Leading natural gas marketers reported a third consecutive quarterly decline in 4Q2019, though the rate of decline slowed significantly, and total sales volumes for full-year 2019 were off only slightly compared with 2018, according to NGI's Top North American Natural Gas Marketers rankings.
The 21 gas marketers that participated in both NGI's latest quarterly survey and the year-ago survey reported combined sales transactions of 113.99 Bcf/d in 4Q2019, a 2% decline compared with 116.89 Bcf/d in 4Q2018. The addition of four marketers since the 4Q2018 survey -- Cima Energy LP (3.78 Bcf/d), Antero Resources Corp. (3.19 Bcf/d), Hartree Partners (1.91 Bcf/d) and Engie Energy Marketing NA (0.90 Bcf/d) -- brought the 4Q2019 survey total to 123.77 Bcf/d.
It was the third consecutive quarterly NGI survey to report year/year declines. Prior to decreases reported in the 2Q2019 survey, marketers had reported year/year increases in six consecutive surveys.
In the latest survey, six of the survey's Top 10 marketers, including the two leaders, and 12 companies overall reported lower numbers in 4Q2019 than in the year-ago period.
Perennial No.1 BP plc reported 20.08 Bcf/d in 4Q2019, a 10% decrease compared with 22.33 Bcf/d in 4Q2018. The London-based supermajor, which reported a 13% year/year decrease on the 3Q2018 survey, has said it expects global natural gas markets to remain oversupplied to 2021. Still, BP's oil and natural gas trading arm performed well during 4Q2019 according to CFO Brian Gilvary.
At No. 2, Macquarie Energy reported a second consecutive year/year decline following four consecutive upward quarters, with 12.13 Bcf/d in 4Q2019, compared with 12.57 Bcf/d in 4Q2018.
Volumes for Tenaska (10.60 Bcf/d) and Shell Energy NA (9.90 Bcf/d) were unchanged year/year, while Direct Energy (6.39 Bcf/d) reported a 4% increase compared with 4Q2018. Chevron Corp. (4.12 Bcf/d) was up 6% year/year.
Rounding out the Top 10 were ConocoPhillips (8.17 Bcf/d, a 3% year/year decrease), Sequent Energy Management (6.40 Bcf/d, a 4% decrease), J. Aron & Co. (5.43 Bcf/d, a 14% decrease), and EDF Trading NA (4.29 Bcf/d, a 15% decrease).
Marketers are bracing themselves for potentially harder times in 2020, with the impacts of a global gas glut, chronically low prices and the still evolving coronavirus pandemic looming, but liquefied natural gas (LNG) exports may still be a silver lining in those storm clouds, thanks in large part to long-term offtake contracts that make cargoes relatively insensitive to global prices, according to RBN analyst Bob Tippee.
First-wave U.S. LNG export facilities came online while Asian demand was growing rapidly, especially in China, but the global LNG market has been weakening, and "the potential impact of the new coronavirus on the world's economy -- and LNG demand with it -- remain highly uncertain," Tippee wrote in a recent blog post. Yet U.S. LNG exports continue to grow.
"For a number of reasons, offtakes of U.S. LNG find it difficult to respond to short-term price shifts. Most companies, for example, include LNG lifting decisions in annual plans and quarterly updates and cannot easily cancel cargoes to accommodate short-term price fluctuations.
"An even stronger reason for U.S. exports to grow in a weakening market is that more than 90% of the liquefaction capacity in operation or being commissioned is underpinned by long-term, 'take-or-pay' sales and purchase agreements, which obligate offtakers to accept cargoes regardless of international price spreads," Tippee said.
Other highlights of NGI’s 4Q2019 survey included a 21% increase year/year for Castleton Commodities (3.97 Bcf/d), a 6% increase for ExxonMobil Corp. (3.00 Bcf/d), and a 41% increase for ARM Energy Management (2.87 Bcf/d).
Cabot Oil & Gas Corp. reported 2.46 Bcf/d, a 10% increase from the year ago period, and Ovintiv -- formerly Encana Corp. -- came in with a 32% increase (1.62 Bcf/d).
In NGI's Full-Year 2019 Top North American Gas Marketers Ranking, BP reported a 9% decrease compared with 2018 (19.78 Bcf/d versus 21.66 Bcf/d) and Macquarie an 8% decrease (11.73 Bcf/d versus 12.80 Bcf/d), while 11 other marketers reported increases from 2018.
Highlights of the full-year survey include 1% increases for both Tenaska (10.70 Bcf/d, compared with 10.60 Bcf/d in 2018), and Shell (9.80 Bcf/d, compared with 9.70 Bcf/d in 2018), and a 3% increase for Direct Energy (5.84 Bcf/d, compared with 5.68 Bcf/d in 2017).
Chevron reported a 16% increase over 2018 (4.02 Bcf/d), as did Cima (3.77 Bcf/d). Increases for the full year were also reported by Castleton Commodities (3.50 Bcf/d), ExxonMobil (3.04 Bcf/d), ARM Energy (2.41 Bcf/d) and Cabot (2.37 Bcf/d). Ovintiv (1.58 Bcf/d) and Apache (0.64 Bcf/d) also reported increases in 2019 compared with 2018.
CFE International's average sales for 2018 was 2.28 Bcf/d, compared to a 2017 calculation of 2.46 Bcf/d, which was based on 3Q2017 and 4Q2017 data only. CFE didn't trade natural gas in the first half of 2017.
Full-year results for three companies that joined the NGI survey during the year -- Antero, Hartree Partners, and Engie Energy Marketing NA -- were calculated by pro-rating their partial-year volumes. The 22 gas marketers that participated in both this and last year's surveys reported combined sales transactions of 115.40 Bcf/d in 2019, a 1% decline compared with 116.92 Bcf/d in 2018.
Not included in the latest NGI surveys is long time participant Devon Energy Corp., which recently transformed itself into a Lower 48 oil-rich powerhouse. The slimmed-down independent cast off its once premier Barnett Shale portfolio, which had launched entry into the unconventional natural gas business in the early 2000s. With the sale, combined with an exit from Canada, Devon completed a multi-year metamorphosis to a Lower 48-trained oil operator in the Permian Delaware, Powder River Basin, Eagle Ford Shale and Oklahoma's STACK, aka the Sooner Trend of the Anadarko Basin, mostly in Kingfisher and Canadian counties, and downplayed its natural gas business.