, adding a combined 3.3 Bcf/d of new liquefaction capacity. Russia continued to ramp up production at Yamal LNG and commissioned a small-scale liquefaction facility, Vysotsk LNG (0.09 Bcf/d capacity).
Asian countries continued to account for the largest share of global LNG imports (69%), increasing imports by a combined 1 Bcf/d in 2019 compared to 2018. All countries in Asia increased LNG imports except Japan, South Korea, and Taiwan, where milder winter weather, competition from coal-fired generation, and the restart of several nuclear reactors in Japan led to a decline in LNG imports by a combined 1.3 Bcf/d. China, after becoming the world’s second-largest LNG importer in 2017 and world’s largest natural gas importer in 2018, continued to implement government-supported coal-to-natural gas switching policies to reduce air pollution, which led to an increase in LNG imports by 1 Bcf/d in 2019 compared to 2018.
LNG imports in Europe almost doubled in 2019 compared to 2018, reaching 11.3 Bcf/d, an increase of 4.9 Bcf/d (76%)—the largest volume of European LNG imports on record. All LNG-importing countries in Europe increased their volumes, led by the United Kingdom (UK), France, Spain, and Italy, which increased imports by 1.1 Bcf/d, 1.0 Bcf/d, 0.7 Bcf/d, and 0.5 Bcf/d, respectively. Competitive LNG prices, strong demand growth in the power generation sector, and continuous decline in natural gas production in the UK and the Netherlands led to larger volumes of LNG imports in Europe year on year.
Spot and short-term trade (defined as trade under contracts with a duration of 4 years or less) reached 15.7 Bcf/d, an increase of 2.6 Bcf/d (20%) compared to the previous year. The largest increase in spot trade was in exports from the United States, the United Arab Emirates, and Australia. Qatar, one of the largest exporters in the global spot market, reduced spot exports by 50% in 2019.
Overview:
(For the week ending Wednesday, April 22, 2020)
- Natural gas spot prices rose at most locations this report week (Wednesday, April 15 to Wednesday, April 22). The Henry Hub spot price rose from $1.64 per million British thermal units (MMBtu) last Wednesday to $1.87/MMBtu yesterday.
- At the New York Mercantile Exchange (Nymex), the price of the May 2020 contract increased 34¢, from $1.598/MMBtu last Wednesday to $1.939/MMBtu yesterday. The price of the 12-month strip averaging May 2020 through April 2021 futures contracts climbed 25¢/MMBtu to $2.549/MMBtu.
- Net injections to working gas totaled 43 billion cubic feet (Bcf) for the week ending April 17. Working natural gas stocks total 2,140 Bcf, which is 63% more than the year-ago level and 20% more than the five-year (2015–19) average for this week.
- The natural gas plant liquids (NGPL) composite price at Mont Belvieu, Texas, rose by 20¢/MMBtu, averaging $3.02/MMBtu for the week ending April 22. The prices of natural gasoline, butane, and isobutane fell by 1%, 3%, and 6%, respectively. The price of propane rose by 8%. The ethane price rose by 21% last week over concerns around declining crude oil production, declining associated NGPL production in west Texas, and access to ethane feedstock for Gulf Coast petrochemical producers.
- According to Baker Hughes, for the week ending Tuesday, April 14, the natural gas rig count decreased by 7 to 89, the lowest level since September 2016. The number of oil-directed rigs fell by 66 to 438. The total rig count decreased by 73, and it now stands at 529.
Prices/Supply/Demand:
Prices rise at most locations with unseasonably cool temperatures. This report week (Wednesday, April 15 to Wednesday, April 22), the Henry Hub spot price rose 23¢ from $1.64/MMBtu last Wednesday to a high of $1.87/MMBtu yesterday. Temperatures across most of the Lower 48 states were cooler than normal. At the Chicago Citygate, the price increased 22¢ from $1.63/MMBtu last Wednesday to a high of $1.85/MMBtu yesterday.
California prices are mixed. The price at SoCal Citygate in Southern California increased 18¢ from $1.51/MMBtu last Wednesday to a high of $1.69/MMBtu yesterday. The price at PG&E Citygate in Northern California fell 6¢, down from $2.36/MMBtu last Wednesday to $2.30/MMBtu yesterday.
Northeast prices rise with colder temperatures. At the Algonquin Citygate, which serves Boston-area consumers, the price went up 24¢ from $1.75/MMBtu last Wednesday to $1.99/MMBtu yesterday. At the Transcontinental Pipeline Zone 6 trading point for New York City, the price increased 26¢ from $1.55/MMBtu last Wednesday to a high of $1.81/MMBtu yesterday. Temperatures in Northeast demand markets were 8 degrees to 10 degrees Fahrenheit (°F) lower than average at the end of the report week, which resulted in increased demand for space heating.
The Tennessee Zone 4 Marcellus spot price increased 22¢ from $1.39/MMBtu last Wednesday to $1.61/MMBtu yesterday. The price at Dominion South in southwest Pennsylvania rose 20¢ from $1.42/MMBtu last Wednesday to $1.62/MMBtu yesterday.
Permian Basin prices end the week in positive territory. The price at the Waha Hub in West Texas, which is located near Permian Basin production activities, averaged $0.29/MMBtu last Wednesday, $1.35/MMBtu lower than the Henry Hub price. Yesterday, the price at the Waha Hub averaged a high of $1.21/MMBtu, 66¢/MMBtu lower than the Henry Hub price. On Monday, Waha closed at a weekly low of -$4.74/MMBtu, after dropping to less than -$10/MMBtu during intraday trading, the lowest price on record. The decline corresponds to the start of planned maintenance on the El Paso Natural Gas Pipeline at Cornudas, Texas—west of the Waha hub. This planned outage, which is expected to continue through May 1, has decreased westbound takeaway capacity on the system’s south mainline by 237 million cubic feet per day (MMcf/d).
Supply is down. According to data from IHS Markit, the average total supply of natural gas fell by 1% compared with the previous report week. Dry natural gas production remained unchanged week over week. Average net imports from Canada decreased by 6% from last week.
Demand falls, driven by declines in power generation. Total U.S. consumption of natural gas fell by 3% compared with the previous report week, according to data from IHS Markit. Natural gas consumed for power generation declined by 6% week over week. Industrial sector consumption decreased by 3% week over week. In the residential and commercial sectors, consumption remained at last week's level, averaging 22.1 Bcf/d. Natural gas exports to Mexico increased 3%.
U.S. LNG exports decrease week over week. Thirteen LNG vessels (seven from Sabine Pass, two each from Cove Point and Corpus Christi, and one each from Cameron and Freeport) with a combined LNG-carrying capacity of 48 Bcf departed the United States between April 16 and April 22, 2020, according to shipping data provided by MarineTraffic.com.
Storage:
Net injections into storage totaled 43 Bcf for the week ending April 17, compared with the five-year (2015–19) average net injections of 49 Bcf and last year's net injections of 92 Bcf during the same week. Working natural gas stocks total 2,140 Bcf, which is 364 Bcf more than the five-year average and 827 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 11 Bcf to 51 Bcf, with a median estimate of 45 Bcf.
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, 16-Apr |
Fri, 17-Apr |
Mon, 20-Apr |
Tue, 21-Apr |
Wed, 22-Apr |
|---|---|---|---|---|---|
| Henry Hub |
1.55 |
1.70 |
1.71 |
1.87 |
1.87 |
| New York |
1.41 |
1.51 |
1.69 |
1.81 |
1.81 |
| Chicago |
1.53 |
1.72 |
1.74 |
1.84 |
1.85 |
| Cal. Comp. Avg.* |
1.62 |
1.65 |
1.66 |
1.78 |
1.76 |
| Futures ($/MMBtu) | |||||
| May contract | 1.686 |
1.753 |
1.924 |
1.821 |
1.939 |
| June contract |
1.845 |
1.903 |
2.049 |
1.984 |
2.053 |
| *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: (4/16/20 - 4/22/20) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| Marketed production | 105.5 |
106.0 |
101.6 |
| Dry production | 93.3 |
93.8 |
90.4 |
| Net Canada imports | 4.2 |
4.5 |
4.5 |
| LNG pipeline deliveries | 0.1 |
0.1 |
0.1 |
| Total supply | 97.6 |
98.3 |
95.0 |
|
Source: IHS Markit | |||
| U.S. natural gas consumption - Gas Week: (4/16/20 - 4/22/20) | |||
|---|---|---|---|
Average daily values (Bcf/d): |
|||
this week |
last week |
last year |
|
| U.S. consumption | 66.7 |
68.7 |
62.4 |
| Power | 24.4 |
25.9 |
22.9 |
| Industrial | 20.2 |
20.8 |
21.9 |
| Residential/commercial | 22.1 |
22.1 |
17.6 |
| Mexico exports | 4.6 |
4.5 |
4.0 |
| Pipeline fuel use/losses | 6.4 |
6.5 |
6.2 |
| LNG pipeline receipts | 8.2 |
8.5 |
5.2 |
| Total demand | 86.0 |
88.2 |
77.8 |
|
Source: IHS Markit | |||
| Rigs | |||
|---|---|---|---|
Tue, April 14, 2020 |
Change from |
||
last week |
last year |
||
| Oil rigs | 438 |
-13.1% |
-46.9% |
| Natural gas rigs | 89 |
-7.3% |
-52.4% |
| Note: Excludes any miscellaneous rigs | |||
| Rig numbers by type | |||
|---|---|---|---|
Tue, April 14, 2020 |
Change from |
||
last week |
last year |
||
| Vertical | 18 |
-51.4% |
-71.4% |
| Horizontal | 483 |
-32.0% |
-47.8% |
| Directional | 28 |
-40.4% |
-50.9% |
| Source: Baker Hughes Inc. | |||
| Working gas in underground storage | ||||
|---|---|---|---|---|
Stocks billion cubic feet (Bcf) |
||||
| Region | 2020-04-17 |
2020-04-10 |
change |
|
| East | 400 |
400 |
0 |
|
| Midwest | 493 |
487 |
6 |
|
| Mountain | 96 |
95 |
1 |
|
| Pacific | 210 |
203 |
7 |
|
| South Central | 941 |
912 |
29 |
|
| Total | 2,140 |
2,097 |
43 |
|
|
Source: Form EIA-912, Weekly Underground Natural Gas Storage Report | ||||
| Working gas in underground storage | |||||
|---|---|---|---|---|---|
Historical comparisons |
|||||
Year ago (4/17/19) |
5-year average (2015-2019) |
||||
| Region | Stocks (Bcf) |
% change |
Stocks (Bcf) |
% change |
|
| East | 244 |
63.9 |
285 |
40.4 |
|
| Midwest | 261 |
88.9 |
360 |
36.9 |
|
| Mountain | 69 |
39.1 |
114 |
-15.8 |
|
| Pacific | 135 |
55.6 |
217 |
-3.2 |
|
| South Central | 603 |
56.1 |
801 |
17.5 |
|
| Total | 1,313 |
63.0 |
1,776 |
20.5 |
|
| Source: Form EIA-912, Weekly Underground Natural Gas Storage Report | |||||
| Temperature – heating & cooling degree days (week ending Apr 16) | ||||||||
|---|---|---|---|---|---|---|---|---|
HDD deviation from: |
CDD deviation from: |
|||||||
| Region | HDD Current |
normal |
last year |
CDD Current |
normal |
last year |
||
| New England | 141 |
2 |
41 |
0 |
0 |
0 |
||
| Middle Atlantic | 136 |
14 |
54 |
0 |
0 |
0 |
||
| E N Central | 169 |
44 |
53 |
0 |
0 |
0 |
||
| W N Central | 188 |
72 |
53 |
0 |
-1 |
-1 |
||
| South Atlantic | 76 |
16 |
46 |
30 |
16 |
2 |
||
| E S Central | 94 |
39 |
60 |
0 |
-5 |
-8 |
||
| W S Central | 55 |
29 |
23 |
14 |
-5 |
-6 |
||
| Mountain | 159 |
43 |
34 |
0 |
-7 |
-2 |
||
| Pacific | 72 |
4 |
5 |
0 |
-3 |
0 |
||
| United States | 123 |
29 |
40 |
7 |
2 |
-1 |
||
|
Note: HDD = heating degree day; CDD = cooling degree day Source: National Oceanic and Atmospheric Administration | ||||||||
Average temperature (°F)
7-day mean ending Apr 16, 2020
Source: National Oceanic and Atmospheric Administration
Deviation between average and normal (°F)
7-day mean ending Apr 16, 2020
Source: National Oceanic and Atmospheric Administration
