Embed Size (px)
Citation preview
Visit: natgasintel.com
Reporting on the Natural Gas marketplace since 1981
1 NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM
MARKETS REPORTDecember Natural Gas Futures Stumble Amid Higher Temperatures, Election Uncertainty
Natural gas futures tumbled a second consecutive day as weather models leaned increasingly bearish for much of November, offsetting continued liquefied natural gas (LNG) strength and anticipation for the first withdrawal from storage of the season. Election Day uncertainty may also have sidelined some traders.
The December Nymex contract fell 18.5 cents day/day and settled at $3.059/MMBtu on Tuesday. The prompt month lost 11.0 cents a day ear-lier. January shed 18.0 cents to $3.195.
Spot gas prices also declined as comfortable temperatures settled in across most of the country. NGI’s Spot Gas National Avg. declined 20.0 cents to $2.625.
In fact, the already
LIQUEFIED NATURAL GASLow Commodity Prices Again Weigh on Total’s LNG Operations
Total SE returned to profitabil-ity in the third quarter as the global economy recovered from lows brought on by the Covid-19 pandemic, but the company continues to face low global commodity prices and uncertainty as the year comes to a close.
The French supermajor took an $8.1 billion impairment in the second quarter when commodity prices de-clined precipitously as the company confronted what CEO Patrick Pouy-anne called “exceptional …cont' pg. 11
…cont' pg. 3
LIQUEFIED NATURAL GASFrance’s Engie Scraps Proposed Rio Grande LNG Deal Amid Environmental Concerns
French energy company Engie SA has decided to end negotiations to buy liquefied natural gas (LNG) from the proposed Rio Grande LNG facility in Texas because of French government concerns over hydraulic fracturing (fracking).
Bloomberg reported Tuesday that a spokeswoman at Houston-based NextDecade Corp., which owns the Rio Grande LNG project, said Engie decided to no longer pursue commer-cial discussions.
NextDecade declined to comment to NGI about the matter.
Engie’s board last month decided to further investigate the environmental implications of the potential $7 bil-lion, 20-year contract before deciding whether to fund it. The
LIQUEFIED NATURAL GASBerkshire Hathaway Taking Over Cove Point LNG from Dominion
An affiliate of Warren Buffett’s Berkshire Hathaway Inc. on Monday became the operator of the Cove Point liquefied natural gas (LNG) export terminal in Lusby, MD, as part of a $9.7 billion acquisition from Dominion Energy Inc.
The sale of the majority of the assets in the transaction announced in July were completed Monday, Rich-mond, VA-based Dominion manage-ment said.
Berkshire Hathaway Energy acquired 5,500 miles of interstate gas transmission pipelines and about 775 Bcf of storage, as well as a 25% stake and operating interest in Cove Point. The transaction value currently is esti-mated at $8 billion, comprising about $2.7 billion in cash and about $5.3 bil-lion in debt transfer.
WEDNESDAY, NOVEMBER 4, 2020 - VOL. 28, NO. 84
Range Remaining Disciplined Despite Improving
Natural Gas Outlook
…cont' pg. 10
…cont' pg. 10
Previous 5 Days Table
Oct 28
Oct 29
Oct 30
Nov 02
Nov 03
December Futures 3.291 3.301 3.354 3.244 3.059
Henry Hub 3.060 3.000 3.040 2.995 2.835
Chicago 3.035 2.920 2.950 2.845 2.640
AGT Citygate 4.835 6.535 3.610 3.870 2.150
Opal 3.320 3.135 2.955 3.180 3.355
SoCal Bdr. Avg. 3.350 3.175 3.005 3.670 4.350
NOVA 3.150 3.185 3.185 3.200 2.965More Detailed Market Prices on Pages 2-4.
INSIDE THIS ISSUE
Equinor Sets Net-Zero Emissions Goal, Sees Writedowns in E&P on Low Commodity Prices . . . . . . . . . . 6
Pinnacle West’s Arizona Utility Dodges Summer Heat Issues with Mix of Fuels, Conservation . . . . . . . . . . . . . . . 9
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM2
CASH MARKET PRICES
…cont' pg. 3
Trade Date: Nov 03; Flow Date(s): Nov 04RANGE AVG CHG VOL DEALS
REX into Trunk - Douglas 2.600-2.600 2.600 -0.200 2 2St. Clair -- -- -- -- --Midwest Regional Avg. 2.500-2.870 2.620 -0.200 5,732 1,000
MidcontinentANR SW 2.610-2.650 2.620 -0.185 257 34El Paso Anadarko 2.470-2.525 2.485 0.025 54 9Enable East 2.500-2.590 2.535 -0.140 99 22NGPL Midcontinent 2.540-2.590 2.565 -0.205 382 58Northern Border Ventura 2.565-2.610 2.595 -0.155 249 38Northern Natural Demarc 2.550-2.635 2.620 -0.140 253 44Northern Natural Gas 8-12 -- -- -- -- --Northern Natural Gas 13-16A -- -- -- -- --Northern Natural Ventura 2.555-2.620 2.595 -0.125 580 65OGT 2.500-2.600 2.545 -0.170 102 28Panhandle Eastern 2.330-2.500 2.445 -0.200 383 67Southern Star 2.540-2.570 2.555 -0.225 55 8Transwestern Panhandle Pool -- -- -- -- --Midcontinent Regional Avg. 2.330-2.650 2.555 -0.155 2,410 373
North Louisiana/ArkansasEnable South -- -- -- -- --NGPL Gulf Coast Mainline -- -- -- -- --Perryville 2.575-2.575 2.575 -0.195 10 1Texas Eastern, M1, 24 2.550-2.550 2.550 -0.200 13 4Texas Gas Zone 1 2.570-2.680 2.610 -0.165 283 52Trunkline Zone 1A 2.580-2.635 2.590 -0.215 178 26N. LA Regional Avg. 2.550-2.680 2.580 -0.195 483 83
South LouisianaANR SE 2.750-2.755 2.750 -0.220 65 12Bobcat Storage -- -- -- -- --Columbia Gulf Mainline 2.500-2.640 2.575 -0.215 200 32Columbia Gulf onshore 2.670-2.740 2.740 -0.175 217 39Egan Hub 2.780-2.790 2.785 -- 21 2Florida Gas Zone 2 -- -- -- -- --Henry Hub 2.790-2.860 2.835 -0.160 198 36Pine Prairie 2.770-2.790 2.785 -0.150 293 36Southern Natural 2.700-2.760 2.740 -0.180 427 96Tennessee Line 500 2.700-2.745 2.730 -0.175 181 36Tennessee Line 800 2.730-2.750 2.740 -0.140 195 34Texas Eastern E. LA 2.735-2.770 2.760 -0.165 219 30Texas Eastern W. LA 2.770-2.805 2.785 -0.175 448 54Texas Gas Zone SL -- -- -- -- --Transco Zone 3 2.720-2.765 2.755 -0.150 164 44Trunkline E. LA 2.730-2.760 2.760 -0.160 21 3Trunkline W. LA -- -- -- -- --S. LA Regional Avg. 2.500-2.860 2.750 -0.170 2,646 454
SoutheastDominion Energy Cove Point 1.700-1.750 1.745 -0.555 229 14FGT Citygate 2.885-3.050 2.970* -- -- --Florida Gas Zone 3 2.780-2.920 2.840 -0.110 209 32Southern Pines -- -- -- -- --Tenn Zone 1 100L 2.570-2.650 2.595 -0.205 225 44Tenn Zone 1 non-St. 87 2.600-2.650 2.635 -0.160 28 6Tenn Zone 1 St. 87 2.570-2.620 2.590 -0.215 197 38Texas Eastern M-1, 30 2.650-2.680 2.670 -0.230 32 8Transco Zone 4 2.735-2.775 2.750 -0.175 1,438 220Transco Zone 5 2.700-2.885 2.805 -0.160 297 64Transco Zone 5 North 2.700-2.885 2.790 -0.190 28 10Transco Zone 5 South 2.750-2.840 2.805 -0.160 269 54Southeast Regional Avg. 1.700-3.050 2.655 -0.205 2,428 382
AppalachiaColumbia Gas 1.450-1.700 1.545 -0.610 994 179Dominion North 0.450-0.700 0.535 -0.815 73 23Dominion South 0.340-1.010 0.620 -0.740 803 142
Trade Date: Nov 03; Flow Date(s): Nov 04RANGE AVG CHG VOL DEALS
South TexasAgua Dulce 2.885-2.885 2.885 -0.015 18 1Florida Gas Zone 1 -- -- -- -- --NGPL S. TX -- -- -- -- --Tennessee Zone 0 South 2.765-2.820 2.795 -0.165 133 20Texas Eastern S. TX 2.810-2.840 2.825 -0.155 212 28Transco Zone 1 2.800-2.850 2.820 -0.155 20 6Tres Palacios 2.800-2.930 2.885 -0.170 391 59S. TX Regional Avg. 2.765-2.930 2.840 -0.135 773 114
East TexasAtmos Zone 3 2.480-2.550 2.505 -0.135 34 12Carthage 2.585-2.690 2.625 -0.140 287 39Golden Triangle Storage 2.850-2.850 2.850 -- 30 4Houston Ship Channel 2.760-2.830 2.805 -0.165 44 10HPL - East Texas Pool -- -- -- -- --Katy 2.720-2.830 2.780 -0.180 282 66Maypearl -- -- -- -- --Moss Bluff 2.880-2.940 2.905 -0.145 223 21NGPL TexOk 2.500-2.660 2.585 -0.200 945 157Tennessee Zone 0 North 2.540-2.650 2.635 -0.135 129 20Texas Eastern E. TX 2.550-2.600 2.575 -0.115 20 6Tolar Hub 2.490-2.560 2.505 -0.155 185 22Transco Zone 2 2.700-2.700 2.700 -- 10 4E. TX Regional Avg. 2.480-2.940 2.680 -0.130 2,187 361
West Texas/SE New MexicoEl Paso Permian 2.250-2.550 2.385 0.800 450 112El Paso - Keystone Pool 2.250-2.450 2.370 0.760 270 68El Paso - Plains Pool 2.500-2.550 2.505 0.105 31 8El Paso - Waha Pool 2.250-2.480 2.385 0.985 150 36Northern Natural Gas 1-7 -- -- -- -- --Oneok WesTex 2.300-2.450 2.390 0.545 82 16Transwestern 2.300-2.460 2.405 0.255 27 10Transwestern - Central -- -- -- -- --Transwestern - W. TX 2.300-2.460 2.405 0.255 27 10Waha 2.250-2.500 2.415 0.485 459 101W. TX/SE NM Regional Avg. 2.250-2.550 2.410 0.525 786 187
MidwestAlliance 2.610-2.645 2.635 -0.200 617 102ANR ML7 -- -- -- -- --Bluewater Hub -- -- -- -- --Chicago Citygate 2.610-2.660 2.640 -0.205 371 73Chicago - Nicor Gas 2.610-2.650 2.635 -0.205 127 25Chicago - NIPSCO 2.620-2.655 2.640 -0.205 179 32Chicago - North Shore -- -- -- -- --Chicago - Peoples 2.610-2.660 2.640 -0.210 66 16Consumers Energy 2.620-2.690 2.660 -0.210 248 45Dawn 2.560-2.850 2.670 -0.190 1,933 321Defiance 2.540-2.595 2.570 -0.215 168 40Rover-ANR 2.540-2.595 2.565 -0.215 128 30Rover-Panhandle 2.550-2.585 2.575 -0.215 40 10Emerson 2.615-2.650 2.630 -0.195 291 64Joliet 2.610-2.645 2.635 -0.200 647 106Lebanon 2.500-2.620 2.585 -0.175 95 22Michigan Consolidated 2.590-2.700 2.675 -0.190 827 117NGPL Amarillo Mainline 2.550-2.595 2.585 -0.200 170 36NGPL Iowa-Illinois 2.600-2.600 2.600 -0.240 20 2NGPL MidAmerican 2.630-2.630 2.630 -0.170 23 4Parkway/Union 2.655-2.870 2.785 -0.130 123 36REX Zone 3 Delivered 2.520-2.620 2.605 -0.195 821 134REX into ANR - Shelby 2.520-2.600 2.570 -0.200 95 20REX into MGT - Edgar 2.560-2.620 2.610 -0.205 140 20REX into NGPL - Moultrie 2.550-2.620 2.610 -0.190 575 90REX into PEPL - Putnam 2.560-2.565 2.565 -- 10 2
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM 3
challenging weather outlook grew increasingly discouraging for gas prices, forecasters said Tuesday.
“Warmer-than-normal temperatures will spread across most of the country for the rest of the week with comfortable highs of 50s to 80s,” NatGasWeather said. “Conditions will be locally cooler across the Northwest and hotter across the Southwest, but overall a rather light demand pattern for early November.”
While colder air is expected to return to the Plains and parts of the Mountain West this weekend and early next week, the shift is expected to be far less harsh than forecasted only a few days earlier.
“The overnight data yet again showed less cold air into” the central United States “as upper high pressure over the East effectively blocks it to keep highs of 60s to 80s going over much of the southern and eastern United States for light demand,” NatGasWeather said. “We continue to expect bearish weather headwinds will continue until
the eastern half of the country sees much colder air, with the next opportunity not until the latter part of November.”
Weather data early Tuesday trended further warmer with both the domestic and European models losing about 10 heating degree days (HDD), the forecaster said. Both models now predict national HDDs will be more than 60 warmer than normal for the coming 15-day period.
Analysts also said the presidential election inevitably cast some of the shadow over natural gas markets Tuesday, given Democrat Joseph R. Biden Jr. led in most national polls and presented the po-tential for substantial change to the sector.
President Trump’s energy policy has been defined by deregula-tion and a corporate tax cut. Biden has vowed to bump up the corpo-rate tax rate and introduce policies aimed at gradually transitioning domestic energy production away from fossil fuels and toward renewable sources. …cont' pg. 4
CASH MARKET PRICES
…from MARKETS REPORT - December Natural Gas Futures Stumble, pg., 1
Trade Date: Nov 03; Flow Date(s): Nov 04RANGE AVG CHG VOL DEALS
Leidy Hub 0.650-0.650 0.650 -0.845 1 1Millennium Delivered -- -- -- -- --Millennium East Pool 0.550-0.610 0.590 -0.560 45 10Tenn Zone 4 200L 1.675-2.000 1.780 -0.925 161 33Tennessee Zn 4 313 Pool 0.790-1.000 0.860 -0.565 68 18Tennessee Zn 4 Marcellus 0.420-0.700 0.585 -0.320 189 41Texas Eastern M-2, 30 Delivery -- -- -- -- --Texas Eastern M-2, 30 Receipt 0.400-1.120 0.720 -0.640 895 120Texas Eastern M-3, Delivery 0.950-1.100 1.010 -0.650 117 25Texas Eastern M-3, Receipt -- -- -- -- --Transco-Leidy Line 0.300-0.660 0.530 -0.735 162 52Appalachia Regional Avg. 0.300-2.000 0.855 -0.655 3,504 644
NortheastAlgonquin Citygate 1.900-2.500 2.150 -1.720 203 44Algonquin Citygate (non-G) 1.900-2.500 2.165 -1.705 193 43Algonquin Receipts 0.700-1.050 0.905 -0.415 295 58Dracut -- -- -- -- --Iroquois Zone 1 2.660-2.660 2.660 -0.505 1 2Iroquois Zone 2 2.500-2.700 2.610 -0.970 88 23Iroquois, Waddington 2.300-2.700 2.645 -0.450 614 121Maritimes & Northeast 4.650-5.000 4.785 -0.965 6 2Niagara 1.300-2.250 1.760 -0.780 48 13PNGTS 4.000-4.000 4.000 -0.905 98 17E Hereford/Pittsburg 4.000-4.000 4.000 0.000 1 2PNGTS Non-Border 4.000-4.000 4.000 -0.915 97 15Tenn Zone 5 200L 1.150-2.500 1.605 -1.230 190 9Tenn Zone 5 200L East 2.450-2.500 2.495 -0.690 64 7Tenn Zone 5 200L West 1.150-1.150 1.150 -1.510 126 2Tenn Zone 5 300L -- -- -- -- --Tenn Zone 6 200L 2.050-3.500 2.720 -1.460 144 54Tenn Zone 6 200L North 2.750-3.500 3.180 -1.795 59 24Tenn Zone 6 200L South 2.050-2.500 2.400 -1.585 86 30Tenn Zone 6 300L -- -- -- -- --Transco Zone 6 non-NY 0.890-1.250 1.085 -0.745 172 53Transco Zone 6 non-NY North 0.890-1.250 1.085 -0.745 172 53Transco Zone 6 non-NY South -- -- -- -- --Transco Zone 6 NY 0.800-1.240 1.090 -0.780 106 30Northeast Regional Avg. 0.700-5.000 2.425 -0.890 1,961 426
Rocky MountainsCheyenne Hub 2.530-2.600 2.550 -0.240 456 88
Trade Date: Nov 03; Flow Date(s): Nov 04RANGE AVG CHG VOL DEALS
CIG 2.570-2.650 2.595 -0.155 120 24CIG DJ Basin 2.550-2.550 2.550 -- 19 4El Paso Bondad 2.610-2.630 2.625 -0.175 72 12El Paso San Juan 2.600-2.870 2.665 -0.165 199 49Kern River 3.155-3.380 3.325 0.140 615 105Kingsgate -- -- -- -- --Northwest S. of Green River 2.520-2.545 2.530 -0.230 28 6Northwest Sumas 3.250-3.750 3.505 0.110 272 64Northwest Wyoming Pool 3.225-3.350 3.295 0.170 67 20Opal 3.310-3.390 3.355 0.175 188 29Questar 3.200-3.250 3.245 0.145 16 6Ruby - Receipts 3.250-3.330 3.300 0.130 45 8Stanfield 3.150-3.280 3.195 0.025 143 22Transwestern San Juan 2.650-2.850 2.740 -0.090 45 6White River Hub 2.480-2.690 2.585 -0.195 340 48Rocky Mtns. Regional Avg. 2.480-3.750 2.935 -0.035 2,582 485
Arizona/NevadaEl Paso S. Mainline/N. Baja 4.050-4.200 4.115 0.315 83 14Kern Delivery 4.450-5.350 4.845 0.965 507 112
CaliforniaMalin 3.220-3.350 3.275 0.050 551 95PG&E Citygate 4.020-4.130 4.105 0.040 647 123SoCal Citygate 5.750-5.950 5.850 0.755 159 24Southern Border, PG&E 2.700-2.820 2.800 -0.055 45 8SoCal Border Avg. 2.800-5.360 4.350 0.680 401 75SoCal Border - Blythe -- -- -- -- --SoCal Border - Ehrenberg 4.000-4.200 4.135 0.380 181 35SoCal Border - Kern River Station -- -- -- -- --SoCal Border - Kramer 4.700-4.850 4.735 0.905 108 13SoCal Border - Needles 3.050-3.050 3.050 0.050 1 2SoCal Border - Topock 2.800-2.820 2.815 -0.120 35 10SoCal Border - Wheeler Ridge 4.800-5.360 5.020 1.050 78 15California Regional Avg. 2.700-5.950 4.015 0.340 1,801 325National Avg. 0.300-5.950 2.625 -0.200 27,878 4,960
CanadaAlliance (APC) - ATP 3.070-3.150 3.115 -0.275 228 46Empress 2.910-3.270 3.000 -0.245 315 48NOVA/AECO C 2.920-3.270 2.965 -0.235 2,537 363Westcoast Station 2 2.750-2.850 2.775 -0.185 418 115
Prices are in U.S.$/MMBtu except locations in the Canada section which are in Cdn$/GJ. The deals column represents the number of transactions used by NGI in the calculation of the price. The volume column is the sum of the volume of those deals, in thousand MMBtus/day. Volumes may not total because of rounding. The data upon which we derive our indexes include both data provided to NGI from the ICE trading platform as well as submitted directly from companies who are principals to the trade. For more information, please see NGI's Price Methodology.
*Assessed based on trades that were conducted at a basis differential to the day-ahead Florida Gas Transmission Zn 3 index that appears in this table.
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM4
Heat, however, has persisted in parts of the southwestern United States and into areas of California, supporting ongoing cooling de-mand into the fall season.
Out West, SoCal Citygate prices jumped 75.5
Trade Date: Nov 03CONTRACT OPEN HIGH LOW SETTLE CHANGE
Dec-20 3.2360 3.2410 3.0410 3.0590 -0.1850Jan-21 3.3640 3.3670 3.1750 3.1950 -0.1800Feb-21 3.3270 3.3270 3.1410 3.1590 -0.1730Mar-21 3.2040 3.2110 3.0430 3.0630 -0.1560Apr-21 3.0000 3.0000 2.8950 2.9070 -0.0950May-21 2.9540 2.9540 2.8680 2.8810 -0.0860Jun-21 2.9850 2.9860 2.9090 2.9210 -0.0800Jul-21 3.0290 3.0310 2.9570 2.9710 -0.0740Aug-21 3.0450 3.0450 2.9700 2.9830 -0.0740Sep-21 3.0320 3.0350 2.9580 2.9690 -0.0760Oct-21 3.0690 3.0690 2.9890 3.0060 -0.0740Nov-21 3.1220 3.1290 3.0610 3.0760 -0.0640Dec-21 3.2630 3.2660 3.2030 3.2200 -0.0560Jan-22 3.3690 3.3700 3.3090 3.3240 -0.0550Feb-22 3.2910 3.2910 3.2370 3.2500 -0.0540Mar-22 3.0550 3.0550 3.0110 3.0310 -0.0500Apr-22 2.6130 2.6130 2.5900 2.6010 -0.0200May-22 2.5700 2.5700 2.5200 2.5310 -0.0160Jun-22 2.5520 2.5670 2.5500 2.5590 -0.0150Jul-22 2.6010 2.6020 2.5870 2.5960 -0.0140Aug-22 2.6120 2.6130 2.5970 2.6040 -0.0130Sep-22 2.6010 2.6020 2.5860 2.5930 -0.0120Oct-22 2.6280 2.6300 2.6130 2.6190 -0.0140Nov-22 2.7240 2.7360 2.7060 2.7090 -0.0130Dec-22 2.9260 2.9260 2.9030 2.9030 -0.0080Jan-23 3.0170 3.0170 3.0170 3.0170 -0.0110Feb-23 2.9540 2.9540 2.9540 2.9540 -0.0120Mar-23 2.7730 2.7730 2.7730 2.7730 -0.0130Apr-23 2.3770 2.3770 2.3770 2.3770 -0.0140May-23 2.3200 2.3200 2.3200 2.3200 -0.0140Jun-23 2.3440 2.3440 2.3440 2.3440 -0.0140Jul-23 2.3850 2.3850 2.3850 2.3850 -0.0160Aug-23 2.3940 2.3940 2.3940 2.3940 -0.0200Sep-23 2.3850 2.3850 2.3850 2.3850 -0.0160Oct-23 2.4050 2.4050 2.4050 2.4050 -0.0150Nov-23 2.5160 2.5160 2.5160 2.5160 -0.0140Dec-23 2.7310 2.7310 2.7310 2.7310 -0.0100
Source: CME Group, Inc. Updates provided by CSI.
Full CME Natural Gas Futures settlements out 12+ years are available here.
HENRY HUB FUTURES PRICES
…cont' pg. 6
“I do not think the pivot would be something that would happen quickly, but Biden would put his people in key positions that would tend to hinder expansion of fossil fuel production and infrastructure development,” said energy futures director Robert Yawger of Mizuho Securities USA LLC. “He would tend to scale back drilling on public land, and he would be less inclined to approve new pipelines.”
LNG feed gas volumes, meanwhile, remained strong as they have for several days following Hurricane Zeta last week. LNG levels hovered near 10 Bcf Tuesday, indicating mounting export demand and pointing to tighter balances this winter.
During a third quarter earnings call Tuesday, Williams execu-tives said they were optimistic about continued strong LNG demand. “We have confidence that producers see this as an attractive market and will be able to respond very effectively to the increasing call on gas supplies, particularly in the very best of the Marcellus, Utica and Haynesville shales…which we are so fortunate to serve,” CEO Alan Armstrong told analysts.
Three consecutive Energy Information Administration (EIA) storage reports in October produced smaller-than-expected injec-tions, the last of which was largely attributed to the bump in LNG feed gas deliveries. Observers increasingly expect a withdrawal with the agency’s Thursday report for the week ended Oct. 30. EIA last week reported a 29 Bcf injection. Total working gas in storage as of Oct. 23 rose to 3,955 Bcf, 289 Bcf above the five-year average, according to EIA.
Bespoke Weather Services and Tudor, Pickering, Holt & Co. analysts have projected withdrawals for the latest week. If that proves to be the case, withdrawals would have started two weeks ahead of normal and could help to burn through the current inventory surplus.
Production, meanwhile, held steady Tuesday following shut-ins a week earlier in anticipation of Zeta. The hurricane blew into the Gulf of Mexico (GOM) but exited without causing widespread issues for oil and gas producers. Roughly 45% of the gas produced in the GOM was taken offline ahead of the Category 2 storm. As of midday Tuesday, that figure had declined to 10.3%, the Bureau of Safety and Environmental Enforcement said.
New waves of the coronavirus in the Lower 48 and overseas could impact production of associated gas in coming months and, by extension, further tighten the U.S. gas market this winter. Govern-ments in France, Germany, the UK and elsewhere in Europe have recently announced new restrictions to slow the spread of the virus. These limitations could crimp gasoline and jet fuel demand, hamper-ing oil prices and keeping already low oil and associated production in check.
“As the onshore industry grapples with low prices and an un-certain demand picture…total Lower 48 volumes are anticipated to hold flat” the rest of 2020, Rystad Energy analysts said.
Cash PricesSpot gas prices declined Tuesday alongside rising temperatures.Despite longer-term supply/demand fundamentals that could
support gas prices, “so far this week, weather patterns trending further warmer have gained the upper hand,” NatGasWeather said.
Across the nation’s midsection and parts of the East, where temperatures were mild and expected to remain so for several days, prices dropped.
Chicago Citygate prices fell 20.5 cents day/day to an average $2.640, while OGT lost 17.0 cents to $2.545.
In the Northeast, Algonquin Citygate plunged $1.720 to $2.150.
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM 5
1) Transport rates for U.S. interstates, SISTRANGAS, and other Mexico pipelines taken from electronic bulletin boards (EBBs). However, Texas intrastate pipelines do not have EBBs, so our transportation costs for these are an estimates. For more information on which charges we include in these fees, please see the below note.2) Calculated Monterrey price would be the same as Los Ramones, and calculated El Encino would be the same as Torreon, if we had used the SISTRANGAS tariff, since SISTRANGAS is a zone based system.3) U.S. gas is not likely to be delivered to Cactus or Salina Cruz, but these represent a theoretical delivered price in Zonas Sur and Istmo.
The current assessments are estimated US-to-Mexico natural gas cost plus transport prices; please refer to the Mexico Gas Price Index Methodology for pipeline-specific costs and for any additional information.
Moving forward, NGI believes the best price transparency are price indexes based on actual transactions, and is asking all buyers and sellers of natural gas in Mexico to support this effort by providing those transactions to NGI on a confidential basis. NGI was at the forefront of this market price deregulation in the United States in the 1980s and has the experience to help the Mexico market do the same in 2020 and beyond. For more information, please contact Dexter Steis or Pat Rau at +1 (703) 318-8848 or [email protected].
Want NGI's Mexico Natural Gas Price Index in a spreadsheet? Download a sample in Excel-friendly format.
Want more on Mexico? Start a trial to NGI's Mexico Gas Price Index and get a comprehensive picture of daily news, prices, and analytics that impact this growing marketplace. Request your trial.
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM6
…cont' pg. 7
cents to $5.850, and Kern Delivery spiked 96.5 cents to $4.845.In West Texas, prices broadly rebounded after day-earlier declines. El Paso Permian climbed 80.0 cents to $2.385.
OUTLOOKEquinor Sets Net-Zero Emissions Goal, Sees Writedowns in E&P on Low Commodity Prices
Equinor SA on Monday set a goal to become a net-zero energy operator in 30 years, joining goals set out by fellow European-based oil and natural gas majors.
The Norway-based energy major still expects to deliver produc-tion growth of around 3% on average from 2019 to 2026 through “competitive and resilient projects.” The net-zero ambition is designed to strengthen future competitiveness and value creation for major projects on the Norwegian continental shelf.
“Equinor is committed to being a leader in the energy transition,”
said CEO Anders Opedal, who took over running the global opera-tor on Monday. “It is a sound business strategy to ensure long-term competitiveness during a period of profound changes in the energy systems as society moves toward net zero. Over the coming months, we will update our strategy to continue to create value for our share-holders and to realize this ambition.”
London-based BP plc in September laid out its ambitious net-zero emissions plan to 2050. BP and Equinor are partnering to build a U.S. wind business, which includes developing offshore leases on the East Coast. Europe’s Royal Dutch Shell plc and Total SE also are working toward carbon-neutral goals.
Longer term, Equinor plans to produce less oil and natural gas than it does today. The ambition overall is to reduce its direct, indirect and customer emissions, referred to as Scope 1, 2 and 3 greenhouse gas (GHG) emissions.
‘Boundaries’ And ‘Assumptions’Equinor has set “boundaries and assumptions” for the net-zero
goals.
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM 7
strengthen our climate ambitions, aiming to reach net zero by 2050.”To develop into a “broad energy company, renewables will be a
significant growth area.” Equinor previously set a strategy to profit-ably grow its alternative energies business with production capacity of 4-6 GW by 2026 and 12-16 GW by 2035.
“Equinor now plans to expand its acquisition of wind acreage, with the aim of accelerating profitable growth and will continue to leverage its leading position in offshore wind,” management said. Renewables are to become a separate reporting segment beginning with results in 1Q2021.
“Climate change is a shared challenge,” Opedal said. “The com-bined efforts of governments, industries, investors and consumers are crucial to reaching net-zero emissions, for Equinor and for society.
Together, we can overcome technological and commercial challenges, cut emissions, and develop CCS and zero-emission value chains for a net-zero future.”
‘Significant Uncertainty’Last week Equinor also issued its third quarter results,
which were “impacted by weak prices as regions across the world” are “still severely affected by the pandemic,” said former CEO Eldar Sætre.
“Significant uncertainty remains around the future commodity price development underlining the importance of increased competitiveness and financial resilience.”
CFO Lars Christian Bacher said Equinor has reduced short- and long-term oil price assumptions.
“Our focus has been, as always, on long-term, fundamen-tal trends, volatility and market reactions,” he said. Based on our analysis, including supply as well as demand …cont' pg. 9
Source: Tallgrass Energy LP, NGI calculations. For more info and daily 10am ET updates of this chart, go to natgasintel.com/rextracker.
“Success will depend on society moving toward net zero in 2050,” it said. “We assume a well functioning market for carbon capture and storage and natural sinks, and that these mechanisms can be accounted for as negative scope 3 emissions.”
Equinor also assumes that a hydrogen market will be developed. In addition, it assumes that “an increasing share of oil and gas will be used for petrochemicals toward 2050.”
Equinor launched a strategy earlier this year to achieve carbon neutral global operations by 2030 and reduce absolute GHG emis-sions in Norway to near zero by 2050.
“Equinor has for years demonstrated an ability to deliver on climate ambitions and has a strong track record on lowering emis-sions from oil and gas,” Opedal said. “Now, we are ready to further
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM8
NatGasIntel.com/MX-Price
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM 9
POWER GENERATIONPinnacle West’s Arizona Utility Dodges Summer Heat Issues with Mix of Fuels, Conservation
During the hottest July and Au-gust temperatures ever recorded, Phoenix-based Arizona Public Ser-vice (APS) relied on its fossil fuel generation fleet, along with nuclear and customer conservation, to avoid a power emergency, the CEO of parent company Pinnacle West Capital Corp. said last week.
“Our fossil fleets equivalent avail-ability factor, or the percentage of time a plant is available, was 95.3% from June through September,” said CEO Jeff Guldner. The Palo Verde Nuclear Generating Plant’s factor was 100.2% during the same four-month time frame.
“We relied heavily on our basel-oad and fast-ramping assets, including the Four Corners,” …cont' pg. 10
impacts, we expect average oil prices to gradually increase to $65/bbl in 2025, with a continued modest uptick toward 2030. After 2030, we expect a gradual decline to $64 in 2040 and below $60 in 2050.
“Clearly, oil price estimates that far out in time are associated with great uncertainty. But remember, we require sanctioned projects to be robust at much lower prices than these long term levels.”
In February the executive team presented a project portfolio for new deals to be put online by 2026 representing around 6 billion boe at an average breakeven oil price of below $35/bbl.
Global natural gas sales volumes amounted to 14.1 billion standard cubic meters (bcm) in the quarter, an increase of 1.6 bcm from 3Q2019. Entitlement gas was 12.6 bcm, up 1.4 bcm year/year, mainly from higher volumes on the Norwegian continental shelf.
The average invoiced European natural gas sales price was 48% lower from a year ago, management said. Average invoiced North American piped gas sales price decreased by 23% because of lower Henry Hub gas prices.
In other news, the recent fire at the Melkøya liquefied natural gas (LNG) processing plant in Norway could require the plant to be shut-in for a year for repairs, Bacher said. An undersea pipeline transports gas from the Barents Sea to the processing station, where it is converted into LNG and then exported.
Equinor delivered total equity production of nearly 2 million boe/d in 3Q2020, versus 1.9 million boe/d a year ago. Adjusting for portfolio transactions and government-imposed curtailments, underly-ing production growth was around 9%.
“For 2020, we expect a production growth between 1.5% and 2%,” Sætre said. “This outlook depends on how the European gas market develops where we use our gas production flexibility to boost value creation.”
Expected capital expenditures (capex) this year is around $1.1 billion. The guided organic capex levels for 2020 and 2021 “are unchanged at around $8.5 billion and $10 billion respectively,” said the former CEO.
Equinor lost $2.1 billion in 3Q2020, versus a year-ago loss of $1.1 billion. Results in the Exploration and Production (E&P) International seg-ment were impacted by low prices, par-tially offset by a reduction in costs. The E&P USA segment was also impacted by weak prices, while continuing efforts to reduce activity and costs.
Net impairments to 3Q2020 earnings included $1.38 billion in the E&P USA segment, with $1.21 billion related to reducing the value of its U.S. onshore portfolio, mostly for impair-ments to the Bakken Shale portfolio.
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM10
a coal-fired unit, along with the natural gas-fired Ocotillo plant and Palo Verde. “Those plants were all available when we needed them.”
Guldner said on Aug. 18-19, APS asked for voluntary conserva-tion and customers collectively came up with 240 MW of savings. At the same time, personnel worked with firefighters during a season in which more than 900,000 acres burned, compared to the yearly average of 250,000 acres.
APS experienced “minimal impacts” to utility infrastructure despite the record wildfire season, Guldner said.
“We are still making lasting impacts on our service area despite a pandemic, record-breaking hot summer, regional capacity shortages, and wildfires,” he said.
Longer term, APS is working with the Arizona Corporation Commission (ACC) on plans to be carbon free by 2050. Guldner said reaching that goal will require “strong regulatory partnership, an organized transition away from coal and fossil fuels, and support for an expansion of renewables, battery storage and energy efficiency.”
The ACC last Thursday took action that should result in a pro-ceeding next year to establish statewide rules with phased-in goals for achieving the transition toward electrIfication by 2050.
For 3Q2020, Pinnacle West reported net income of $346.4 million ($3.07/share), compared with $312.3 million ($2.77) for the same period a year ago.
…from LIQUEFIED NATURAL GAS - Berkshire Hathaway Taking Over, pg., 1
…from LIQUEFIED NATURAL GAS - France’s Engie Scraps Proposed, pg., 1
The planned sale of Dominion’s interests in the Questar Pipe-lines is expected to be completed in early 2021 after regulatory clear-ance. Dominion received about $1.3 billion in cash in anticipation of selling the interests and would transfer about $430 million in debt once completed.
Cove Point LNG, as it is now formally known, has export ca-pacity of 5.25 million metric tons/year, equivalent to 670 MMcf/d of gas, and storage capacity equivalent to 14.6 Bcf. The facility, which started exporting in April 2018, initially was built in the 1970s to import LNG. It still has regasification capacity of 1.8 Bcf/d.
Cove Point’s export capacity is fully subscribed under 20-year take-or-pay deals with Pacific Summit Energy LLC, a U.S. affiliate of Japan’s Sumitomo Corp., and Gail (In-dia) affiliate Gail Global (USA) LNG LLC. Sumitomo has agreements to serve Tokyo Gas Co. and Kansai Electric Power Co. Inc.
Dominion CEO Thomas F. Farrell said in July the sale would allow Dominion to focus on its state-regulated utilities.
Energy consultancy Genscape Inc. said the acquired assets would be part of a new company called Berkshire Hathaway Energy Gas Transmission and Storage, a standalone subsidiary of Berkshire Hatha-way Energy’s Pipeline Group.
have started in 2026.“The rejection of this contract by the government and Engie is
a new explicit recognition of the climatic, environmental and social ravages of shale gas,” Lorette Philippot, private finance campaign manager of French environmental group Les Amis de la Terre (Friends of the Earth), told NGI.
“Whatever the outcome of tonight’s (U.S. presidential) election, we expect France to pursue a consistent policy of zero tolerance for unconventional hydrocarbons,” said Phillipot, whose group urged the government to reject the proposed Rio Grande deal. “This requires refusing to import and consume shale oil and gas, just as we refused to produce it nearly a decade ago.”
The group also called on French bank Societe Generale SA to stop working on the project. In May 2017, NextDecade appointed Societe Generale and Macquarie Capital Inc. as financial advisors.
U.S. Legislators Weigh InA group of 20 U.S. House of Representatives members on
Monday sent a letter to French President Emmanuel Macron saying the government had “unfortunately intervened” to nix the Engie deal “on a misinformed assumption that U.S. shipments are supposedly more greenhouse gas (GHG) intensive from a life-cycle perspective than other foreign gas supply.”
The legislators asked the French government to reconsider the “ill-informed decision, which we believe is detrimental to our joint energy security goals and efforts to reduce GHG emissions.”
The letter said that “our official government analysis” shows that U.S. LNG exports to the European Union, including France, “result in fewer emissions than some of the largest exporters of natural gas to France, including Russia and Algeria.”
The House members thanked Macron for his “thoughtful res-ervations” about completion of the controversial $11.2 billion, 5.3 Bcf/d Nord Stream 2 pipeline that would traverse the Baltic Sea from Russia, to Greifswald, Germany.
The representatives added that they have “deep concerns” that Russia is using non-governmental organizations “to influence the decision-making process in Paris” to block initiatives designed to reduce European reliance on Russian energy exports.
government owns a 23.63% share in the company. The proposed deal was slated to run until 2045, meaning that exports would
NGI’s Daily Gas Price Index Wednesday, November 4, 2020
NATGASINTEL.COM | @NGINEWS | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM 11
…from LIQUEFIED NATURAL GAS - Low Commodity Prices, pg., 1
Daily Gas Price Index is published daily, each business day by Intelligence Press, Inc. (703) 318-8848.For breaking natural gas and shale news and more detailed pricing data, please visit us at: naturalgasintel.comFor a listing of all our premium newsletters and data services, please visit: naturalgasintel.com/premiumservicesExecutive Publisher: Dexter Steis ([email protected]). Editor-In-Chief: Alex Steis ([email protected]). Managing Editor: Carolyn L. Davis ([email protected]). Analysts/ Price Editors: Patrick Rau, CFA ([email protected]), Nathan Harrison ([email protected]), Josiah Clinedinst ([email protected]). Senior Editor – Markets: Leticia Gonzales ([email protected]). Senior Editor – LNG: Jamison Cocklin ([email protected]). Senior Editor – Mexico and Latin America: Christopher Lenton ([email protected]). Associate Editor – Markets: Kevin Dobbs ([email protected]). Associate Editor: Andrew Baker ([email protected]). Associate Editor – LNG: Ron Nissimov ([email protected]). Markets Contributor: Jeremiah Shelor ([email protected]). Correspondents: Richard Nemec ([email protected]), Gordon Jaremko ([email protected]), Ronald Buchanan ([email protected]), Eduardo Prud’homme ([email protected]), Adam Williams ([email protected]). Contact us: EDITORIAL: [email protected]; PRICING: [email protected]; SUPPORT/SALES: [email protected]; ADVERTISE: [email protected] Press, Inc. © Copyright 2020. Contents may not be reproduced, stored in a retrieval system, accessed by computer, or transmitted by any means without a site license or prior written permission of the publisher. DISCLAIMERS, LIMITATION OF WARRANTY AND LIABILITY: The Information contained in this newsletter (our Content) is intended as a professional reference tool. You are responsible for using professional judgment and for confirming and interpreting the data reported in our Content before using or relying on such information. OUR CONTENT IS PROVIDED "AS IS" AND WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR YOUR PARTICULAR PURPOSE. Although we believe our Content to be complete and accurate as described therein, we make no representations regarding completeness or accuracy. We will not be liable for any damage or loss of any kind arising out of or resulting from access or lack of access to or use of our Content, including but not limited to your reliance on it, errors in the data it contains, and data loss or corruption, regardless of whether such liability is based in tort, contract or otherwise. NGI’s full Subscriber Agreement is available here: naturalgasintel.com/TOS.
Daily Gas Price Index
Wednesday, November 4, 2020Volume 28, No. 84
ISSN 1532-1223 (print)ISSN 1532-1231 (online)
circumstances” amid the coronavirus outbreak. The third quarter was an improvement as oil prices were above
$40.00/bbl and fuel demand returned for transportation, Pouyanne said. However, the environment was still mixed as crude, natural gas and liquefied natural gas (LNG) prices remained challenged.
Third quarter oil prices were 31% lower year/year. European natural gas prices were 26% lower, while those in Asia were down 23% over the same period. Henry Hub prices were 9% lower in the third quarter compared with a year ago. Low commodity prices dragged down average LNG prices by 40% year/year in the third quarter to $3.57/MMBtu.
Average LNG prices also fell by 19% from the second quarter “due to the delayed impact of lower oil prices in the first half of 2020 on long-term contracts,” the company said. LNG buyers with contracts linked to oil typically pay the average price of crude over the previous three to six months.
While management cautioned that the oil market environment remains uncertain, average LNG prices should improve in 4Q2020 given the increase in crude prices. Total is among the world’s largest LNG companies.
Total reported another increase in LNG sales, which were up by 9% year/year to 8.1 million tons, primarily from an increase in trading activities.
The company produced 2.7 million boe/d in the third quarter, down 11% year/year. The decline resulted mainly from Total’s com-pliance with production quotas implemented by the Organization of the Petroleum Exporting Countries and its allies.
Total reported third quarter net income of $202 million (4 cents/share), compared with net income of $2.8 billion ($1.05) in 3Q2019.
