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Natural Gas Marketers See 7% YOY Increase in 4Q2017, With Full Year Nearly Flat

Sales of natural gas by 25 leading marketers soared 7.24 Bcf/d (7%) from 4Q2016 to 4Q2017, despite a 6% decline by the segment's perennial No. 1 company, and it was nearly enough to completely resuscitate the volume total for the entire year, according to NGI's 4Q2017 and Full-Year 2017 Top North American Natural Gas Marketers rankings.

Participating gas marketers reported combined sales transactions of 117.44 Bcf/d in 4Q2017, compared with 110.20 in 4Q2016. Five of the survey's top 10 marketers and 15 companies overall reported higher numbers in the final three months of 2017 than in the year-ago period.

NGI's survey of North American marketers reported combined sales transactions of 112.31 Bcf/d in 1Q2017, a 2% decrease compared with 1Q2016. Gas marketers reported 105.23 Bcf/d in 2Q2017 and 106.82 Bcf/d in 3Q2017, each a 5% decline compared with year ago periods.

However, the 4Q2017 surge, pushed higher by the Houston area's rebound from Hurricane Harvey and exceptional quarters from several marketers, helped push the full-year 2017 total to 109.49 Bcf/d, only 1.73 Bcf.d less than in 2016.

BP plc reported 21.18 Bcf/d in 4Q2017, a 6% decline from 22.51 Bcf/d a year earlier, but it kept a firm grip on its No. 1 ranking in the survey. The supermajor expects the United States to lead the world in natural gas production and exports by 2040.

Leapfrogging from No. 4 in 3Q2017 to No. 2 in 4Q2017 was Macquarie Energy, thanks to a 48% increase to 13.15 Bcf/d, roused by its purchase last June of Cargill's North American Power and Gas trading business. Macquarie was No. 5 in NGI's analysis of 2016 Form 552 buyer and seller filings with FERC; Cargill was No. 47 in NGI's analysis of 2015 Form 552 filings, buying and selling 669.8 Tbtu.

In the No. 3 spot, Shell Energy NA reported 10.00 Bcf/d, a 7% decline compared with 10.70 Bcf/d in 4Q2016.

It was better news from No. 4 Tenaska, with 9.80 Bcf/d in 4Q2017, an 11% increase compared with the year-ago period.

Tenaska Marketing Ventures and Enterprise Products Operating LLC finished out the year by receiving a temporary waiver of the Federal Energy Regulatory Commission’s capacity release regulation and related Northern Border Pipeline Co. tariff provisions. The two companies had filed a petition with the Federal Energy Regulatory Commission requesting all necessary approvals and waivers to facilitate Enterprises' sale to Tenaska of several transportation agreements and a related natural gas purchase agreement as part of an integrated transaction to allow Enterprise's exit from the Midwest natural gas marketing business [RP18-183].

Rounding out the top 5 in the survey, ConocoPhillips reported 8.25 Bcf/d in 4Q2017, an 8% decline compared with 4Q2016.

One promising market for domestic U.S. production is exported liquefied natural gas (LNG). FERC granted permission this week for Dominion Energy to begin commercial service for its LNG export facility on Chesapeake Bay in Maryland [CP13-113].

The Cove Point Liquefaction Project, which includes a terminal at Lusby, MD, is the second U.S. facility to export LNG sourced from domestically produced natural gas in the Lower 48. Cheniere Energy Inc.'s Sabine Pass LNG terminal in Cameron Parish, LA, began exporting gas in February 2016. Cove Point's marketed capacity is fully subscribed under 20-year service agreements.

And more than six years after signing a 20-year sales and purchase agreement (SPA) for LNG supplies, Cheniere Energy Inc. and India's state-owned natural gas utility, Gail (India) Ltd., officially kicked off their SPA last Monday, with a ship set to depart the export terminal in Louisiana.

American LNG export facilities are ramping up, but is the global market ready for those exports?

“Yes, it seems to be, though there have been some surprises,” said Maryland-based energy consultant Ben Schlesinger. “There’s much more of a market than some people expected.

“South America’s been an incredible market for our gas. The rest is all scattered. Europe is tangled up with their Russian contracts. Some of the eastern European countries are so deep in take-or-pay contracts with Russia, and even some western European countries, that their ability to take U.S. LNG has been more limited, but it’s likely to increase.

“That’s not as much true in China, where they can take a good deal of it, and South America’s a promising market.”

Other highlights of NGI’s 4Q2017 survey included 2% increases year/year for Direct Energy (5.63 Bcf/d) and J.Aron & Co. (5.40 Bcf/d), a near doubling for CenterPoint Energy (3.66 Bcf/d), and double-digit percentage increases for Chevron Corp. (3.46 Bcf/d) and Southwestern Energy Co. (3.10 Bcf/d).

Castleton Commodities reported 2.65 Bcf/d, a 9% increase from the year ago period, and NJR Energy Services Co. reported 1.83 Bcf/d, a 30% increase.

CFE International, which wasn't trading natural gas a year ago, reported 2.52 Bcf/d in 4Q2017. Mexico's Comision Federal de Electricidad (CFE) has said much of its future lies in trading natural gas through marketing affiliates CFE International and CFEnergia.

In NGI's Full-Year 2017 Top North American Gas Marketers Ranking, BP reported an 8% decrease compared with 2016 (21.00 Bcf/d versus 22.81), but 10 other marketers reported increases from 2016.

Highlights of the full-year survey include a 9% increase for Macquarie (10.29 Bcf/d, compared with 9.48 Bcf/d in 2016), a 5% increase for Tenaska (9.50 Bcf/d, compared with 9.01 Bcf/d in 2016), and a 3% increase for Direct Energy (5.24 Bcf/d, compared with 5.08 Bcf/d in 2016).

Chevron reported a marginal increase over 2016 (3.33 Bcf/d). Increases for the full year were also reported by CenterPoint (3.29 Bcf/d), Southwestern (2.92 Bcf/d), Castleton (2.85 Bcf/d), Cabot Oil & Gas Corp. (1.80 Bcf/d), NJR Energy Services Co. (1.58 Bcf/d) and ARM Energy Management (1.14 Bcf/d).

Vitol Inc. and CFE were not included in the full-year survey because complete data was not available.

The NGI survey ranks marketers on sales transactions only. FERC's Form 552 tallies both purchases and sales.

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