gas daily - s&p global daily sa… · aeement indexed to brent and ugr s gas prices analysis:...

Wednesday, April 3, 2019

GAS DAILY

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News HeadliNes

aNalYsis: shell deal to buy lNG from Nextdecade Texas project solidifies North american position■■ shell taking offtake from several North american projects■■ agreement indexed to Brent and Us gas prices

aNalYsis: Bargain offering meant to pick Us Magnolia lNG out of doldrums■■ Urgency to secure foundation customers■■ Company had previously planned to reach Fid last year

waha and el Paso Permian settle at new all time low, more than minus $3/MMBtu■■ Permian production eases from all-time highs■■ waha cash gas trades as low as negative $6.6/MMBtu

Growing Bakken gas volumes take up larger percentage on Northern Border■■ Bakken squeezing out some Canadian imports■■ New processing capacity helps grow volumes

iNside THis issUePHMSA administrator updates lawmakers on long-delayed safety rules 6Algerian president steps down; country is major supplier of gas to Europe 7Kogas tendering to replace 9 mil mt/year of LNG contracts expiring 2025: CEO 7Japan’s Jera, Europe’s EDF complete LNG optimization, trading merger 8Australia lifts LNG export forecasts, expects to be world’s leading supplier in 2019 8Market players welcome BP LNG master agreement template 9Qatar LNG expansion ‘full-steam ahead’ for 2024 start: Al-Kaabi 9Producer plans to drill for gas on site next to Pennsylvania steel mill 10NYMEX May settles 2.4 cents lower at $2.684/MMBtu on weakening demand 11Regional Gas Markets 12Gas Daily Supplement Links 16

Final Daily Price Survey - PlattS locationS ($/MMBtu)NATIONAL AVERAGE PRICE: 2.400Trade date: 02-AprFlow date(s): 03-Apr

Midpoint +/- absolute Common Vol. deals

Northeast

Algonquin, city-gates IGBEE21 2.685 -0.175 2.660-3.000 2.660-2.770 309 53

Algonquin, receipts IGBDK21 2.525 +0.030 2.525-2.550 2.525-2.530 20 3

Dracut, Mass. IGBDW21 — — ——- ——- — —

Iroquois, receipts IGBCR21 2.625 -0.065 2.600-2.670 2.610-2.645 110 41

Iroquois, zone 1 IGBRP21 — — ——- ——- — —

Iroquois, zone 2 IGBEJ21 2.650 -0.065 2.650-2.670 2.650-2.655 50 14

Niagara IGBCS21 2.600 -0.025 2.600-2.600 2.600-2.600 30 8

Tennessee, z5 (200 leg) IGBRQ21 2.750 -0.095 2.750-2.750 2.750-2.750 84 7

Tennessee, z6 (300 leg) del. IGBJC21 — — ——- ——- — —

Tennessee, zone 6 del. IGBEI21 2.795 -0.220 2.720-2.950 2.740-2.855 263 63

Tennessee, zone 6, del. North IGBRR21 2.895 -0.445 2.850-2.950 2.870-2.920 37 13

Tennessee, zone 6, del. South IGBRS21 2.780 -0.145 2.720-2.820 2.755-2.805 227 50

Tx. Eastern, M-3 IGBEK21 2.535 -0.100 2.505-2.570 2.520-2.550 427 94

Transco, zone 5 del. IGBEN21 2.655 -0.135 2.570-2.725 2.615-2.695 458 85

Transco, zone 5 del. North IGCGL21 2.655 -0.160 2.650-2.660 2.655-2.660 36 6

Transco, zone 5 del. South IGCHL21 2.655 -0.135 2.570-2.725 2.615-2.695 422 79

Transco, zone 6 N.Y. IGBEM21 2.585 -0.185 2.540-2.600 2.570-2.600 166 29

Transco, zone 6 non-N.Y. IGBEL21 2.570 -0.150 2.500-2.750 2.510-2.635 223 49

Transco, zone 6 non-N.Y. North IGBJS21 2.570 -0.150 2.500-2.600 2.545-2.595 223 48

Transco, zone 6-non-N.Y. South IGBJT21 2.750 -0.050 2.750-2.750 2.750-2.750 0.1 1

Northeast regional average IGCAA00 2.635

appalachia

Columbia Gas, App. IGBDE21 2.525 -0.050 2.475-2.550 2.505-2.545 1122 213

Columbia Gas, App. non-IPP IGBJU21 — — ——- ——- — —

Dominion, North Point IGBDB21 2.460 -0.035 2.430-2.480 2.450-2.475 143 33

Dominion, South Point IGBDC21 2.450 -0.050 2.410-2.470 2.435-2.465 599 103

Lebanon Hub IGBFJ21 2.535 -0.035 2.530-2.540 2.535-2.540 114 23

Leidy Hub IGBDD21 — — ——- ——- — —

Millennium, East receipts IGBIW21 2.480 -0.050 2.450-2.500 2.470-2.495 155 35

Tennessee, zone 4-200 leg IGBJN21 2.530 -0.045 2.500-2.560 2.515-2.545 281 42

Tennessee, zone 4-300 leg IGBFL21 2.380 -0.130 2.355-2.400 2.370-2.390 135 32

Tennessee, zone 4-313 pool IGCFL21 2.540 -0.035 2.500-2.550 2.530-2.550 142 20

Texas Eastern, M-2 receipts IGBJE21 2.425 -0.080 2.380-2.450 2.410-2.445 955 149

Transco, Leidy Line receipts IGBIS21 2.495 -0.055 2.420-2.530 2.470-2.525 214 36

Appalachia regional average IGDAA00 2.480

Midcontinent

ANR, Okla. IGBBY21 2.395 -0.080 2.340-2.460 2.365-2.425 189 47

Enable Gas, East IGBCA21 2.465 -0.060 2.400-2.540 2.430-2.500 64 16

NGPL, Amarillo receipt IGBDR21 2.500 -0.050 2.480-2.510 2.495-2.510 183 34

NGPL, Midcontinent IGBBZ21 2.475 -0.015 2.400-2.510 2.450-2.505 963 136

Oneok, Okla. IGBCD21 1.655 +0.220 1.600-1.700 1.630-1.680 224 38

Panhandle, Tx.-Okla. IGBCE21 2.200 -0.090 2.050-2.300 2.140-2.265 455 100

Southern Star IGBCF21 2.130 -0.065 1.850-2.450 1.980-2.280 80 12

Tx. Eastern, M-1 24-in. IGBET21 2.590 -0.035 2.570-2.600 2.585-2.600 2 3

Midcontinent regional average IGEAA00 2.300

Upper Midwest

Alliance, into interstates IGBDP21 2.580 -0.035 2.575-2.605 2.575-2.590 735 87

ANR, ML 7 IGBDQ21 2.600 -0.035 2.590-2.620 2.595-2.610 47 5

Chicago city-gates IGBDX21 2.590 -0.030 2.575-2.620 2.580-2.600 909 150

Chicago-Nicor IGBEX21 2.590 -0.030 2.575-2.620 2.580-2.600 379 71

Chicago-NIPSCO IGBFX21 2.585 -0.045 2.580-2.600 2.580-2.590 251 40

Chicago-Peoples IGBGX21 2.590 -0.030 2.580-2.620 2.580-2.600 279 39

Consumers city-gate IGBDY21 2.590 -0.030 2.580-2.650 2.580-2.610 465 68

Dawn, Ontario IGBCX21 2.575 -0.035 2.545-2.600 2.560-2.590 566 89

Emerson, Viking GL IGBCW21 2.300 -0.120 2.210-2.500 2.230-2.375 211 47

Mich Con city-gate IGBDZ21 2.570 -0.035 2.565-2.585 2.565-2.575 674 90

Northern Bdr., Ventura TP IGBGH21 2.545 -0.055 2.520-2.570 2.535-2.560 200 38

Northern, demarc IGBDV21 2.545 -0.060 2.520-2.580 2.530-2.560 325 53

Northern, Ventura IGBDU21 2.540 -0.065 2.515-2.570 2.525-2.555 249 46

REX, Zone 3 delivered IGBRO21 2.545 -0.020 2.525-2.565 2.535-2.555 1090 191

Upper Midwest regional average IGFAA00 2.545

($/MMBtu)

SPOT PRICE AND BASIS CHANGES

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Source: S&P Global Platts

Daily spot price changeDaily cash basis changeDaily spot price change from bidweek

2

Wednesday, april 3, 2019Gas daily

© 2019 s&p Global platts, a division of s&p Global inc. all rights reserved.

Final Daily price survey - platts locations ($/MMBtu)Trade date: 02-AprFlow date(s): 03-Apr

Midpoint +/- Absolute Common Vol. Deals

PlaTTs iCe Gas iNdiCes aMeriCas (Gia), ($/MMBtu)Trade date: apr 02Flow date(s): apr 03 average daily Change

GIA Northeast IGKAA00 2.467 -0.081

GIA South IGLAA00 -0.239 -1.622

GIA Midwest IGMAA00 2.511 -0.038

GIA West IGNAA00 2.222 +0.028

GIA North America IGOAA00 1.802 -0.399

assessment rationale: The GIA daily natural gas indices comprise 20 locations across 4 regions in the US and Canada and are based upon trade data reported to Platts by market participants and the Intercontinental Exchange. Details on GIA methodology can be found at https://www.spglobal.com/platts/en/our-methodology/methodology-specifications/natural-gas. Details on historical prices and locations, location weightings, and region weightings can be found at http://plattsinfo.platts.com/GIA.

This rationale applies to symbols found in market category GH listed at http://plts.co/uwHX30kyPG0

2�DAY�AHEAD TEMPERATURE FORECAST MAP

Source: S&P Global Platts, Custom Weather

PlattS natural GaS Daily aSSeSSment rationalePlatts Gas Daily indices are based upon trade data reported to Platts by market participants and the Intercontinental Exchange.

These locations were assessed by Platts and deviated from the standard volume weighted average methodology in the following ways:

1. Agua Dulce: Price of $2.75/MMBtu was assessed at a 7-cent premium to Houston Ship Channel based on recent daily gas trading activity.

This rationale applies to symbols found in the Market Data category GD listed at http://plts.co/uwHX30kyPG0

east Texas

Agua Dulce Hub IGBAV21 2.750** -0.060 2.750-2.750 2.750-2.750 0 0

Carthage Hub IGBAF21 2.545 -0.030 2.525-2.550 2.540-2.550 135 24

Florida Gas, zone 1 IGBAW21 2.620 -0.035 2.590-2.630 2.610-2.630 41 5

Houston Ship Channel IGBAP21 2.680 -0.060 2.650-2.700 2.670-2.695 201 41

Katy IGBAQ21 2.685 -0.050 2.660-2.740 2.665-2.705 692 77

NGPL, STX IGBAZ21 2.640 -0.060 2.640-2.640 2.640-2.640 3 2

NGPL, Texok zone IGBAL21 2.520 -0.015 2.485-2.570 2.500-2.540 1558 183

Tennessee, zone 0 IGBBA21 2.595 -0.030 2.570-2.600 2.590-2.600 486 70

Tx. Eastern, ETX IGBAN21 2.585 +0.000 2.570-2.605 2.575-2.595 39 13

Tx. Eastern, STX IGBBB21 2.615 -0.030 2.600-2.640 2.605-2.625 229 42

Transco, zone 1 IGBBC21 2.635 -0.055 2.590-2.700 2.610-2.665 100 18

Transco, zone 2 IGBBU21 2.580 -0.070 2.580-2.600 2.580-2.585 19 4

East Texas regional average IGGAA00 2.620

louisiana/southeast

ANR, La. IGBBF21 2.585 -0.030 2.525-2.605 2.565-2.605 152 28

Columbia Gulf, La. IGBBG21 2.555 -0.090 2.530-2.620 2.535-2.580 48 12

Columbia Gulf, mainline IGBBH21 2.545 -0.045 2.500-2.560 2.530-2.560 790 106

Florida city-gates IGBED21 — — ——- ——- — —

Florida Gas, zone 2 IGBBJ21 2.630 -0.040 2.630-2.635 2.630-2.630 57 4

Florida Gas, zone 3 IGBBK21 2.650 -0.055 2.630-2.690 2.635-2.665 513 46

Henry Hub IGBBL21 2.735 +0.020 2.675-2.745 2.720-2.745 316 56

Southern Natural, La. IGBBO21 2.640 -0.045 2.615-2.670 2.625-2.655 458 76

Tennessee, zone 1 IGBHI21 2.580 -0.040 2.550-2.610 2.565-2.595 258 31

Tennessee, 500 Leg IGBBP21 2.635 -0.045 2.605-2.650 2.625-2.645 647 110

Tennessee, 800 Leg IGBBQ21 2.590 -0.040 2.575-2.610 2.580-2.600 436 75

Tx. Eastern, ELA IGBBS21 2.560 -0.060 2.560-2.590 2.560-2.570 190 38

Tx. Eastern, M-1 30-in. IGBDI21 2.505 -0.105 2.490-2.550 2.490-2.520 3 4

Tx. Eastern, WLA IGBBR21 2.590 -0.065 2.580-2.605 2.585-2.595 433 54

Tx. Gas, zone 1 IGBAO21 2.555 -0.045 2.515-2.590 2.535-2.575 610 73

Tx. Gas, zone SL IGBBT21 2.520 -0.065 2.510-2.530 2.515-2.525 24 6

Transco, zone 3 IGBBV21 2.625 -0.055 2.590-2.645 2.610-2.640 494 69

Transco, zone 4 IGBDJ21 2.640 -0.065 2.605-2.675 2.625-2.660 1334 198

Trunkline, ELA IGBBX21 2.620 +0.005 2.620-2.620 2.620-2.620 0.8 1

Trunkline, WLA IGBBW21 — — ——- ——- — —

Trunkline, zone 1A IGBGF21 2.525 -0.055 2.520-2.580 2.520-2.540 124 19

Louisian/Southeast regional average IGHAA00 2.595

rockies/Northwest

Cheyenne Hub IGBCO21 2.385 +0.020 2.360-2.410 2.375-2.400 472 72

CIG, Rockies IGBCK21 2.340 +0.040 2.320-2.390 2.325-2.360 113 24

GTN, Kingsgate IGBCY21 2.315 +0.100 2.300-2.350 2.305-2.330 26 9

Kern River, Opal IGBCL21 2.455 +0.095 2.400-2.480 2.435-2.475 795 122

NW, Can. bdr. (Sumas) IGBCT21 2.535 +0.130 2.500-2.600 2.510-2.560 280 65

NW, s. of Green River IGBCQ21 2.120 +0.125 1.980-2.320 2.035-2.205 210 35

NW, Wyo. Pool IGBCP21 2.440 +0.080 2.380-2.480 2.415-2.465 502 88

PG&E, Malin IGBDO21 2.470 +0.075 2.440-2.540 2.445-2.495 271 58

Questar, Rockies IGBCN21 2.430 +0.105 2.430-2.430 2.430-2.430 10 2

Stanfield, Ore. IGBCM21 2.440 +0.115 2.435-2.450 2.435-2.445 130 29

TCPL Alberta, AECO-C* IGBCU21 1.275 -0.105 1.235-1.310 1.255-1.295 686 156

Westcoast, station 2* IGBCZ21 0.470 -0.095 0.450-0.500 0.460-0.485 37 9

White River Hub IGBGL21 2.415 +0.050 2.385-2.470 2.395-2.435 414 56

Rockies/Northwest regional average IGIAA00 2.395

southwest

El Paso, Bondad IGBCG21 1.785 +0.485 1.750-1.800 1.775-1.800 30 6

El Paso, Permian IGBAB21 -3.325 -3.240 -6.600-1.950 -5.465—1.190 714 150

El Paso, San Juan IGBCH21 1.830 +0.555 1.750-2.200 1.750-1.945 506 84

El Paso, South Mainline IGBFR21 2.210 +0.665 1.900-2.430 2.080-2.345 74 16

El Paso, West Texas IGBRT21 -3.880 -3.665 -6.600—1.450 -5.170—2.595 633 127

Kern River, delivered IGBES21 2.815 +0.040 2.745-2.900 2.775-2.855 480 89

PG&E city-gate IGBEB21 3.705 +0.025 3.685-3.730 3.695-3.715 692 113

PG&E, South IGBDM21 1.925 +0.435 1.850-2.250 1.850-2.025 116 28

SoCal Gas IGBDL21 2.610 +0.270 1.600-2.940 2.275-2.940 408 82

SoCal Gas, city-gate IGBGG21 3.550 +0.050 3.500-3.640 3.515-3.585 499 114

Transwestern, Permian IGBAE21 -1.435 -1.360 -5.250-0.250 -2.810—0.060 41 10

Transwestern, San Juan IGBGK21 1.950 +0.650 1.750-2.300 1.815-2.090 83 16

Waha IGBAD21 -3.755 -3.615 -6.600—0.500 -5.280—2.230 537 104

Southwest regional average IGJAA00 1.155

*Price in C$ per gj; C$1=US$0.7494; **Assessed Price; Volume in 000 MMBtu/day. Symbols represent gas

flow date.

3



PlattS GaS Daily mexico PriceS ($/MMBtu)Trade Date: 02-AprFlow Date(s): 03-Apr

location region Net Forward Net Forward Transport location Price Cost Price

Rosarito Baja AAZMC21 Socal Border 2.610 0.190 2.800

Aguascalientes Central AAZMO21 El Encino -3.077 0.578 -2.499

Tula Central AAZMN21 Tuxpan 3.672 0.545 4.217

Valtierrilla Central AAZMH21 Los Ramones - Monterrey 3.255 0.615 3.870

Villa de Reyes Central AAZMI21 Los Ramones - Monterrey 3.255 0.579 3.834

El Encino North AAZME21 Waha -3.755 0.678 -3.077

Juarez North AAZMA21 Waha -3.755 0.521 -3.234

Los Ramones - Northeast AAZMF21 Tennessee, zone 0 2.595 0.660 3.255Monterrey

Reynosa Northeast AAZMB21 TETCO STX 2.615 0.512 3.127

Sierrita Northwest AAZMD21 Waha -3.755 0.973 -2.782

Topolobambo Northwest AAZMP21 El Encino -3.077 0.554 -2.523

Merida Peninsula AAZMK21 Ciudad Pemex 3.986 0.684 4.670

Ciudad Pemex South AAZMJ21 Tuxpan 3.672 0.314 3.986

Puente Moreno South AAZMG21 Los Ramones - Monterrey 3.255 0.492 3.747

Tuxpan South AAZML21 Reynosa 3.127 0.545 3.672

Guadalajara West AAZMM21 Aguascalientes -2.499 0.637 -1.862

Prices are a netforward calculation using selected Platts Gas Daily indices plus fully loaded transportation costs and are published in USD per MMBtu.

cre mexico natural GaS PriceSType Month Price Price Vol.(GJ) Counter- deals deals (MXN/GJ) ($/MMBtu) parties reported excl.IPGN ACRPA00 Jun-18 74.7387 3.8824 170329829.7 21 183 7IPGN ACRPA00 Jul-18 74.1109 4.0901 215370674.4 20 205 9IPGN ACRPA00 Aug-18 73.6902 4.1336 245943829.2 21 207 11IPGN ACRPA00 Sep-18 78.1838 4.3292 229240571.9 20 214 7IPGN ACRPA00 Oct-18 66.1140 3.6590 198724042.1 21 273 11IPGN ACRPA00 Nov-18 74.5959 3.8866 212784184.4 NA NA NAIPGN ACRPA00 Dec-18 87.9815 4.6005 196440198.0 22 294 13IPGN ACRPA00 Jan-19 79.6786 4.3749 205463002.7 23 286 13IPGN ACRPA00 Feb-19 69.4891 3.8204 186743113.5 22 297 13Region I ACREB00 Jan-19 55.2865 3.0356 0 1 25Region II ACREC00 Jan-19 69.2036 3.7998 0 1 33Region III ACRED00 Jan-19 91.3877 5.0178 0 3 57Region IV ACREE00 Jan-19 85.8249 4.7124 0 1 28Region V ACREF00 Jan-19 90.7258 4.9815 0 4 114Region VI ACREG00 Jan-19 104.2683 5.7251 0 2 29Region I ACREB00 Feb-19 67.9840 3.7377 NA 1 23Region II ACREC00 Feb-19 44.1659 2.4282 NA 1 34Region III ACRED00 Feb-19 81.2379 4.4664 NA 2 63Region IV ACREE00 Feb-19 105.5852 5.8050 NA 1 29Region V ACREF00 Feb-19 75.2313 4.1361 NA 4 116Region VI ACREG00 Feb-19 66.1916 3.6392 NA 1 32

Prices are published by CRE and reflect the weighted average of natural gas transactions reported by month.

4



aNalYsis: shell deal to buy lNG from Nextdecade Texas project solidifies North american position

■■ shell taking offtake from several North american projects■■ agreement indexed to Brent and Us gas prices

Shanghai, China—Shell further diversified its access to North American LNG volumes with a long-term offtake agreement Tuesday that provides support for NextDecade’s proposed export terminal in Texas.

The move, announced during the LNG2019 conference in China, will help the portfolio player protect itself against volatility in the market in terms of pricing and shipping costs, while also acting as a hedge against the potential that one or more of the projects it is involved in does not go forward or is delayed.

With a forecast of tightening global supply in the early to mid-2020s, US LNG developers, in particular, are competing with each other for commercial deals with end users in Asia, Europe, the Middle East and Latin America. Buyers these days are pressing for more flexibility on terms, including cost, length of contract and destination. Integrated majors like Shell are well suited for the next wave of projects, though more deals will be needed for many of the terminals to get built.

“The US is the fastest growing source of new LNG supply, so it makes sense for us to be involved,” Steve Hill, an executive vice president in Shell’s unit that provides natural gas and LNG, said in an interview on the sidelines of the conference. “Diversification helps from several perspectives. You reduce your operational risk on any one project. Having different locations provides different options for which cargoes go where.”

For NextDecade, the deal couldn’t come at a more important time for the developer of the up to 27 million mt/year Rio Grande LNG terminal project in Brownsville, in the southernmost portion of Texas on the Gulf of Mexico.

The 20-year sales and purchase agreement calls for Shell to buy LNG on a free-on-board basis starting from the commercial operation date of Rio Grande LNG, currently expected in 2023. Three quarters of the agreement will be indexed to Brent, with the rest indexed to US gas prices, including Henry Hub, CEO Matt Schatzman said during a briefing at the company’s booth at the conference.

Further long-term contractsShell becomes the first foundation customer for the project, but

NextDecade will need more if it is going to proceed to a final investment decision on up to three liquefaction trains, or approximately 13.5 million mt/year of LNG, as part of the first phase of the project. FID is currently targeted to occur by the end of September.

“We expect to announce more SPAs in the coming months,” Schatzman said.

NextDecade also faces contractor and regulatory hurdles. A deal for McDermott International to build Rio Grande LNG fell through, and NextDecade is currently waiting for final bids from three major contractors. McDermott is part of the bid process, though it must find a joint venture partner if it ultimately takes the job. Schatzman said the company hopes to have secured a contractor to build the facility by late second quarter or early third quarter.

As for US regulators, they have expressed concerns about the cumulative environmental impact of having three LNG export terminals built in Brownsville within a similar timeframe. Texas LNG and Exelon-backed Annova LNG are also proposing facilities for Brownsville.

Market uncertainties also provide challenges for developers like NextDecade. For Asian players such as China National Offshore Oil Corp. and China National Petroleum Corp., more flexible contractual terms and business models will be required to create greater market liquidity.

“Both suppliers and demanders must further strengthen cooperation,” CNPC Chairman Wang Yilin said during a presentation at the conference.

shell’s sizeShell has long-term contracts with several major US LNG plants,

including Kinder Morgan’s Elba Liquefaction project in Georgia that is preparing to start up, as well as several proposed projects. It is a partner in the LNG Canada project in British Columbia.

Shell, through its acquisition of BG Group, was a foundation customer in Cheniere Energy’s Sabine Pass export plant in Louisiana. The terminal was the first major LNG export facility to begin operations in the US when it started up in 2016.

“I would generally view their appetite for pockets of greenfield offtake as at worst a hedge, and at best almost a venture capital-like strategy via strategically spreading around exposure,” Wells Fargo Securities analyst Michael Webber said during an interview at the Shanghai conference. “If it works, great, but if not, 2 million mt/year is not going to hurt them.”

— Harry Weber and Abache Abreu

aNalYsis: Bargain offering meant to pick Us Magnolia lNG out of doldrums

■■ Urgency to secure foundation customers■■ Company had previously planned to reach Fid last year

Shanghai, China—Australia’s LNG Ltd. is offering capacity from its Louisiana export project at a relative bargain in an effort to sign its first long-term contract and revive enthusiasm in the LNG market about its prospects, at a time when some other US developers are seeing an uptick in commercial activity.

mailto:[email protected]

5



The company is willing to take as little as $2.35/MMBtu and 113% of Henry Hub to secure offtake agreements for its up to 8.8 million mt/year Magnolia LNG project, CEO Greg Vesey said Tuesday in an interview on the sidelines of the LNG2019 conference in China.

The pitch and the public disclosure reflects the extra urgency LNG Ltd. feels to secure foundation customers to advance the project to a final investment decision, potentially as early as the second half of this year. The operator already has a permit certificate from US regulators and a fully wrapped engineering, procurement and construction contract. What it does not have yet is any buyer of its LNG.

“It’s very tough right now on the commercial front,” Vesey told S&P Global Platts. “Obviously, the trade wars are kind of putting a general malaise on the market. The good news is the Chinese customers are still working with us. They’re just not going to execute until this is resolved.”

The greenfield Magnolia LNG project fee offering appears to be quite competitive, even when compared with successful brownfield US Gulf Coast LNG export projects. Cheniere Energy sold initial capacity at Sabine Pass with liquefaction fees ranging over $2.25-$3/MMBtu and supply gas indexed to 115% of Henry Hub. Assuming a $3/MMBtu Henry Hub gas price, a Magnolia LNG cargo would load FOB for around $5.74/MMBtu, marginally more expensive than the best price Shell’s BG secured for initial capacity at Sabine Pass, and well below the Train 1-4 weighted average FOB price of around $6.23/MMBtu, Platts Analytics data showed.

LNG Ltd. had previously planned to reach FID last year, but in October 2018 delayed that until this year amid China’s imposition of a 10% tariff on imports of US LNG. Besides Magnolia LNG, the company also has proposed an export terminal in eastern Canada called Bear Head LNG. The company had previously said it continues to market capacity there, primarily to major Western Canadian Sedimentary Basin gas producers.

In late January, Vesey acknowledged in a letter to shareholders a level of urgency to secure offtake agreements with potential buyers of capacity from Magnolia LNG, after its only publicly disclosed long-term deal lapsed in December.

“I would say my level of urgency is getting higher every day until we sign,” Vesey said in the Platts interview. “That’s all we need. We got all our permits, all our financing. We could start digging tomorrow.”

— Harry Weber and staff

waha and el Paso Permian settle at new all time low, more than minus $3/MMBtu

■■ Permian production eases from all-time highs, remains far above prior year pace■■ waha cash gas trades as low as negative $6.6/MMBtu

Waha cash natural gas prices plummeted as low as negative $6.6/MMBtu Tuesday, on the back of a combination of strong local production, limited takeaway capacity and maintenance on the El Paso Natural Gas system.

The Waha index settled at an all-time low of negative $3.76/MMBtu, a drop of $3.62 on the day. Previously, Waha’s lowest settle was minus $1.95/MMBtu, which came on March 28.

Meanwhile, El Paso Keystone has averaged minus $3.23/MMBtu Tuesday, down $3.24 on day , wandering between minus $1.95/MMBtu and minus $6.6/MMBtu.

Permian Basin production is down about 500 MMcf/d from all-time highs posted last week, according to data from S&P Global Platts Analytics. But Permian output averaged 9.1 Bcf/d during the last week of March, compared with a three-year average of 5.9 Bcf/d during the same time period, hitting a high of 9.4 Bcf on March 26. Permian production is expected to total 8.2 Bcf on Tuesday, according to Platts Analytics.

There is still a force majeure declaration in place on the El Paso system. The declaration, the result of unplanned maintenance, has lasted for two weeks so far.

Work at the Florida compressor station wrapped up Saturday and a force majeure declaration there was lifted.

The force majeure declaration at Lordsburg Station is expected to be lifted April 5.

Another reason for this historic weakness in prices is the softer demand expectations for the shoulder season. Total Southwest demand averaged about 7 Bcf/d over the past two days after averaging 8.4 Bcf/d in March.

— Veda Chowdhury

Growing Bakken gas volumes take up larger percentage on Northern Border

■■ Bakken squeezing out some Canadian imports■■ New processing capacity helps grow volumes

As Bakken associated gas production continues to grow, its volumes are taking a larger and larger share on the Northern Border Pipeline, which could limit Western Canadian imports on the line this summer.

Midcon Market production is on pace for a notable build summer over summer, with production in the region already up to 1.94 Bcf/d over the last 30 days and consistently hitting the 2 Bcf/d mark over the past 10 days, according to S&P Global Platts Analytics.

This marks a more than 0.3 Bcf/d growth above the same time last year as associated production in the Bakken has grown considerably.



6



This production has little outlet to downstream markets other than Northern Border and may help drive a decrease in Western Canadian inflows if production maintains current levels throughout summer. Northern Border delivers gas from the Bakken and imports from Western Canada to markets in the Upper Midwest.

the 200 MMcf/d mark this week, according to Platts Analytics.Thus, an incremental increase of 100 to 150 MMcf/d summer over

summer from the Bakken onto Northern Border could be a reasonable estimate. If imports from Western Canada onto Northern Border are limited this summer, it could provide some downward pressure to prices at the AECO hub.

According to the North Dakota Industrial Commission, Bakken gas produced in the state has increased by a full 1 Bcf/d over the past two years to 2.7 Bcf/d as of January, a new record, according to the commission’s latest data. At the same time, operators have managed to reduce flaring by 3 percentage points over the past three months as additional processing capacity in the play comes online.

— Brandon Evans, Richard Frey, Mason McLean

PHMsa administrator updates lawmakers on long-delayed safety rules

■■ PHMsa’s elliott pressed on leak-detection regulation■■ debate over cost/benefit assessments■■ industry seeks technology pilots, performance-based rules

Amid criticism that his agency has taken eight years to move on Congressional mandated rules, a top US pipeline safety official told lawmakers Tuesday that three long-stalled items soon will be addressed.

Democratic leaders of the House of Representatives Transportation and Infrastructure Committee pressed Skip Elliott, head of the Pipelines and Hazardous Materials Safety Administration, about outstanding rulemakings Congress required in 2011 and 2016.

“It remains unacceptable that critical rules like the hazardous liquids rule, gas transmission line rule and the valve and rupture detection rule, have not been implemented,” said Representative Daniel Lipinski, Democrat-Illinois, chairman of the subcommittee on railroads, pipelines, hazardous materials. Inaction continues to place lives at risk, he said, adding that incidents increased nearly two-fold from 1999 to 2018.

Unclear holdupsFull committee Chairman Peter DeFazio, Democrat-Oregon, queried

Elliott about delays in leak-detection regulation and four other rules that have moved out of PHMSA, referencing “rumors” they may be stuck at the Office of Management Budget or the Transportation secretary’s office over cost/benefit analysis.

“I don’t know what value the secretary or one of the trolls at OMB puts on their life,” DeFazio said, “but we’re not going to rest easy until we get this all done and we make the system safer across the country.”

Elliott, for his part, outlined progress since last summer, when he said the committee had expressed frustration “loud and clear.” He explaining his agency sought to direct attention to the areas of highest risk.

PHMSA has completed work on a notice of proposed rulemaking on leak detection that is under review at the Department of Transportation, he said. PHMSA also has finished its work on the gas transmission rule, which is now undergoing review at OMB, he added. And the hazardous

Western Canada exported an average of 1.15 Bcf/d to the US at Northern Border’s Port of Morgan border point last summer, but this could fall in the summer of 2019, according to Platts Analytics.

Northern Border’s index of customers’ data indicates the vast majority of the pipe’s receipt capacity in North Dakota and at the Port of Morgan is held by marketers. Marketers can switch their receipt capacity between Western Canadian producers and Bakken producers. Furthermore, Canadian producers appear to have less than 0.3 Bcf/d of capacity held on Northern Border, with nearly the rest of the pipe’s capacity likely up for grabs to whoever prices their gas lowest.

Bakken production has made up a larger percentage of volumes on the system, particularly since late 2018. Throughout 2017 and 2018, Bakken production, mainly from North Dakota with a small amount from Montana made up an average of 46% of the volumes moving east on Northern Border, according to Platts Analytics. It has accounted for 54% of flows on the pipeline in 2019.

Part of the recent production increase comes from increased processing capacity that came online at the end of 2018. The Wild Basin processing plant, which expanded in late 2018 from 80 MMcf/d to up to 265 MMcf/d, has been ramping up all winter and hit




7



liquids pipeline rule moved out of DOT last month, he said.The agency’s field work also has paid off, he said, noting reported

pipeline incidents in 2018 were below the five-year average, as were fatalities and net volumes spilled, he said.

Jennifer Homenday, member of the National Transportation Safety Board, highlighted safety recommendations her organization has made repeatedly, including calls for automatic shutoff valves or remote controls for pipelines in high consequence areas.

“The NTSB has been studying the effects of delay in shutting down failed pipeline systems since 1970. We’ve issued recommendation after recommendation and in 2011 Congress required their implementation, yet they remain unaddressed,” she said.

She expressed frustration at a lack of transparency in the rulemaking process.

legislative adviceThe lawmakers got competing advice from industry, safety groups

and others about legislative fixes for upcoming reauthorization of the Pipeline Safety Act.

Richard Kuprewicz, president of Accufacts, pushed for more prescriptive minimum safety rules in some areas, saying the initial performance-based approach to oil and gas transmission integrity management is not working as intended.

While industry groups have recently urged DOT to quickly publish a final gas transmission and hazardous liquids safety rule, they cautioned about some other rules going forward.

Robin Rorick of the American Petroleum Institute asked PHMSA not to lose sight of a performance-based regulatory approach in outstanding rules on oil pipeline repair, LNG facilities and class location for oil pipelines.

Andy Black, president of the Association of Oil Pipelines, worried the slow pace of federal rulemaking can’t keep up with fast-moving technology innovation. He backed a pilot program to test cutting-edge safety technologies and best practices.

Carl Weimer of Pipeline Safety Trust, on the other hand, asked Congress to scrap a statutory requirement for risk assessment/cost-benefit analysis, arguing this held up rules addressing low-frequency, high-consequence incidents. He also asked Congress to end a cap on civil penalties.

— Maya Weber

algerian president steps down; country is major supplier of gas to europe

■■ algeria exports to spain, italy down from earlier in year■■ oil-indexed gas contracts out of the money

Abdelaziz Bouteflika, the embattled president of Algeria, has resigned, the official APS news agency reported Tuesday. Algeria’s exports of LNG and pipeline natural gas to Europe were not likely to be affected, according to one analyst.

The announcement of Bouteflika’s resignation comes after Algeria’s army Tuesday called for his immediate resignation.

Abdelkader Bensalah, president of the Council of the Nation, will be acting president for 90 days, during which time new presidential

elections will take place. Algeria’s constitution states the head of the upper house of parliament should serve as interim leader for up to 90 days, until a new election can be held. Boutelika announced Monday that he would resign before the end of his term on April 28.

“On the purely political front, it is highly unlikely that there would be a significant change vis a vis gas exports to Europe,” said Madeline Jowdy, S&P Global Platts Analytics senior lead analyst for LNG. “Algeria has long been a key, stable long term supplier of gas to Europe both for LNG and pipeline gas. Europe is a critical buyer for both LNG and pipleine gas while Algeria is a key supplier, particularly to Spain, which is somewhat disconnected from the European gas grid.”

OPEC member Algeria produced 91.2 Bcm of gas in 2017, down slightly year on year, according to the latest BP Statistical Review of Energy. It is the third largest gas supplier to Europe. Algeria supplied some 33 Bcm of gas to Europe by pipeline last year and also shipped some 14 Bcm of LNG — mostly to European markets — meaning any disruption to deliveries would be a serious concern for the European market.

Algerian gas supplies to Spain and Italy were as high as 78 million cu m/d in late February, but exports have dropped — especially to Italy — at the start of March, according to data from S&P Global Platts Analytics.

The country’s oil-indexed gas contracts are currently well out of the money compared with European hubs, as the bearish trend in European gas prices shows no sign of letting up.

Algerian oil production averaged 1.03 million b/d in February, unchanged from January, according to the latest S&P Global Platts survey of OPEC output. It peaked at 1.40 million b/d in September 2008, but project delays and a lack of investment have caused production to stagnate.

Bouteflika, 82, had been struggling to contain weeks of protests over unemployment, rising inflation and a sluggish economy wracked by lower oil prices. On Sunday, he named Mohamed Arkab as energy minister, replacing Mustapha Guitouni.

Arkab, who was CEO of Sonelgaz, or the National Society of Electricity and Gas, became the country’s fourth energy minister in three years and now takes over the task of overseeing long-delayed reforms to the oil and natural gas sector, whose revenues provide 60% of the country’s budget.

Bouteflika, who is in poor health, has lost the support of his allies after 20 years in power, with Algeria’s military chief calling for him to step down.

He had initially planned to run for a fifth term in office in elections planned for this month, but then indefinitely postponed them in March, while announcing that he would stay in office indefinitely.

— Brian Scheid, Joe Fisher, Illies Sahar

Kogas tendering to replace 9 mil mt/year of lnG contracts expiring 2025: ceo

South Korea’s Kogas, the world’s second largest buyer of LNG, has issued a procurement tender to replace close to 9 million mt/year of expiring term contracts in 2025, the company’s chief executive said Tuesday.

The two contracts are a 4.92 million mt/year supply deal with Qatar’s Rasgas and a 4.06 million mt/year deal with Oman LNG that will both in expire by 2025, Kogas CEO Kim Young-doo said at the LNG2019





8



conference in Shanghai.“Kogas has issued a tender process of procurement,” he said,

declining to provide further details on the process length and participants invited.

The company will also strive to negotiate greater flexibility in its trades pertaining to “contract period, volume, and application of oil and Henry Hub pricing schemes,” he added.

Kogas is facing heavy pressure from other domestic LNG importers competing with the company in downstream markets, according to Kim.

Furthermore, surging spot and short-term volumes, as well as more sophisticated types of deal-making such as location swaps, could fuel the uncertainty faced by end-users.

“The huge volumes of flexible supply [from US] will be put to the market, increasing volatility in prices and trading,” Kim said.

Two long-term contracts expired in 2018 — 1 million mt/year from Malaysia’s MLNG II project and 1 million mt/year from Brunei’s BLNG.

As part of efforts to ensure supplies, Kogas had earlier announced that it would import 700,000 mt/year of LNG from the LNG Canada project from 2024 for 40 years.

Kogas holds a 5% stake in LNG Canada; Shell holds a 40% stake, followed by Malaysia’s Petronas with a 25% interest, and PetroChina and Japan’s Mitsubishi with 15% each.

— Staff

Japan’s Jera, europe’s edF complete lNG optimization, trading merger

Japan’s Jera and European energy company EDF Trading have completed the merger of their LNG optimization and trading activities into Jera Global Markets, a move aimed at enhancing their global portfolio flexibility and risk mitigation capabilities.

The merger is part of a global trend towards greater cooperation between LNG stakeholders looking to smooth out inefficiencies in the LNG value chain, and combine trading and risk management strengths.

JERAGM will manage Jera’s and EDFT’s collective short and medium-term LNG optimization activities in the wholesale markets, Jera said in a statement Tuesday. The agreement will not affect their long-term procurement activities.

This transaction follows the successful completion of the acquisition of EDFT’s coal business by JERAGM on April 4, 2017.

“This is a great opportunity for EDFT, which strengthens our partnership with one of the largest buyers of LNG and coal in the world,” EDFT’s chief executive John Rittenhouse said.

“JERAGM would significantly contribute to building and strengthening relationships with both current and new counterparties amid global expansion of the LNG market,” Jera’s managing executive officer, who is also JERAGM’s chairman, Sunao Nakamura said.

JERA holds 66.67% of the equity in JERAGM through its wholly-owned subsidiary JERA Trading International. EDFT holds 33.33% of the shares.

— Abache Abreu

australia lifts lNG export forecasts, expects to be world’s leading supplier in 2019

■■ exports from Qatar, Us to surpass australia’s in mid-2020s■■ Production from darwin, Nws at risk of declining in early 2020s

The Australian Government has again lifted its forecast for the country’s LNG exports over the coming years and said in 2019 it will be the world’s leading exporter of the fuel and hold pole position until 2024.

Exports will be 79 million mt in calendar year 2019, which will be higher than current leader Qatar, according to the country’s chief economist’s Resources and Energy Quarterly report. On a fiscal year basis, the country is expected to export 75.6 million mt of LNG in fiscal 2018-2019 (July-June) year, which is up by 1% from the 74.9 million mt forecast it gave three months earlier. In 2019-2020, it’s tipped to export 82 million mt, which is a 5% lift from the previous 78.3 million mt forecast.

The outlook has steadily improved since the June quarter edition of the report last year when it forecast 73.3 million mt and 76.6 million mt for the two fiscal years, respectively.

The report, which comes via the Department of Industry, Innovation and Science, also forecast 82.6 million mt of exports in 2020-2021, which is up 7% from the 77 million mt figure given a year earlier; 82.6 million mt in 2021-2022, up 6% from the previous 78 million mt forecast; and 80.9 million mt in 2022-2023, up by 3% from 78.9 million mt, it said.

“While Australia is expected to remain the largest LNG exporter in the world until 2024, both Qatar and the US should close the gap on Australia towards the end of the outlook period,” it said, citing Qatar’s plans to increase export capacity to 110 million mt by around 2024, and the US’ 2024 start-up of the Golden Pass LNG facility as well a other potential new US projects and expansions.

“Australia seems likely to be surpassed as the world’s largest LNG exporter by both Qatar and the US sometime in the mid-2020s,” it said.


9



NT gas discoveryIt did note, however, that the discovery of substantial shale gas

resources in the Beetaloo sub-basin in Australia’s Northern Territory represents a longer-term opportunity for Australia.

“The Northern Territory government’s gas strategy aims to create a gas-based manufacturing industry in Darwin, as well as increasing LNG exports,” it said.

“Inpex’s Ichthys project has room for another four LNG trains, and Inpex’s chief executive has flagged the possibility that the facility could be expanded down the track,” it said.

There could also be another train added to the ConocoPhillips-operated Darwin LNG facility, it said.

However, in the shorter-term, Darwin LNG’s production is at risk of declining in the early 2020s, it said. “The project will require backfill from 2023, when gas supply from the Bayu-Undan field is expected to be exhausted.”

While ConocoPhillips’ Barossa project and Eni’s Evans Shoal field are competing to provide backfill for the project, ConocoPhillips is aiming to take a final investment decision in the Barossa project at the end of 2019, but first gas is not expected until the October-December quarter of 2023 and Eni is aiming to start production at its Evans Shoal field by the end of 2022, according to the report.

Likewise, Woodside’s North West Shelf project in Western Australia also faces backfill issues as production from existing fields are likely to decline in the early 2020s. “To what extent this can be offset by the development of new gas resources in the short term in unclear,” it said.

— Nathan Richardson

Market players welcome BP lNG master agreement template

■■ BP intends to cut time, money spent negotiating bespoke terms■■ if widely used, could accelerate commoditization, liquidity

LNG traders welcomed a move by BP to publish its LNG master sale and purchase agreement template for delivered ex-ship contracts or DES LNG MSA, they told S&P Global Platts.

“Standard terms and conditions will cut with the time and money spent negotiating bespoke terms each time and this is seen as a way to simplify trade and so increase liquidity, especially as new entrants join the market,” BP said March 29 in a statement.

“It is a first step to standardizing the contracts,” said one trader, noting the possible consequent liquidity boost.

Currently, LNG counterparties need to negotiate a set of bilateral commercial terms via a master sales and purchase agreement (MSA) before embarking on a trading relationship.

But general terms and conditions (GT&Cs) frameworks like BP’s provide a standard set of terms for counterparties to refer to when performing LNG transactions.

This means that companies have less need to seal dozens of bilateral MSAs, which vary, before starting active trading.

GT&Cs are widely adopted in the oil and pipeline natural gas markets.If widely used, a standard framework such as BP’s could accelerate

commoditization, boost transparency and lower barriers to new entrants, according to industry participants.

“Now everyone knows how [the contracts] look, all contracts look similar to this,” another trader said.

“The BP [MSA] will simplify transactions if it is adopted by the industry as a fair and neutral contract. From my experience with traders, I know their contracts are in their favor from a measurement perspective and demurrage,” said a LNG commercial adviser.

Other participants said they are looking forward to seeing if BP’s MSA would become the standard in the industry.

BP operates an LNG portfolio is which it is both a buyer and seller and its DES LNG MSA has been developed over many years to be balanced and fair between buyers and sellers, the company said.

BP’s MSA allowing either party to buy or sell physical LNG at a fixed delivery point with an open destination point was also perceived positively by participants.

Traditionally, purchase agreements for LNG have had fixed destinations, limiting the flow of the commodity between the producer and consumer.

But LNG producers in the US, Russia and other countries are moving to contracts without “destination clauses”, which means vessels from a given terminal can sail to any port, making the market more flexible and competitive.

The LNG market has become more liquid in the last five years, mainly due to the destination clause change.

In 2018, spot LNG volumes, defined as those being delivered within 90 days of the transaction date, hit 78.7 million mt, making up around 25% of total LNG imports globally, compared with 20% in 2017, according to International Group of Liquefied Natural Gas Importers data published Monday.

Long-term contracting activity also increased, with 24 new contracts signed in 2018 with a contractual length of at least 10 years, a sign that security of supply remains a strong motivation for LNG importers and aggregators.

There have been some earlier efforts to create an industry standard for trading terms and conditions. French law firm De Gaulle Fleurance & Associes also released a standard set of terms in June 2018, while Trafigura in 2017 published a similar template.

— Lucie Roux, Kenneth Foo

Qatar lNG expansion ‘full-steam ahead’ for 2024 start: al-Kaabi

Qatar is strongly committed to the expansion of LNG capacity to 110 million mt by 2024, with construction and tendering plans confirmed for the project and the associated shipping fleet, according to Saad Al-Kaabi, the country’s minister of state for energy affairs.

The construction, engineering and design contracts for the facility have been awarded to companies including McDermott, Consolidated Contractors Company and Chiyoda Corporation, Al-Kaabi, who is also the chief executive officer of Qatar Petroleum, said at the LNG2019 conference in Shanghai on Tuesday.

“The project is going full-steam ahead for a planned start-up in



10



PiPeliNe MaiNTeNaNCe

start date end date Pipeline description

19-Mar 05-Apr El Paso EPNG force majeure potentially impacting Permian takeaway capacity

2024,” Al-Kaabi said.A tender will also be issued to shipbuilders for the construction of

new ships for the expansion of the fleet, he added.Qatar’s energy minister said in February that the country is

studying the addition of 60 new LNG tankers to meet the requirements of the Qatar’s LNG expansion, and Qatar Petroleum’s Golden Pass LNG plant in Texas.

But Al-Kaabi did not mention any firm date to the project’s Final Investment Decision or inclusion of new partners for the expansion.

Al-Kaabi was also bullish on global demand growth, driven largely by emerging economies China and India. Japan and South Korea will continue to grow moderately, while Europe could experience a rise of demand after years of stagnation, he said.

Qatar LNG’s plans to reach 110 million mt/year of production, from 78 million mt/year, follow the lifting of a 12-year moratorium on the development of its offshore North Field in 2017.

— Abache Abreu

Producer plans to drill for gas on site next to Pennsylvania steel mill

A New Mexico-based gas producer has entered into an agreement with US Steel to drill for natural gas on the site of a steel mill east of Pittsburgh, and to sell the bulk of the gas produced to US Steel for its operations.

Merrion Oil & Gas, a privately owned exploration-and-production company, proposes to drill and operate an unconventional gas well site on property owned by US Steel’s Edgar Thomson Plant, in a highly industrialized region along the Monongahela River. The project represents a collaboration between the gas and steel industries, Ryan Davis, Merrion operations manager, said in an interview.

“It’s a unique opportunity to develop local gas and provide that to an iconic manufacturing facility,” Davis said. “We’re able to collocate energy extraction with an energy-intensive manufacturing progress.”

Under Merrion’s contract with US Steel, gas produced from the project will be piped to US Steel for use in its operations. “They will consume a good portion of the gas, at least on the front end of the project,” Ryan said.

He declined to say what volume of gas Merrion is contracted to provide to US Steel. Excess gas will be sold into Peoples Gas, the area’s local distribution company.

The Merrion project represents “a potential opportunity to enhance the long-term cost-competitiveness of our local Mon Valley works facilities, including the Edgar Thomson Plant,” US Steel spokeswoman Meghan Cox said in an email statement. She said the project would provide natural gas for her company’s daily operations “at an

advantaged price.”The producer’s initial plans call for drilling six wells from a single

pad on the east end of the Edgar Thomson site, targeting the Marcellus Shale formation. If the initial project is successful, the company might consider additional drilling targeting the deeper Utica Shale, Davis said.

Under its development plan, filed with the Pennsylvania Department of Environmental protection, the company plans to construct a well pad, two access roads and five freshwater storage tanks. Additionally, Merrion plans to build a 2,770-foot gas pipeline and a 2,990-foot freshwater pipeline.

DEP is currently reviewing Merrion’s application for an erosion and sediment control permit, a stream crossing permit and a permit to drill and operate its wells. In addition, the producer is working with the Allegheny County Department of Health in order to ensure the project meets the county’s air-quality requirements.

Upon completion of the permitting process “we would like to drill the first well first or second quarter of 2020,” Davis said.

— Jim Magill

PlattS ProPoSeS moDiFicationS to PlattS oil PriceS TaBle iN Gas DailyPlatts proposes to change the competitive fuel prices found on page 14 of Gas Daily in the ‘Platts Oil Prices’ table from August 1, 2019.

The $/barrel values will be discontinued and the $/MMBtu prices will be given symbols to database those values. Those symbols will be found in the LNC market data category from the date of the change.

Please send any comments by May 31 to the above proposal to: [email protected] with copy to [email protected].



11



nymex Henry Hub GaS FutureS contract, aPr 2 settlement High low +/- Volume

May 2019 2.684 2.722 2.673 -0.024 51747Jun 2019 2.722 2.759 2.716 -0.027 10494Jul 2019 2.775 2.812 2.771 -0.027 7822Aug 2019 2.801 2.833 2.794 -0.022 2234Sep 2019 2.798 2.824 2.786 -0.016 2702Oct 2019 2.818 2.840 2.804 -0.012 2717Nov 2019 2.873 2.888 2.854 -0.005 1113Dec 2019 3.015 3.021 2.987 0.006 2574Jan 2020 3.103 3.108 3.071 0.009 2130Feb 2020 3.045 3.045 3.020 0.011 307Mar 2020 2.924 2.924 2.907 0.007 463Apr 2020 2.625 2.626 2.608 0.010 1406May 2020 2.585 2.591 2.573 0.010 564Jun 2020 2.610 2.614 2.598 0.011 86Jul 2020 2.638 2.640 2.624 0.012 59Aug 2020 2.640 2.641 2.626 0.010 10Sep 2020 2.623 2.623 2.610 0.011 10Oct 2020 2.646 2.646 2.631 0.013 486Nov 2020 2.692 2.692 2.678 0.013 31Dec 2020 2.843 2.843 2.825 0.011 8Jan 2021 2.956 2.956 2.949 0.011 2Feb 2021 2.906 2.907 2.903 0.011 51Mar 2021 2.781 2.781 2.770 0.014 2Apr 2021 2.523 2.526 2.520 0.011 2May 2021 2.490 2.490 2.490 0.010 0Jun 2021 2.524 2.524 2.524 0.010 0Jul 2021 2.562 2.562 2.562 0.010 0Aug 2021 2.572 2.572 2.570 0.010 1Sep 2021 2.567 2.567 2.567 0.010 1Oct 2021 2.593 2.593 2.593 0.010 0Nov 2021 2.653 2.653 2.653 0.010 0Dec 2021 2.838 2.838 2.834 0.010 1Jan 2022 2.958 2.958 2.958 0.010 0Feb 2022 2.908 2.908 2.908 0.010 0Mar 2022 2.780 2.593 2.593 0.010 1Apr 2022 2.527 2.527 2.527 0.007 0Contract data for MondayVolume of contracts traded: 256,943Front-months open interest:May, 272,382; Jun, 110,786; Jul, 100.258Total open interest: 1,169,191Data is provided by a third-party vendor and is accurate as of 5:30 pm Eastern time.

NYMEX PROMPT MONTH FUTURES CONTINUATION

Note: The entire wick of the candlestick depicts the high and low daily front-month Henry Hub futures price range. The body of the candlestick depicts the price range between the open and close, with a red candlestick indicating a close on the downside and a green candlestick indicating a close on the high end.Source: S&P Global Platts

($/MMBtu)

2.5

3.0

3.5

4.0

4.5

5.0

02-Apr15-Mar27-Feb08-Feb23-Jan04-Jan17-Dec29-Nov

MONTH�AHEAD TEMPERATURE FORECAST MAP

Source: S&P Global Platts, Custom Weather

US GAS STORAGE SURPLUS vs ROLLING 5�YEAR AVERAGE

-800

-600

-400

-200

0

200

400

1

2

3

4

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Apr-19Jan-19Oct-18Jul-18Apr-18

(Bcf) ($/MMBtu)

HH prompt (right)HH cash (right)

3-week forecastStorage surplus

NaTUral Gas FUTUres

NYMeX May settles 2.4 cents lower at $2.684/MMBtu on weakening demand

The NYMEX May natural gas futures contract settled a couple of cents lower Tuesday as temperatures are set to increase across the US, lowering demand expectations.

May settled 2.4 cents lower at $2.684/MMBtu.The May contract wandered in a tight range of $2.673/MMBtu to

$2.722/MMBtu.“Everyone is looking at the weather,” said Elaine Levin, president of

brokerage PowerHouse. “A cold spell is the only thing that might bring prices up.”

The average US temperature is expected to rise incrementally on each of the next five days, reaching 65 degrees Fahrenheit on April 7, according to S&P Platts Analytics data. The average US-wide temperature on Tuesday is forecast to be 50 F, according to the data.

That forecast is helping to moderate demand.Platts Analytics predicts total US demand will drop 5.2 Bcf day on

day on Tuesday to 79.1 Bcf. A decrease in residential and commercial demand will be responsible for an estimated 3.7 Bcf of the drop, with most of that coming in the Northeast and Midcontinent.

Total supply, meanwhile, is set to fall 2.4 Bcf day on day to 90.6 Bcf on Tuesday, according to Platts Analytics. A decrease in imports from Canada will account for 0.6 Bcf of the decline while dry gas production is set to fall 1.9 Bcf. Platts Analytics expects production to increase over the next two weeks.

Compared with the first two days in April 2018, output so far in April is averaging 8.6 Bcf/d higher, Platts Analytics data show.

LNG feedgas demand for exports is forecast to remain steady at 4.1 Bcf on Tuesday, according to Platts Analytics, but is expected to fall to a 3.3 Bcf/d average over the next two weeks due to planned maintenance on trains 1 and 2 at the Sabine Pass LNG terminal in Louisiana.

In addition, the US National Weather Service’s six- to -10 day outlook calls for higher-than-average temperatures across most of the US.

— Kelsey Hallahan


12



nortHeaSt SPot anD ForwarD baSiS ($/MMBtu) spot basis Prompt forward basis

MTd MTd 02-apr 01-apr Chg avg. last year Chg 02-apr 01-apr Chg

Henry Hub 2.74 2.72 0.02 2.73 2.76 -0.03 2.68 2.71 -0.02

Northeast region

Algonquin CG -0.05 0.15 -0.20 0.05 0.22 -0.17 -0.17 -0.15 -0.03

Iroquois Zn2 -0.09 — -0.09 -0.04 0.05 -0.09 -0.03 -0.03 0.00

Tenn Zn6 Dlvd 0.06 0.30 -0.24 0.18 0.48 -0.30 -0.14 -0.11 -0.03

Transco Zn 6 NY -0.15 0.06 -0.21 -0.05 0.02 -0.06 -0.22 -0.21 -0.01

Transco Zn5 Dlvd -0.08 0.08 -0.16 0.00 0.02 -0.02 0.14 0.17 -0.03

Transco Zn6 Non-NY -0.17 0.01 -0.17 -0.08 0.01 -0.09 -0.32 -0.29 -0.03

TX Eastern M-3 -0.20 -0.08 -0.12 -0.14 -0.06 -0.08 -0.31 -0.29 -0.02

appalachia

Col Gas Appal -0.21 -0.14 -0.07 -0.18 -0.21 +0.04 -0.26 -0.26 0.00

Dominion N Pt -0.28 -0.22 -0.06 -0.25 -0.28 +0.03 -0.46 -0.43 -0.03

Dominion S Pt -0.29 -0.22 -0.07 -0.25 -0.28 +0.03 -0.37 -0.34 -0.03

Lebanon Hub -0.20 -0.15 -0.06 -0.17 — — -0.27 -0.26 -0.01

Millennium East Receipts -0.26 -0.19 -0.07 -0.22 -0.31 +0.09 -0.37 -0.34 -0.03

Tenn Zn4-200 Leg -0.21 -0.14 -0.07 -0.17 -0.19 +0.01 -0.38 -0.37 -0.01

Tennessee zone 4-300 leg -0.36 -0.21 -0.15 -0.28 -0.35 +0.07 -0.52 -0.48 -0.03

Texas Eastern M-2 receipts -0.31 -0.21 -0.10 -0.26 -0.26 -0.01 -0.40 -0.38 -0.02

Transco Leidy Line receipts -0.24 -0.17 -0.08 -0.20 -0.33 +0.13 -0.43 -0.42 -0.01

other locations

Dracut MA — — — — — — 0.17 0.19 -0.02

Iroquois Receipts -0.11 -0.03 -0.09 -0.07 0.03 -0.09 -0.12 -0.13 0.01

Niagara -0.14 -0.09 -0.05 -0.11 -0.11 -0.01 -0.19 -0.18 -0.01

Source: Platts M2M data

NORTHEAST DEMAND FORECAST


15

20

25

30

16-Apr12-Apr08-Apr04-Apr31-Mar27-Mar23-Mar

Actual(Bcf/d) Forecast Yesterday forecast Normal

NORTHEAST FORWARD BASIS


-2

0

2

4

6

8

May-22Nov-21May-21Nov-20May-20Nov-19May-19

Algonquin CG($/MMBtu) Iroquois Zn2 Transco Zn6 NY

APPALACHIA FORWARD BASIS($/MMBtu)


-0.75

-0.50

-0.25

0.00


Col Gas App Dominion S Tennessee Z4-300 Transco Leidy

nortHeaSt GaS marketS

Northeast natural gas prices fall Tuesday on sinking demand

Northeast natural gas prices trended down Tuesday as shoulder season temperatures put a damper on regional demand.

Cash price for Iroquois receipts lost 6.50 cents day on day to $2.625/MMBtu, down a total of almost 20 cents so far this week.

Transco Zone 5 North Point and South Point both trended down about 14 cents each, with both trading at $2.655/MMBtu

Transco Zone 6 shed 18.5 cents to trade at $2.585/MMBtu. This price dip comes as New York City demand is set to decrease through the week. According to S&P Global Platts Analytics, New York City demand is projected to sit at 3.5 Bcf Tuesday before declining through the end of the week.

According to Platts Analytics, production is expected to dip over 600 MMcf to 30.8 Bcf Tuesday. The decrease in supply was not reflected in pricing, with demand down across the board.

In the Northeast, residential and commercial demand drove demand fluctuations. It is expected to fall 1.3 Bcf on the day, with total demand projected at 22.3 Bcf Tuesday, according to Platts Analytics data.

National Weather Service forecasts show Boston’s high at 48 degrees Fahrenheit Tuesday with low chances of precipitation. Similarly, in New York City, temperatures are forecast at a high of 51 degrees, also with cloud cover and low chance of precipitation.

The NWS’ six- to 10-day forecast projects warmer-than-average weather across the East Coast and nationwide.

In the middle of shoulder season, nuclear outages in the region appeared to be sitting far above levels this time last year. Platts Analytics data shows Northeast nuclear outages sitting 36% higher on average so far in 2019 than at this time in 2018. Natural gas replacement for nuclear outages is projected to be at 1.24 Bcf Tuesday.

Net outflows from the Northeast to East Canada are projected to rebound over 200 MMcf to normal levels, sitting at 463 MMcf, according to Platts Analytics.

— Isabel Milton


13



SoutHeaSt SPot anD ForwarD baSiS ($/MMBtu) spot basis Prompt forward basis


Henry Hub 2.74 2.72 0.02 2.73 2.76 -0.03 2.68 2.71 -0.02

southeastANR LA -0.15 -0.10 -0.05 -0.13 -0.19 +0.06 -0.10 -0.10 0.00Col Gulf LA -0.18 -0.07 -0.11 -0.13 -0.16 +0.03 -0.07 -0.07 0.00Col Gulf-Mainline -0.19 -0.13 -0.07 -0.16 -0.17 +0.01 -0.17 -0.17 0.00FL Gas Zn1 -0.12 -0.06 -0.06 -0.09 -0.11 +0.02 -0.05 -0.05 0.00FL Gas Zn2 -0.11 -0.05 -0.06 -0.08 -0.12 +0.04 -0.04 -0.03 0.00FL Gas Zn3 -0.09 -0.01 -0.08 -0.05 -0.04 -0.01 0.01 0.01 -0.01Florida CG — — — — — — 0.30 0.30 -0.01SoNat LA -0.10 -0.03 -0.07 -0.06 -0.10 +0.03 -0.05 -0.05 -0.01Tenn LA 500 Leg -0.10 -0.04 -0.07 -0.07 -0.10 +0.03 -0.06 -0.06 0.00Tenn LA 800 Leg -0.15 -0.09 -0.06 -0.12 -0.14 +0.02 -0.10 -0.11 0.00TETCO-M1 -0.23 -0.11 -0.13 -0.17 -0.11 -0.06 -0.04 -0.03 0.00Texas Gas Zn SL -0.22 -0.13 -0.09 -0.17 -0.18 +0.00 -0.17 -0.16 -0.01Texas Gas Zn1 -0.18 -0.12 -0.07 -0.15 -0.17 +0.02 -0.17 -0.16 -0.01Transco Zn2 -0.16 -0.07 -0.09 -0.11 -0.09 -0.03 -0.07 -0.07 0.00Transco Zn3 -0.11 -0.04 -0.08 -0.07 -0.09 +0.02 -0.05 -0.05 0.00Transco Zn4 -0.10 -0.01 -0.09 -0.05 -0.07 +0.02 -0.06 -0.06 0.00Trunkline E LA -0.12 -0.10 -0.02 -0.11 -0.14 +0.03 -0.06 -0.06 0.00Trunkline WLA — — — -0.09 — — -0.07 -0.06 -0.01Tx Eastern E LA -0.18 -0.10 -0.08 -0.14 -0.11 -0.03 -0.13 -0.10 -0.02TX Eastern W LA -0.15 -0.06 -0.09 -0.10 -0.10 -0.01 -0.10 -0.08 -0.02

east & south TexasAgua Dulce 0.02 0.10 -0.08 0.06 0.08 -0.02 0.02 0.03 -0.01Carthage Hub -0.19 -0.14 -0.05 -0.17 -0.19 +0.03 -0.11 -0.11 0.00Houston Ship Channel -0.06 0.03 -0.08 -0.02 0.10 -0.11 0.01 0.02 -0.01Katy -0.05 0.02 -0.07 -0.02 0.07 -0.09 0.01 0.02 -0.01NGPL S TX -0.10 -0.02 -0.08 -0.06 -0.04 -0.02 0.01 0.02 -0.01NGPL Texok Zn -0.22 -0.18 -0.04 -0.20 -0.21 +0.01 -0.22 -0.20 -0.01Tenn Zn0 -0.14 -0.09 -0.05 -0.12 -0.17 +0.06 -0.09 -0.08 -0.01Transco Zn1 -0.10 -0.03 -0.08 -0.06 -0.13 +0.06 -0.06 -0.04 -0.01TX Eastern E Tx -0.15 -0.13 -0.02 -0.14 -0.13 -0.01 -0.11 -0.10 0.00TX Eastern S TX -0.12 -0.07 -0.05 -0.10 -0.05 -0.05 -0.07 -0.06 -0.01


SOUTHEAST & TEXAS DEMAND FORECAST


25

26

27

28

29

30



SOUTHEAST FORWARD BASIS


-0.3

-0.2

-0.1

0.0

0.1


Col Gulf-Mainline FL Gas Zn3 Transco Zn4 TX Eastern W LA($/MMBtu)

EAST AND SOUTH TEXAS FORWARD BASIS


-0.3

-0.2

-0.1

0.0

0.1


Agua Dulce Houston Ship Chnl NGPL Texok Zn TX Eastn S TX($/MMBtu)

SoutHeaSt GaS marketS

southeast gas prices slide as consumption fallsSoutheast natural gas demand was in full decline Tuesday, and for the most part, prices did the same.

Houston Ship Channel dropped 6 cents to trade at $2.68/MMBtu and Carthage dropped 3 cents to $2.545/MMBtu.

To the east, Florida Gas Transmission Zone 3 fell 5.5 cents to $2.65/MMBtu. Henry Hub moved in the other direction, increasing 2 cents to $2.735/MMBtu.

Total consumption in the region is set to fall 5%, or 1.69 Bcf, day on day to 31.19 Bcf on Tuesday, according to S&P Global Platts Analytics.

Two sectors were largely behind the fall in demand. Gas-for-power use is set to slide 796 MMcf, or 6%, to 11.462 Bcf. Residential and commercial use will see a similar-sized fall, shedding 701 MMcf to total 4.448 Bcf. Although on a percentage-basis, the residential-commercial sector’s decline was much greater than that of the generation segment at 14%.

According to the US National Weather Service, Houston temperatures are expected to reach 70 degrees Fahrenheit Tuesday, but are set to climb slowly over the next few days, topping 80 F by the weekend.

The Henry Hub balance-of-the-month contract trailed the spot price by several cents Tuesday, an indication that market participants see more bearish days ahead.

Henry Hub balmo ticked 0.90 cent lower to $2.691/MMBtu, some 4.5 cents behind the cash price.

The forecast for the month of April puts temperatures across much of Texas around the seasonal average, but closer to the Atlantic Coast, the likelihood is that levels will be warmer than average.

Average highs in Houston for April range from 77 F early in the month to 83 F toward the end. That range would be expected to keep air conditioner use to a minimum for most of the month.

The temperate temperatures are expected to stick around through July for much of Texas, with only the Gulf Coast experiencing warmer-than-normal weather.

That forecast was a likely factor in prices for monthly contracts retreating.

The front month at Houston Ship Channel slipped 0.85 cent to Henry Hub basis plus 0.85 cent/MMBtu, June fell 2.20 cents and moved at Henry Hub plus 1 cent/MMBtu and July changed hands at Henry Hub plus 3.75 cents/MMBtu after shedding 1.45 cents.

— John DeLapp


14



central SPot anD ForwarD baSiS ($/MMBtu) spot basis Prompt forward basis


Henry Hub 2.74 2.72 0.02 2.73 2.76 -0.03 2.68 2.71 -0.02

Midwest/east Canada

ANR ML 7 -0.14 -0.08 -0.06 -0.11 -0.06 -0.05 -0.16 -0.16 0.00

Chicago CG -0.15 -0.10 -0.05 -0.12 -0.09 -0.03 -0.19 -0.19 0.00

Consumers Energy CG -0.15 -0.10 -0.05 -0.12 -0.03 -0.09 -0.14 -0.13 -0.01

Dawn Ontario -0.16 -0.11 -0.06 -0.13 -0.10 -0.04 -0.14 -0.13 -0.01

Mich Con CG -0.17 -0.11 -0.06 -0.14 -0.12 -0.02 -0.16 -0.15 -0.01

Northern Ventura -0.20 -0.11 -0.09 -0.15 -0.14 -0.01 -0.31 -0.30 -0.01

Viking-Emerson -0.44 -0.30 -0.14 -0.37 -0.30 -0.07 -0.32 -0.32 0.00

Midcontinent

ANR OK -0.34 -0.24 -0.10 -0.29 -0.57 +0.28 -0.58 -0.57 -0.01

Enable Gas East -0.27 -0.19 -0.08 -0.23 -0.21 -0.02 -0.28 -0.29 0.01

NGPL Midcontinent -0.26 -0.23 -0.04 -0.24 -0.56 +0.32 -0.58 -0.56 -0.02

Northern NG Demarc -0.19 -0.11 -0.08 -0.15 -0.24 +0.09 -0.41 -0.41 0.00

Oneok OK -1.08 -1.28 0.20 -1.18 -1.33 +0.15 -0.91 -0.91 0.00

Panhandle TX-OK -0.54 -0.43 -0.11 -0.48 -0.63 +0.15 -0.64 -0.63 -0.01

Southern Star TxOkKs -0.61 -0.52 -0.09 -0.56 -0.58 +0.02 -0.60 -0.59 0.00



MIDWEST & MIDCONTINENT DEMAND FORECAST

10

15

20

25



MIDWEST FORWARD BASIS


($/MMBtu)

-0.5

0.0

0.5

1.0


Chicago CG Dawn Ontario Mich Con CG Northern Ventura

MIDCONTINENT FORWARD BASIS


-1.0

-0.5

0.0

0.5


NGPL Midcon Northern NG Demarc Panhandle TX-OK ANR OK($/MMBtu)

CeNTral Gas MarKeTs

Upper Midwest gas down on increased production

Upper Midwest natural gas prices were down on the day Tuesday as increased production added a bearish sentiment.

Cash price for Natural Gas Pipeline Nipsco decreased 4.5 cents on the day to $2.585/MMBtu as the location felt some downward pressure from increased supply.

Upper Midwest production is up to 1.94 Bcf/d over the last 30 days and has consistently hit the 2 Bcf/d mark over the past 10 days, according to S&P Global Platts Analytics. This marks a more than 300 MMcf/d when comparing it to this time last year.

Looking further north, associated gas production in the Bakken region has grown considerably. The increased Bakken production has been pushed further by increased processing capacity. The Wild Basin processing plant, which expanded from a capacity of 80 MMcf/d to up to 265 MMcf/d, has been ramping up all winter and hit the 200 MMcf/d mark this week.

Cash price for Northern Border Ventura, which is downstream of Bakken production, decreased 5.5 cents on the day to $2.545/MMBtu. The increased production in the Bakken added a bearish sentiment to the market.

The location is subject to further downward pressure as Northern Border April bidweek settled at $2.45/MMBtu, 9 cents lower than spot activity on Tuesday.

In the Midcontinent, Cash price for Panhandle TxOk decreased 9 cents on the day to $2.20/MMBtu. This is the first time this location has decreased in the last four trading sessions.

Midcontinent demand decreased approximately 800 MMcf on the day to 3.28 Bcf on Tuesday, according to S&P Global Platts Analytics. Demand is expected to decrease further to 2.85 Bcf by Saturday.

Population-weighted average temperatures sat 5 degrees below normal on Tuesday but are expected to increase to 9 degrees above normal by Saturday, according to Platts Analytics. The increased temperatures going into shoulder season will continue to relieve Midcontinent demand.

Adding even more downward pressure, outflows from the Midcontinent decreased 6% on the day to 7.57 Bcf, according to Platts Analytics.

— Arsalan Syed


15



weSt SPot anD ForwarD baSiS ($/MMBtu) spot basis Prompt forward basis


Henry Hub 2.74 2.72 0.02 2.73 2.76 -0.03 2.68 2.71 -0.02

Northwest

GTN Kingsgate -0.42 -0.50 0.08 -0.46 -1.01 +0.55 -0.87 -0.91 0.05

Northwest Sumas -0.20 -0.31 0.11 -0.26 -0.95 +0.70 -0.55 -0.63 0.08

Northwest Stanfield -0.30 -0.39 0.10 -0.34 -0.96 +0.62 -0.69 -0.72 0.03

rockies

Cheyenne Hub -0.35 -0.35 0.00 -0.35 -0.88 +0.53 -0.69 -0.72 0.03

CIG Rockies -0.40 -0.42 0.02 -0.41 -0.94 +0.53 -0.69 -0.72 0.03

Kern River Opal -0.28 -0.36 0.08 -0.32 -0.84 +0.52 -0.60 -0.65 0.05

NW WY Pool -0.30 -0.36 0.06 -0.33 -0.86 +0.53 -0.60 -0.65 0.05

Questar Rky -0.31 -0.39 0.09 -0.35 -0.90 +0.55 -0.61 -0.67 0.05

southwest

El Paso Permian -6.06 -2.80 -3.26 -4.43 -1.23 -3.21 -2.96 -2.53 -0.43

El Paso San Juan -0.91 -1.44 0.54 -1.17 -1.07 -0.10 -1.24 -1.24 0.00

Kern River Dlvd 0.08 0.06 0.02 0.07 -0.78 +0.85 -0.60 -0.68 0.08

PG&E CG 0.97 0.97 0.01 0.97 -0.18 +1.14 0.84 0.81 0.03

PG&E Malin -0.27 -0.32 0.06 -0.29 -0.79 +0.50 -0.53 -0.57 0.04

PG&E South -0.81 -1.23 0.42 -1.02 -0.92 -0.10 -1.13 -1.13 0.00

SoCal Gas -0.13 -0.38 0.25 -0.25 -0.81 +0.56 -0.57 -0.65 0.07

SoCal Gas Citygate 0.82 0.79 0.03 0.80 0.30 +0.51 1.07 0.99 0.08

Transwestern Permian -4.17 -2.79 -1.38 -3.48 -1.00 -2.48 -2.68 -2.30 -0.39

Waha -6.49 -2.86 -3.64 -4.67 -0.99 -3.69 -3.31 -2.75 -0.56

west Canada

AECO-C -1.46 -1.34 -0.13 -1.40 -0.74 -0.66 -1.72 -1.72 0.00


SOUTHWEST, NORTHWEST, ROCKIES DEMAND FORECAST


11

12

13

14



WEST SUPPLY LOCATIONS FORWARD BASIS


-3

-2

-1

0


AECO-C($/MMBtu) CIG Rockies El Paso Permian El Paso San Juan

WEST DEMAND LOCATIONS FORWARD BASIS


-1

0

1

2


($/MMBtu) Northwest Sumas PG&E CG SoCal Gas Kern Delivered

wesT Gas MarKeTs

west cash prices up on capacity cuts, demand weakens; waha, el Paso Permian hit new low

West cash prices continued to show modest gains Tuesday, likely on reduced supply from Canada.

Westcoast Energy will reduce capacity at Station 4B South to 1.07 Bcf/d on Wednesday, according to the company’s website. This is the most severe capacity reduction through the location since early December 2018.

The restriction is likely putting an upward pressure on prices in the Pacific Northwest resulting in modest gains as demand stays within shoulder season norms.

Total West demand is set to stand at 9.7 Bcf Wednesday, largely in line with the demand seen over the past week, according to data from S&P Global Platts Analytics.

Sumas gained 13 cents on the day and settled at $2.54/MMBtu amid reduced flows through the location set to total about 664 MMcf Tuesday, after averaging 924 MMcf over the past seven days, according to data from S&P Global Platts Analytics.

Gas Transmission Northwest-Kingsgate rose 10 cents to $2.32/MMBtu while Colorado Interstate Gas Mainline tacked on 4 cents to $2.34/MMBtu.

The April monthly index for CIG Rockies settled at $2.25/MMBtu, about 9 cents weaker than the spot prices, likely because the National Weather Service forecast shows higher-than-average temperatures in the region for the month.

Kern River Delivered an important benchmark for gas flowing Southwest also ticked up 4 cents to $2.82/MMBtu, while Opal gained 10 cents to $2.46/MMBtu, likely because PG&E and SoCal inventories pace at multiple-year lows.

Milder weather and falling on-system demand in the last two weeks of March encouraged injections at SoCal and PG&E to average 225 MMcf/d and 633 MMcf/d, respectively, over the same time period, Platts Analytics data showed.

Current inventories at SoCal stand at 38.5 Bcf, while PG&E is at 64 Bcf.SoCal city-gate tacked on 5 cents to $3.55/MMBtu, while PG&E

city-gate rose 3 cents to 3.71/MMBtu.Prices continued to remain below zero in the Permian production

areas on elevated production in the basin and limited takeaway capacity. At the same time, several maintenances and capacity constraints on the El Paso Natural Gas system continue to exacerbate the situation.

— Veda Chowdhury


16



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total net PiPeline FlowS by reGion (MMcf/d*) 01-apr 02-apr Change MTd MTd Change avg. last year

supply regions – net pipeline outflows

Texas 9,955 10,221 -266 10,088 9,080 1,008West Canada 8,667 8,232 435 8,450 8,745 -295Rockies 6,861 6,804 57 6,833 6,742 91Midcontinent 3,857 3,627 230 3,742 3,493 249Northeast 8,952 9,491 -539 9,222 7,535 1,687

demand regions – net pipeline inflows

Southwest 4,564 4,513 -51 4,539 4,020 519Southeast 9,732 10,270 538 10,001 10,121 -120Northwest 2,040 2,019 -21 2,030 1,875 155Midwest 13,301 12,757 -544 13,029 12,156 873East Canada 3,810 3,908 98 3,859 3,301 558

* Net pipeline flows by region are the aggregated total interstate pipeline flows across the regional bor-der. Net supply regions are those that historically have had more supply than demand within the region and have been net suppliers of gas to other regions. Net demand regions historically have had more demand than supply and have been net receivers of pipeline gas from other regions.

sHale ValUe CHaiN assessMeNTs, aPr 2 $/MMBtu +/-

Gulf Coast ethane fractionation spread 0.478 -0.128

Gulf Coast E/P mix fractionation spread 0.027 -0.522

E/P mix Midcontinent to Rockies fractionation spread -0.761 -0.190

E/P mix Midcontinent fractionation spread -0.896 -0.135

National raw NGL basket price 6.202 -0.119

National composite fractionation spread 3.522 -0.059

The methodology for these assessments is available at:www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/shale-value-chain.pdf

PlattS oil PriceS, aPr 2 ($/b) ($/MMBtu)

Gulf Coast spot1% Resid (1) 67.16-67.18 10.75HSFO (1) 64.68-64.70 10.35

Crude spotWTI (May) (2) 62.57-62.59 10.79

New York spotNo.2 (1) 78.89-78.93 12.630.3% Resid LP (3) 77.12-77.14 12.340.3% Resid HP (3) 77.12-77.14 12.340.7% Resid (3) 69.62-69.64 11.141% Resid (3) 66.62-66.64 10.66

1= barge delivery; 2= pipeline delivery; 3= cargo delivery

($/MMBtu)

HENRY HUB/NYMEX SPREAD

Henry Hub cash price

NYMEX front month close

2.60

2.65

2.70

2.75

02-Apr01-Apr29-Mar28-Mar27-Mar

https://pmc.platts.com/NlPdf.aspx?nlname=Gas Daily Market Fundamentals&il=true&t=nl&m=display&ft=pdf

https://pmc.platts.com/NlPdf.aspx?nlname=Gas+Daily+Market+Fundamentals+Data&il=true&t=nl&m=download&ft=excel

https://pmc.platts.com/NlPdf.aspx?nlname=Gas Daily Price Guide&il=true&t=nl&m=display&ft=pdf

17



Final Daily GaS inDiceS – ice locationS ($/MMBtu)Trade date: 02-Apr

Flow date(s): 03-Apr Daily Absolute Absolute Common Common

Location Symbol Index Change Low High Low High Volume Deals

Northeast

ICE Algonquin CG (Excl. J and G Lateral deliveries) JAAAA21 2.675 -0.185 2.660 2.700 2.665 2.685 129 34

ICE Algonquin Citygates (Excl. J Lateral deliveries) JAAAB21 2.845 -0.300 2.800 3.000 2.800 2.895 2 4

ICE Algonquin, Millennium-Ramapo receipts JAAHF00 — — — — — — — —

ICE Algonquin, TGP-Mahwah receipts JAAHG00 — — — — — — — —

ICE Dominion Energy, Cove Point, on system delivery JAAHM21 — — — — — — — —

ICE Iroquois, zone 2 (non-Hunts Point/Eastchester Lateral) JAABT21 2.650 -0.070 2.650 2.650 2.650 2.650 45 12

ICE Iroquois, zone 2 Hunts Point/Eastchester Lateral JAABU21 — — — — — — — —

ICE Maritimes, Hubline and Beverly Salem JAACB21 — — — — — — — —

ICE Maritimes and Northeast Pipeline US (buyer’s choice delivered) JAACC21 — — — — — — — —

ICE PNGTS (buyer’s choice delivered) JAADH21 3.200 -0.600 3.200 3.200 3.200 3.200 4 2

ICE Stagecoach Marcellus Hub JAAEN21 — — — — — — — —

ICE Texas Eastern, Manhattan Lateral (delivered) JAAEW21 — — — — — — — —

ICE Transco, zone 6 (non-NY north mainline) JAAEZ21 — — — — — — — —

ICE Transco, zone 6 station 210 Pool JAAFA21 2.570 -0.150 2.500 2.600 2.545 2.595 223 48

appalachia

ICE Clarington Tennessee JAAFI21 — — — — — — — —

ICE Columbia Gas, A04 Pool JAAAU21 — — — — — — — —

ICE Columbia Gas, A06 Pool JAAAV21 — — — — — — — —

ICE Columbia Gas, Segmentation Pool JAAAW21 — — — — — — — —

ICE Millennium Pipeline (buyers’ choice delivered) JAAHA21 — — — — — — — —

ICE Tennessee, zone 4, station 219 Pool JAAET21 2.535 -0.035 2.500 2.560 2.520 2.550 269 40

ICE Texas Eastern, M2 Zone (delivered) JAAEV21 — — — — — — — —

Midcontinent

ICE Bennington, Oklahoma (buyers’ choice) JAAHK21 2.520 -0.255 2.520 2.520 2.520 2.520 5 2

ICE Enable Gas, Flex Pool only JAABE21 2.465 -0.060 2.400 2.540 2.430 2.500 64 16

ICE Enable Gas, North Pool only JAABF21 — — — — — — — —

ICE Enable Gas, West (W1 or W2 as mutually agreed) JAABI21 — — — — — — — —

ICE Enable Gas, West Pool JAABJ21 — — — — — — — —

ICE NGPL, Gulf Coast Mainline Pool JAACI21 — — — — — — — —

ICE NGPL, Mid-Continent Storage PIN JAACO21 — — — — — — — —

ICE Northern Natural, Mid 13 - 16A Pool JAACW21 — — — — — — — —

ICE Northern Natural, Mid 1-7 Pool JAACX21 — — — — — — — —

ICE Northern Natural, Mid 8 -12 Pool JAACY21 — — — — — — — —

ICE Salt Plains Storage (buyers’ choice) JAADV21 — — — — — — — —

ICE Salt Plains Storage (in-ground transfer only) JAADW21 — — — — — — — —

Upper Midwest

ICE Alliance, Chicago Exchange Hub JAAAC21 2.580 -0.035 2.575 2.600 2.575 2.585 593 82

ICE Alliance, ANR Interconnect JAAAD21 2.590 -0.030 2.590 2.590 2.590 2.590 29 2

ICE Alliance, Midwestern Interconnect JAAFX21 — — — — — — — —

ICE Alliance, NGPL Interconnect JAAAF21 — — — — — — — —

ICE Alliance, Nicor Interconnect JAAAG21 — — — — — — — —

ICE Alliance, Vector Interconnect JAAAH21 — — — — — — — —

ICE ANR, Joliet Hub CDP JAAAK21 — — — — — — — —

ICE Bluewater Gas Storage JAAAN21 — — — — — — — —

ICE Great Lakes Gas, St. Clair JAABM21 — — — — — — — —

ICE Guardian, Guardian Hub JAABN21 — — — — — — — —

ICE NGPL, Amarillo Pooling PIN JAACG21 2.500 -0.050 2.480 2.510 2.495 2.510 183 34

ICE NGPL, Amarillo Storage PIN JAACH21 — — — — — — — —

ICE NGPL, Iowa-Illinois GC Pool JAAHN21 — — — — — — — —

ICE NGPL, Iowa-Illinois AM Pool JAAHO21 — — — — — — — —

ICE NGPL, Iowa-Illinois GC Storage JAAHP21 — — — — — — — —

ICE NGPL, Iowa-Illinois AM Storage JAAHQ21 — — — — — — — —

ICE NGPL, Mid-American Citygate JAACN21 — — — — — — — —

ICE Northern Border, Harper Transfer Point JAACS21 2.570 -0.040 2.570 2.570 2.570 2.570 40 4

ICE Northern Border, Nicor Interconnect JAACT21 — — — — — — — —

ICE Northern Border, Vector Interconnect JAACU21 2.570 -0.040 2.565 2.575 2.570 2.575 88 14

ICE Northern Border, Will County JAACV21 2.575 -0.035 2.575 2.575 2.575 2.575 20 2

ICE REX (East), delivered into ANR JAADK21 2.535 -0.020 2.525 2.565 2.525 2.545 204 40

ICE REX (East), delivered into Lebanon Hub JAAHC21 — — — — — — — —

18



Final Daily Gas inDices – ice locations ($/MMBtu)Trade date: 02-Apr



Upper Midwest

ICE REX (East), delivered into Midwestern Gas JAADL21 2.550 -0.020 2.535 2.555 2.545 2.555 475 76

ICE REX (East), delivered into NGPL JAADM21 2.540 -0.025 2.535 2.555 2.535 2.545 326 58

ICE REX (East), delivered into Panhandle JAADN21 2.545 -0.020 2.525 2.555 2.540 2.555 69 12

ICE REX (East), delivered into Trunkline JAADO21 2.530 -0.035 2.530 2.530 2.530 2.530 10 2

ICE REX (West), delivered into ANR JAADP21 — — — — — — — —

ICE REX (West), delivered into Northern Natural JAADQ21 — — — — — — — —

ICE REX (West), delivered into Panhandle JAADR21 — — — — — — — —

ICE REX, zone 3 receipts JAAHS21 — — — — — — — —

ICE Rover, delivered into ANR JAAHI21 — — — — — — — —

ICE Rover, delivered into Panhandle JAAHJ21 2.540 -0.035 2.535 2.540 2.540 2.540 12 6

ICE Rover, receipts JAAHR21 — — — — — — — —

east Texas

ICE Agua Dulce Hub JAAGI21 — — — — — — — —

ICE Atmos, zone 3, receipts JAAAL21 2.355 -0.075 2.350 2.365 2.350 2.360 45 14

ICE Banquete Hub JAAHX21 — — — — — — — —

ICE Carthage Hub Tailgate JAAAQ21 2.545 -0.035 2.525 2.550 2.540 2.550 135 24

ICE ENT, STX Map JAAHT21 — — — — — — — —

ICE ETC, Cleburne JAAHH00 — — — — — — — —

ICE ETC, Maypearl JAABK21 — — — — — — — —

ICE Golden Triangle Storage & Hub JAABL21 — — — — — — — —

ICE Gulf South, Pool Area #16 JAABP21 2.530 -0.010 2.480 2.570 2.510 2.555 260 42

ICE HPL, East Texas Pool JAABR21 — — — — — — — —

ICE Katy, ENSTOR Pool (excl. Kinder Morgan Texas) JAABW21 2.675 -0.035 2.660 2.680 2.670 2.680 171 18

ICE Katy, Lonestar (warranted as Intrastate) JAABX21 — — — — — — — —

ICE Katy, Lonestar Interstate JAABY21 2.680 -0.040 2.680 2.680 2.680 2.680 10 2

ICE Katy, Oasis Pipeline JAABZ21 2.685 -0.055 2.660 2.710 2.675 2.700 500 58

ICE Moss Bluff Interconnect (buyers’ choice delivered) JAACD21 2.695 -0.050 2.655 2.710 2.680 2.710 110 20

ICE Moss Bluff Storage (in-ground transfers only) JAACE21 — — — — — — — —

ICE NGPL, TXOK East Pool JAACP21 2.520 -0.015 2.485 2.570 2.500 2.540 1546 182

ICE NGPL, TXOK West Pool JAACQ21 — — — — — — — —

ICE NorTex, Tolar Hub JAACR21 2.335 -0.075 2.310 2.350 2.325 2.345 405 70

ICE Tennessee, zone 0 North JAAEP21 2.600 -0.015 2.580 2.600 2.595 2.600 21 6

ICE Tennessee, zone 0 South JAAEQ21 2.595 -0.030 2.570 2.600 2.590 2.600 465 64

ICE Tres Palacios Hub - Injection JAAFE21 2.635 -0.030 2.610 2.650 2.625 2.645 326 56

ICE Tres Palacios Hub - Withdrawal JAAFF21 2.695 -0.030 2.670 2.700 2.690 2.700 44 10

louisiana/southeast

ICE ANR, SE Transmission Pool JAAAI21 2.585 -0.030 2.525 2.605 2.565 2.605 152 28

ICE ANR, SE Gathering Pool JAAAJ21 — — — — — — — —

ICE Bobcat Interconnect (buyers’ choice delivered) JAAAO21 — — — — — — — —

ICE Bobcat Storage (in-ground transfer only) JAAAP21 — — — — — — — —

ICE Egan Interconnect (buyers’ choice delivered) JAAAZ21 — — — — — — — —

ICE Egan Storage (in-ground transfer only) JAABA21 — — — — — — — —

ICE Enable Gas, Perryville Hub JAABG21 — — — — — — — —

ICE Enable Gas, South Pool only JAABH21 — — — — — — — —

ICE Gulf South, Perryville Exchange Point JAABO21 — — — — — — — —

ICE Jefferson Island Storage and Hub JAABV21 — — — — — — — —

ICE MS Hub Storage JAACF21 — — — — — — — —

ICE NGPL, Louisiana Pooling PIN JAACL21 — — — — — — — —

ICE NGPL, Louisiana Storage PIN JAACM21 — — — — — — — —

ICE Pine Prairie Hub JAADF21 2.615 -0.050 2.590 2.645 2.600 2.630 313 48

ICE Sonat, Zone 0 JAAHE21 — — — — — — — —

ICE Sonat, Zone 0 South Louisiana Pool JAAEJ21 2.635 -0.045 2.615 2.670 2.620 2.650 433 74

ICE Sonat, Zone 1 North Pool JAAEK21 — — — — — — — —

ICE Southern Pines Hub JAAEM21 — — — — — — — —

ICE Stingray, pool delivery JAAEO21 — — — — — — — —

ICE Tennessee, zone 1 100 Leg Pool JAAER21 2.575 -0.055 2.570 2.610 2.570 2.585 82 12

ICE Tennessee, zone 1, Station 87 Pool JAAES21 2.575 -0.040 2.550 2.590 2.565 2.585 63 16

ICE Texas Gas, Mainline Pool JAAEX21 2.550 -0.050 2.515 2.590 2.530 2.570 550 72

ICE Texas Gas, North Louisiana Pool JAAEY21 — — — — — — — —

19



Final Daily Gas inDices – ice locations ($/MMBtu)Trade date: 02-Apr



rockies/Northwest

ICE CIG, Mainline (sellers’ choice, non-lateral) JAAFY21 2.340 +0.055 2.320 2.350 2.335 2.350 109 22

ICE CIG, Mainline Pool JAAFZ21 — — — — — — — —

ICE CIG, Mainline South (sellers’ choice) JAAAT21 2.210 -0.075 2.180 2.220 2.200 2.220 100 12

ICE Kern River, on system receipt JAACA21 2.450 +0.095 2.400 2.475 2.430 2.470 446 62

ICE Opal Plant Tailgate JAADB21 2.460 +0.085 2.410 2.480 2.445 2.480 329 56

ICE PG&E, Onyx Hill JAAHB21 — — — — — — — —

ICE Pioneer Plant Tailgate JAADG21 2.430 +0.070 2.430 2.430 2.430 2.430 20 4

ICE Questar, North Pool JAADI21 2.430 +0.105 2.430 2.430 2.430 2.430 10 2

ICE Questar, South Pool JAADJ21 — — — — — — — —

ICE Ruby, Onyx Hill JAADS21 2.475 +0.090 2.440 2.510 2.460 2.495 20 4

ICE Ruby, Receipt Pool JAADT21 — — — — — — — —

ICE Ryckman Creek Gas Storage JAADU21 — — — — — — — —

ICE WIC, Pool JAAFH21 — — — — — — — —

southwest

ICE Agua Blanca Pool JAAHU21 — — — — — — — —

ICE El Paso, Keystone Pool JAABB21 -3.685 -3.535 -5.750 -1.450 -4.760 -2.610 317 84

ICE El Paso, Plains Pool JAABC21 1.825 +0.640 1.750 1.950 1.775 1.875 69 22

ICE El Paso, Waha Pool JAABD21 -4.220 -3.955 -6.500 -2.500 -5.220 -3.220 226 40

ICE Oasis, Waha Pool JAACZ21 -4.000 -3.935 -4.250 -4.000 -4.065 -4.000 115 22

ICE ONEOK, Westex Pool JAADA21 -3.145 -3.040 -5.000 -1.500 -4.020 -2.270 135 26

ICE PG&E, Daggett JAADC21 — — — — — — — —

ICE PG&E, Kern River Station JAADD21 — — — — — — — —

ICE PG&E, Topock JAADE21 1.925 +0.435 1.850 2.250 1.850 2.025 116 28

ICE Socal, Blythe JAADX21 — — — — — — — —

ICE Socal, Ehrenberg (delivered) JAADY21 2.005 +0.530 1.900 2.250 1.920 2.095 87 18

ICE Socal, Firm Storage only (Citygate) JAADZ21 — — — — — — — —

ICE Socal, In-ground transfer only (Citygate) JAAEA21 — — — — — — — —

ICE Socal, Interruptible Storage only (Citygate) JAAEB21 — — — — — — — —

ICE Socal, Kern River Station JAAEC21 — — — — — — — —

ICE Socal, Kramer Junction JAAED21 2.815 +0.060 2.770 2.850 2.795 2.835 161 36

ICE Socal, Needles JAAEE21 — — — — — — — —

ICE Socal, sellers’ choice delivered incl. CA production JAAEF21 — — — — — — — —

ICE Socal, Topock JAAHD21 — — — — — — — —

ICE Socal, Topock, El Paso JAAEG21 — — — — — — — —

ICE Socal, Topock, Transwestern JAAEH21 — — — — — — — —

ICE Socal, Wheeler Ridge JAAEI21 2.865 +0.105 2.810 2.920 2.840 2.895 126 24

ICE Transwestern, Central Pool JAAFB21 0.015 -0.235 -0.150 0.250 -0.085 0.115 30 6

ICE Transwestern, Panhandle Pool JAAFC21 — — — — — — — —

ICE Transwestern, West Texas Pool JAAFD21 -5.250 -5.025 -5.250 -5.250 -5.250 -5.250 11 4

ICE Waha Hub, West Texas (buyer’s choice delivered) JAAFG21 -3.380 -3.365 -5.000 -1.500 -4.255 -2.505 44 14

ice GaS Daily aSSeSSment rationaleThe daily indices for ICE locations are a volume weighted average of ICE Exchange trades submitted to Platts by ICE. No other sources of data are used. Platts editors do not screen the data for outliers or assess prices if there are no transactions. Questions may be directed to Ryan Ouwerkerk at 713-655-2202 or

[email protected]

gas daily - s&p global daily sa… · aeement indexed to brent and ugr s gas prices analysis:...

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