Three of the top four natural gas marketers reported volume declines compared with the year-ago period, and 24 leading companies had total sales transactions of 123.44 Bcf/d in 2Q2011, a 3.50 Bcf/d (3%) decrease from the 126.94 Bcf/d they transacted in 2Q2010, according to NGI‘s 2Q2011 Top North American Gas Marketers Ranking.
Despite a ninth consecutive quarterly decline compared to the corresponding year-ago period, BP plc remains firmly atop NGI‘s marketers survey, reporting 21.30 Bcf/d in 2Q2011, a 16% decline compared with 25.30 Bcf/d in 2Q2010. The last time BP reported a quarter-to-quarter increase was 1Q2009, when it reported 31.80 Bcf/d, a 17% increase compared with 1Q2008. BP’s physical sales peaked at 32.50 Bcf/d in 4Q2008.
No. 2 ConocoPhillips reported 15 Bcf/d, a 3% increase compared with 14.60 Bcf/d in 2Q2010, while Shell Energy North America (No. 3 with 12 Bcf/d) and Macquarie Energy (No. 4 with 9.79 Bcf/d) each reported declines compared with 2Q2010.
The survey ranks marketers on sales transactions only. In a separate analysis of federal filings of gas sales, purchases and production, NGI recently found that BP was the only one of the top five U.S. producers of natural gas that also showed up among the top five gas marketers in 2010 (see NGI, July 18). BP led the marketers in combined sales and purchase volumes, followed by Shell, ConocoPhillips, Macquarie and JP Morgan, according to that in-depth NGI report based on 2010 Form 552 filings with the Federal Energy Regulatory Commission.
In the most recent marketer survey, EDF Trading, No. 5 with 7 Bcf/d, rose 9%. But the big gainer was No. 6, JP Morgan, which reported 6.40 Bcf/d in sales in 2Q2011, a 63% increase compared with 3.93 Bcf/d in 2Q2010. JP Morgan, which also reported a significant increase in NGI‘s 1Q2011 survey — 7.26 Bcf/d, up 79% compared with 4.06 Bcf/d in 1Q2010 (see NGI, June 13) — acquired RBS Sempra Commodities’ wholesale natural gas marketing and trading unit late last year (see NGI, Dec. 6, 2010). RBS Sempra, which had reported 6.51 Bcf/d in 3Q2009, exited the survey in 3Q2010.
ExxonMobil Corp., which last quarter said unconventional gas volumes drove a 130% increase compared to the same period in 2010, reported another significant increase in the most recent survey, reporting 4.24 Bcf/d, up 111% compared with 2.01 Bcf/d in 2Q2010. The Irving, TX-based super major’s U.S. unconventional gas-weighted portfolio, substantially built with the buyout of XTO Energy Inc. last year, now totals 76 Tcfe, which is almost 70% more than the companies recognized at the time of the merger (see NGI, Aug. 1).
Source: Quarterly financial reports with the Securities and Exchange Commission, or if necessary, statements signed by company officials and provided to NGI. Some previous-year data has been updated by the companies since it was originally reported.
Companies providing data directly to NGI include Bank of America Merrill Lynch, BP, Chevron, Citigroup, ConocoPhillips, EDF Trading NA, J. Aron & Co.; Gazprom, JP Morgan, Louis Dreyfus, Macquarie Energy, Shell Energy and Tenaska. *Macquarie Energy data reflects Macquarie Energy LLC’s transactions in the United States and Macquarie Energy Canada’s transactions in Canada. **The gas volume figures for Apache, Chesapeake, Devon, EnCana and ExxonMobil represent the amount of North American gas produced in the quarter. Those companies may be marketing more third-party gas for sale. ***J. Aron & Co. is the commodity trading subsidiary of Goldman Sachs.
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With prices refusing to budge higher and production from U.S. shale plays increasing, Maryland-based energy consultant Ben Schlesinger says natural gas remains about where it has been for some time — “a market in search of demand” (see NGI, March 21).
“I think that’s still where we are, and I think our opportunities are basically what they were six months ago,” Schlesinger told NGI. “But I see a brighter picture with respect to coal-to-gas conversions. There’s increasing acceptance of the benefits of converting coal generation to gas generation.”
According to Barclays Capital analysts, gas prices are affected by numerous factors, yet the price floor rests on coal — and the dynamic created by power sector demand is strong enough this year to keep gas prices from falling far below $4/MMBtu for a sustained period (see NGI, Sept. 5a). The power generation sector’s reliance on gas-fired units is slated to increase as operators shift to gas, thanks to its low price and ability to help them meet emissions reduction goals (see NGI, Sept. 5b). “With the economy still having difficulty, people really want to find a cheaper way to meet air quality standards and requirements, and natural gas is the right way to do it,” Schlesinger said.
But the stalled economy and relatively low demand both in North America and Europe are keeping the gas market sluggish, according to Schlesinger. “The fact is that drilling, at least in this country, is now tending toward oil and not gas for the first time in 20 years.”
Researcher Headwaters Economics recently reported that about 15% of all active rigs from 2004 to 2008 were drilling for oil, but the share of rigs actively drilling for oil has climbed steadily since late 2009 from 30% to more than 50% (see NGI, June 27). That shift came as oil prices tripled between early 2009 and May 2011, compared to natural gas prices, which haven’t recovered since their 2008 highs, the researchers said.
Highlights of NGI‘s 2Q2011 survey include a 90% increase for Citigroup (3.61 Bcf/d, compared with 1.90 Bcf/d in 2Q2010), a 29% increase for Southwestern Energy Co. (1.69 Bcf/d, compared with 1.31 Bcf/d in 2Q2010), a 13% increase for Enserco (1.52 Bcf/d, compared with 1.35 Bcf/d in 2Q2010), a 50% increase for Apache (1.52 Bcf/d, compared with 1.01 Bcf/d in 2Q2010) and an 18% increase for Atmos (0.97 Bcf/d, compared with 0.82 Bcf/d in 2Q2010).
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