A roundup of news and commentary from NGI’s LNG Insight

  • U.S. natural gas futures increased for a seventh day Tuesday, the longest stretch of gains in years amid oppressive heat and rolling blackouts in the Pacific Northwest. The August contract gained two cents to finish at $3.650.  
  • When gas hits the upper $3/MMBtu range, the ability to reduce gas use by substituting with coal-fired power generation is exhausted, according to EBW Analytics Group. The firm said even a steep price increase would free up minimal amounts of natural gas. Producers focused on capital discipline are also unlikely to react quickly. 
  • “Under these circumstances, if a significant gas supply deficit develops, prices could quickly rise to $4.50, $5.00 or even higher,” EBW said. “In an extreme but plausible case, if the deficit reaches several hundred Bcf, prices might need to rise high enough to drive the netback for LNG exports into negative territory. With TTF futures near all-time highs and mid-winter JKM above $14.00, front-month New York Mercantile Exchange contracts for delivery at Henry Hub might need to reach $8.00-10.00 to balance the U.S. market.”
  • FERC has cleared Cheniere Energy Inc. to introduce gas and commission the fuel gas system on the sixth train at its Sabine Pass LNG export terminal in Louisiana. The sixth train would boost overall production at the terminal to 30 million metric tons per year. It is expected to enter service by the end of the year.