US emerges as net exporter of natural gas

In a historic first, the US in early November began seeing small net volumes of natural gas exports that recently climbed above 1 Bcf/d, an analysis of data from Platts Analytics’ Bentek Energy showed Monday.

The emergence and rapid acceleration in export volumes comes amid a recent decline in Canadian imports and a ramp up in feedgas volumes delivered to the Sabine Pass LNG export terminal.

In November, imports of Canadian gas have averaged just 4.5 Bcf/d and are down 21% from imports that averaged 5.7 Bcf/d in October.

Over the same period, feedgas deliveries to Sabine Pass have climbed to record highs, averaging 1.5 Bcf/d month to date, up from an average 249 MMcf/d in October.

On Monday, preliminary data showed the US exporting about 910 MMcf of gas.

CANADIAN PRICES, SABINE RESTART SHIFT GAS BALANCE

The balance of gas imports and exports that began shifting in November was accompanied by a recent rise in Canadian gas prices and the restart of liquefaction processes at Sabine Pass.

In November, prices at Canada’s AECO hub in Alberta have climbed to an average 36 cents/MMBtu discount to Henry Hub and are up 40% from an average 60-cent discount in October, S&P Global Platts data showed.

From the start of November, rising Canadian gas prices have prompted a dropoff in imports, most noticeably to the Midwest market area and the Pacific Northwest. Month to date, imports of Canadian gas to the Midwest are down 765 MMcf/d from the month prior and are averaging just below 2.3 Bcf/d.

Imports of Canadian gas to the Pacific Northwest, meanwhile, have fallen over 380 MMcf/d on average in November and are down about 12% from October.

The dramatic ramp-up in feedgas deliveries to the Sabine Pass LNG export terminal comes following the end of maintenance activity in late October and the introduction of commissioning-feedgas volumes to Train 3.

In first-half October, gas deliveries to Sabine Pass remained at or close to zero as maintenance on a flare column serving Trains 1 and 2 was carried out.

Deliveries to the facility did not climb back above 1 Bcf/d until late last month.

In November, commissioning activities at Train 3 have elevated feedgas deliveries to Sabine Pass to record highs, which neared 1.6 Bcf/d Sunday and Monday, Platts Analytics data showed.

EXPECTED EXPORT GROWTH SHOWS MINIMAL PRICE IMPACT

In the year ahead, US gas exports are expected to briefly top 2.5 Bcf/d as growing pipeline exports to Mexico and waterborne exports to global consumers surpass imports of LNG and Canadian gas.

Over the same period, forward markets currently have Henry Hub gas priced at an annual high of just $3.16/MMBtu in December 2017, Platts M2MS forward curve data showed.

Henry Hub gas is currently priced at a high of $3.24/MMBtu for January 2018 and will average just $2.93/MMBtu over the next five years.

Net exports of pipeline gas and LNG are expected to top 10 Bcf/d as early as February 2021, a Platts Analytics forecast showed.

www.platts.com