Friday, October 18, 2019

EIA Natural Gas Weekly Update, October 17, 2019

LNG has become more of a factor in the Thursday storage numbers, to the point that the timing of just one or two ships will change the injection/withdrawal numbers.
It makes life interesting.

And speaking of interesting, Senator Elizabeth Warren has stated she will, if elected President, halt all U.S. LNG exports. We have a few trades for that and for equities in general, not just for a Warren presidency but for the possibility the Senator is the Democrat nominee.
There is opportunity everywhere, every day.

Front futures 2.302   -0.016
December's   2.501   -0.015

From the Energy Information Administration:
for week ending October 16, 2019   |  Release date:  October 17, 201 
In the News:

Elba Island, the sixth U.S. LNG export terminal, begins commercial operations
On September 30, the Federal Energy Regulatory Commission authorized the Elba Liquefaction Company, L.L.C. and Southern LNG Company, L.L.C.―the developers of the Elba Island liquefied natural gas (LNG) export terminal―to place the first of 10 liquefaction units into commercial service. Elba Island LNG became the sixth U.S. LNG liquefaction export facility to begin LNG production in the Lower 48 states since 2016.

Elba Island LNG is the smallest of the U.S. LNG export facilities, with a total capacity of 0.3 billion cubic feet per day (Bcf/d) across 10 portable small-scale units (called trains), each with a capacity of 0.03 Bcf/d. Elba Island uses a new technology called Moveable Modular Liquefaction System (MMLS), which was developed by Royal Dutch Shell. Trains 2 and 3 are in the start-up phase, Trains 4 through 6 are being commissioned, and Trains 7 through 10 are under construction, according to project developers. All trains are scheduled to be commissioned sequentially in one-month intervals.
Elba Island LNG is located near Savannah, Georgia, close to the Georgia-South Carolina border at the site of an existing regasification terminal, which allows the new liquefaction facility to share LNG storage tanks, pipelines, and other infrastructure with the regasification terminal. Elba Island can still import, store, and regasify LNG. The last LNG import cargo was received at Elba Island on October 13, 2019.

The Elba Island terminal is connected to the pipeline network through the Elba Express pipeline, which has interconnections with the Southern Natural Gas Pipeline System (SNG) and Transcontinental Pipeline (TransCo) in Georgia and South Carolina. To accommodate additional southbound flows to the export project, two new compressor stations were installed on the Elba Express pipeline, one in Georgia and one in South Carolina.

Elba Island will operate as a tolling facility where LNG off-takers will pay a liquefaction tolling fee to the project owners. The export capacity of Elba Island is fully contracted by Royal Dutch Shell under a 20-year tolling agreement. Shell is responsible for procuring its own natural gas feedstock for liquefaction and LNG marketing. According to Shell, natural gas liquefied at Elba Island will be exported to the global LNG spot markets.

Elba Island has five LNG storage tanks with a total capacity of 535,000 liquid cubic meters (11.3 billion cubic feet). Given the small size of liquefaction units, if all 10 units were producing LNG at a nameplate liquefaction capacity, it would take about nine days to fill one storage tank (3.0 Bcf capacity), or 35 days to fill all five storage tanks, according to EIA calculations. Typically, one storage tank holds an LNG volume equivalent to a standard-size LNG cargo (about 3 Bcf). The first LNG exports from the facility are expected in the next few months.

(For the week ending Wednesday, October 16, 2019)
  • Natural gas spot prices rose at most locations this report week (Wednesday, October 9 to Wednesday, October 16). Henry Hub spot prices rose from $2.22 per million British thermal units (MMBtu) last Wednesday to $2.25/MMBtu yesterday.
  • At the New York Mercantile Exchange (Nymex), the price of the November 2019 contract increased 7¢, from $2.234/MMBtu last Wednesday to $2.303/MMBtu yesterday. The price of the 12-month strip averaging November 2019 through October 2020 futures contracts climbed 1¢/MMBtu to $2.377/MMBtu.
  • Net injections to working gas totaled 104 billion cubic feet (Bcf) for the week ending October 11. Working natural gas stocks are 3,519 Bcf, which is 16% more than the year-ago level and equal to the five-year (2014–18) average for this week.
  • The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 16¢/MMBtu, averaging $5.28/MMBtu for the week ending October 16. The price of ethane fell by 4%. The price of natural gasoline and propane rose by 5%, and the price of butane and isobutane each 4%.
  • According to Baker Hughes, for the week ending Tuesday, October 8, the natural gas rig count decreased by 1 to 143. The number of oil-directed rigs rose by 2 to 712. The total rig count increased by 1, and it now stands at 856.
Prices/Supply/Demand: Prices end the week at highs in most markets. This report week (Wednesday, October 9 to Wednesday, October 16), Henry Hub spot prices rose 3¢ from $2.22/MMBtu last Wednesday to a high of $2.25/MMBtu yesterday. Temperatures were generally cooler than normal across most of the country, putting upward pressure on prices. At the Chicago Citygate, prices increased 37¢ from $1.74/MMBtu last Wednesday to a high of $2.11/MMBtu yesterday....

EIA Natural Gas Storage Report: Meh 
2.315 up 0.012 last....