Pipeline Maintenance Slows Gas Deliveries to LNG Export Plants
It’s that time of year again. Annual maintenance along pipelines that feed several major U.S. liquefaction (LNG) facilities will negatively impact gas deliveries to some terminals over the next six weeks according to notices to customers. Pipelines that serve the Cove Point, Maryland LNG facility and the Sabine Pass, Louisiana facility will be affected. Marcellus/Utica gas flows to both facilities.
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On Tuesday the U.S. Energy Information Administration reported that due to rising spot demand in both the winter and summer months from Asia and Europe, and lower natural gas prices here in the U.S. versus the price elsewhere, LNG exports in the U.S. hit record hights for the first half of this year. That’s good news for Marcellus/Utica drillers and landowners. LNG exports jumped to an average of 9.6 billion cubic feet per day (Bcf/d) between January and June 2021, up by 42% compared with the first half of 2020.
According to one of our favorite Forbes authors and research analyst, Jude Clemente, “demand for natural gas can only grow.” Right now the world collectively uses 375 billion cubic feet per day (Bcf/d) of natgas. Clemente says demand “is set to grow substantially in the years ahead.” One of the drivers of that growth will be carbon-neutral LNG. What is it and why will it drive more use of natgas? Clemente explains…
Strong demand for LNG from Europe and Asia is causing the price of natural gas to go high and (for now) stay high (see 
According to Bloomberg, the world’s importers of natural gas are waking up to a stark realization: “there isn’t enough supply to go around.” Our long, cold winter (so much for “global warming”) coupled with a warm and toasty summer has (a) depleted natural gas supplies, and (b) will keep those supplies low going into next winter. Despite all the blabbering from Europe and Asia about switching to so-called renewable energy sources, the stark fact is that natural gas supplies more heat and electricity to the world than any other single source. Period. Sooner or later the left must deal with reality and pull their collective heads out of their… fantasies.
Cheniere Energy Inc., the biggest LNG exporter in the U.S., is using its bigness to lean on natural gas drillers (in the upstream) and pipeline companies (in the midstream) to “clean up the natural gas supply chain.” How? To force drillers and pipelines to get their operations to so-called net zero carbon emissions sooner rather than later. Given the fact Cheniere buys up 7-8% of ALL natural gas supplies in the country on any given day, they can and are throwing their weight around to force others to do what they want. The LNG tail is wagging the natural gas dog.
One of our favorite Forbes contributors, Jude Clemente, has written an article detailing how LNG (liquefied natural gas) usage worldwide along with exports from the United States, have both come roaring back now that the pandemic is beginning to appear in the review mirror. There is a fantastic chart in the article (below) identifying the 12 biggest U.S. LNG importers by country. The number one importer may or may not surprise you: South Korea. We bet the number two importer will surprise you (it did us)…
LNG (liquefied natural gas) exports are an important and growing market for Marcellus/Utica natural gas. Two LNG export facilities currently export 100% M-U molecules: Cove Point, Maryland, and Elba Island, Georgia. However, our molecules make their way via a network of pipelines to several Gulf Coast LNG export facilities too, including the largest LNG export facility in the U.S., Cheniere Energy’s Sabine Pass. But is there a cloud on the horizon that threatens even more M-U gas from being liquefied and exported? Perhaps, and it comes from Alaska.