The reason for that is there was a bit of a lack of investment over the last decade in LNG export facilities due in part to folks looking at the energy transition and not wanting to be locked into these giant, expensive, multibillion dollar facilities that might not operate for a few years if folks were to shift to renewable energy. There just isn't enough facilities to export liquefied natural gas around the world to meet the rising demand in these markets in Europe, in Asia, South Asia, parts of Latin America. STAPCZYNSKI: So let's first look at supply. Why is this important in the context of these rising prices and dependency on the gas? But the fact of the matter is there just isn't enough LNG to fill the gap left by Russia.įADEL: Now, one of the big issues you explore in your report on is infrastructure and the importance of these different plants and how liquefied natural gas is moved around the world. And Germany and other countries, including Pakistan, are going to Qatar to try to sign deals. could become the world's biggest LNG exporter this year, overtaking Qatar and Australia. If all the facilities run the way they're supposed to, the U.S. has, over the last two decades, turned from a net natural gas importer to a net natural gas exporter for LNG. And it cut off vital supplies to Europe and Asia. gas prices fell because there was more supply. That trapped more natural gas in the domestic American market, leaving less to be exported abroad. Now, that facility caught fire and shut last month. LNG export facility called the Freeport plant, which is in Texas. natural gas prices are falling and Asian and European prices are surging as of late is because of a fire at a key U.S. STEPHEN STAPCZYNSKI: One of the reasons why U.S. I asked Stephen Stapczynski, an energy reporter for Bloomberg who's based in Singapore, why the contrast? But for now, the price of natural gas is coming down in the U.S. When the plant is finished in 2026, it will boost that country's production capacity by 40%. should get used to the likelihood of high double-digit gas prices," said Albert Lin, executive director of Pearl Street Station Finance Lab, which conducts economic analysis related to the energy sector.Shell signed a huge deal this week to invest in a liquefied natural gas project in Qatar. gas prices increasingly are set by global demand - not domestic consumption, say experts. The growth will require more pipelines to avoid transportation constraints, he said.Īnother change: U.S. "They are making a lot of money at these prices," he said, referring to natural gas producers. "Natural gas is far, far from a waste product," said Joel Moxley, chief executive at GPA Midstream Association, whose members are seeing a boost from higher volumes on their gathering and processing systems. This week, Cheniere Energy disclosed plans to expand its Corpus Christi LNG plant, a move that will take years to complete. LNG developer Tellurian (TELL.A) in July moved to expand its gas holdings, spending $125 million on land to feed a proposed Louisiana export plant. Exxon Mobil this month said it is selling its Fayetteville shale properties after finding a buyer for North Texas gas that had been on the market for at least a year. High prices are helping revive asset sales in U.S. Conoco also said it plans to increase exposure to natural gas, and invest in two LNG projects.
Three months earlier, it said the field was unlikely to get additional resources. APA Corp (APA.O) in August said it moved a rig into a West Texas gas field and began drilling again. This includes year-over-year volume increases in the three largest fields of 2.6% in Appalachia, 7% in Permian and 13.9% in the Haynesville shale fields. shale gas production is projected to reach 93.84 billion cubic feet per day (bcfd) in September, up 6.715 bcfd from a year ago, according to the Energy Information Administration. They can either pay to close those hedges, if able, or risk missing out on the price gains, Hagerty said. Producers including CNX Resources (CNX.N) and Southwestern Energy (SWN.N) hedged about 60% of their 2022 production, placing a ceiling of around $3 per mmcf. Hedging is when companies sell future production at fixed prices, which can be lower in a rising market.īTU has raised its forecast for 2022 gas production for four straight months, with its current outlook 365 million cubic feet per day (mmcfd) higher than April's view, while holding its 2022 oil outlook flat. prices, said Matt Hagerty, a senior analyst for market researcher BTU Analytics, a FactSet company. It is adding two drilling rigs in the Haynesville gas field and recently signed an agreement to deliver the fuel to Golden Pass LNG, a proposed LNG exporter.Ĭompanies like Conoco that do not hedge gas production are getting the benefit of strong U.S. Chesapeake Energy, which in 2019 spent nearly $4 billion to buy an oil-producer, now plans to sell that property and become a pure-play gas company.
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