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Reporting on the Natural Gas marketplace since 1981
1 NATGASINTEL.COM | @NGInews | © COPYRIGHT INTELLIGENCE PRESS 2020 | FOR A FREE TRIAL VISIT NATGASINTEL.COM
MARKETS REPORTOctober Natural Gas Futures Extend Rally As Storage Surplus Fears Subside
Natural gas futures soared for a second consecutive day on Thursday after a light storage build provided a positive surprise and liquified natural gas (LNG) levels further recovered from interruptions imposed by a furious storm season in the Gulf of Mexico (GOM).
The October Nymex contract jumped 12.3 cents day/day and settled at $2.248/MMBtu. A day earlier the prompt month spiked nearly 30 cents on favorable weather shifts and early signs of LNG improvement.
November advanced 10.5 cents to $2.899 as traders continued to bet on winter-driven demand supporting prices.
Spo t gas p r i ces a l so ad -vanced. NGI’s Spot Gas National Avg. rose 9.5 cents to $1.865.
The U.S. Energy Information Administration (EIA) on Thursday reported an injection of
REGULATORYCalifornia Facing Retail Natural Gas Challenges In Transition to Low Carbon Future
While Gov. Gavin Newsom wants California to move toward a net-zero emissions future, eliminating natural gas from the energy mix over the next 30 years may be difficult, ac-cording to a recent report.
In “The Challenge of Retail Gas in California’s Low-Carbon Fu-ture,” academic researchers analyzed scenarios that could meet a goal to achieve an 80% reduction in green-house gas (GHG) emissions by 2050 from 1990 levels. ...cont' pg. 11
...cont' pg. 3
REGULATORYFERC Urged to Use Natural Gas Pipeline Reports in Assessing Reliability Risks
The Government Accountability Office (GAO) has advocated for the use of natural gas pipeline operator reports and other information in help-ing FERC identify, assess and respond to risks to reliability.
GAO was tapped by Sen. Jack Reed (D-RI), who is a ranking member of the Subcommittee on Transporta-tion, Housing and Urban Develop-ment, and Sen. Sheldon Whitehouse (D-RI) to review federal oversight of service interruptions involving interstate natural gas transmission pipelines. In January 2019, a weeklong outage affected 7,000 homes and busi-nesses in Rhode Island. At the time, utility National Grid plc said it cut gas service to customers on Aquidneck Is-land “out of an abundance of caution” after “experiencing a low
OUTLOOKChina Chasing Carbon Neutrality by 2060, But LNG Imports Unlikely at Risk
China is aiming to achieve peak carbon dioxide (CO2) emis-sions before 2030 and carbon neutrality before 2060, President Xi Jinping said Wednesday.
In an address to the United Nations (UN) General Assembly focused largely on the need for a coordinated global response to the Covid-19 pandemic, Xi said China will scale up its Intended
Nationally Determined Contribu-tions under the UN global climate agreement, aka the Paris Agreement, from which the United States for-mally withdrew at the direction of President Trump.
“Humankind can no longer afford to ignore the repeated warn-ings of nature and go down the beaten path of extracting resources without investing in conservation, pursuing development
FRIDAY, SEPTEMBER 25, 2020 - VOL. 28, NO. 56
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Mariner East Permit Modifications OK’d as
Pennsylvania Regulator Calls for Public Outreach
Previous 5 Days Table
Sep 18
Sep 21
Sep 22
Sep 23
Sep 24
October Futures 2.048 1.835 1.834 2.125 2.248
Henry Hub 1.565 1.335 1.480 1.735 1.935
Chicago 1.460 1.435 1.500 1.740 1.895
AGT Citygate 1.155 1.050 1.260 1.455 1.565
Opal 2.000 2.220 2.185 2.320 2.440
SoCal Bdr. Avg. 1.695 1.920 1.965 2.170 2.305
NOVA 1.760 1.830 1.850 2.095 2.285More Detailed Market Prices on Pages 2-5.
INSIDE THIS ISSUEAdvanced Truck Regulations Pointing to Hydrogen Growth in California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7Listen Now: Learn About the Basics of U.S. LNG Terminals on NGI’s Hub & Flow Podcast . . . . . . . . . . . . 10
NGI’s Daily Gas Price Index Friday, September 25, 2020
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Trade Date: Sep 24; Flow Date(s): Sep 25RANGE AVG CHG VOL DEALS
South TexasAgua Dulce -- -- -- -- --Florida Gas Zone 1 1.910-1.910 1.910 0.190 4 1NGPL S. TX -- -- -- -- --Tennessee Zone 0 South 1.960-2.000 1.990 0.185 43 9Texas Eastern S. TX 1.900-1.985 1.960 0.225 221 36Transco Zone 1 1.980-1.980 1.980 0.180 14 4Tres Palacios 1.965-2.100 2.040 0.245 283 41S. TX Regional Avg. 1.900-2.100 1.975 0.200 564 91
East TexasAtmos Zone 3 1.820-1.820 1.820 0.235 5 2Carthage 1.785-1.900 1.845 0.205 72 17Golden Triangle Storage -- -- -- -- --Houston Ship Channel 2.000-2.030 2.005 0.320 150 24HPL - East Texas Pool -- -- -- -- --Katy 1.970-2.100 2.015 0.330 290 49Maypearl -- -- -- -- --Moss Bluff 1.980-2.050 2.015 0.205 209 29NGPL TexOk 1.830-1.890 1.855 0.175 763 112Tennessee Zone 0 North 1.830-1.830 1.830 0.110 12 2Texas Eastern E. TX 1.000-1.100 1.045 -0.125 48 10Tolar Hub 1.900-2.000 1.945 0.320 133 19Transco Zone 2 1.870-1.940 1.885 0.080 25 3E. TX Regional Avg. 1.000-2.100 1.825 0.185 1,706 267
West Texas/SE New MexicoEl Paso Permian 1.330-1.790 1.440 0.035 431 94El Paso - Keystone Pool 1.330-1.500 1.440 0.040 306 60El Paso - Plains Pool 1.550-1.790 1.720 0.075 12 6El Paso - Waha Pool 1.350-1.480 1.415 0.020 114 28Northern Natural Gas 1-7 -- -- -- -- --Oneok WesTex 1.330-1.460 1.395 -0.015 125 24Transwestern 1.360-1.400 1.385 0.035 48 10Transwestern - Central 1.400-1.400 1.400 -- 10 2Transwestern - W. TX 1.360-1.400 1.380 0.030 38 8Waha 1.300-1.480 1.385 -0.005 672 124W. TX/SE NM Regional Avg. 1.300-1.790 1.440 0.020 1,037 200
MidwestAlliance 1.840-1.900 1.880 0.140 241 30ANR ML7 1.890-2.050 1.920 0.040 21 3Bluewater Hub -- -- -- -- --Chicago Citygate 1.860-1.930 1.895 0.155 524 83Chicago - Nicor Gas 1.860-1.925 1.895 0.155 226 38Chicago - NIPSCO 1.870-1.930 1.900 0.160 288 42Chicago - North Shore -- -- -- -- --Chicago - Peoples 1.880-1.900 1.900 0.155 11 3Consumers Energy 1.830-1.900 1.885 0.105 437 62Dawn 1.740-1.925 1.870 0.135 1,456 253Defiance 1.750-1.850 1.805 0.100 95 22Rover-ANR 1.750-1.840 1.785 -- 70 16Rover-Panhandle 1.850-1.850 1.850 0.145 25 6Emerson 1.850-1.875 1.855 0.125 160 34Joliet 1.840-1.900 1.880 0.140 241 30Lebanon 1.800-1.810 1.805 0.095 33 8Michigan Consolidated 1.820-1.890 1.855 0.105 321 48NGPL Amarillo Mainline 1.825-1.850 1.845 0.125 55 10NGPL Iowa-Illinois -- -- -- -- --NGPL MidAmerican 1.880-1.880 1.880 0.140 10 4Parkway/Union 1.740-1.875 1.790 0.115 84 26REX Zone 3 Delivered 1.795-1.895 1.855 0.135 609 118REX into ANR - Shelby 1.795-1.820 1.810 0.080 84 10REX into MGT - Edgar 1.800-1.875 1.850 0.110 86 18REX into NGPL - Moultrie 1.825-1.895 1.860 0.150 393 76REX into PEPL - Putnam 1.860-1.875 1.865 0.125 45 8
CASH MARKET PRICES
Trade Date: Sep 24; Flow Date(s): Sep 25RANGE AVG CHG VOL DEALS
REX into Trunk - Douglas 1.820-1.860 1.850 0.110 3 6St. Clair -- -- -- -- --Midwest Regional Avg. 1.740-2.050 1.860 0.125 4,042 701
MidcontinentANR SW 1.735-1.820 1.800 0.145 157 30El Paso Anadarko 1.800-1.800 1.800 0.120 20 2Enable East 1.855-1.885 1.865 0.165 51 16NGPL Midcontinent 1.770-1.850 1.805 0.125 86 29Northern Border Ventura 1.820-1.880 1.865 0.125 170 23Northern Natural Demarc 1.840-1.880 1.870 0.125 80 15Northern Natural Gas 8-12 -- -- -- -- --Northern Natural Gas 13-16A -- -- -- -- --Northern Natural Ventura 1.850-1.875 1.865 0.110 85 19OGT 1.855-1.950 1.915 0.160 105 20Panhandle Eastern 1.600-1.840 1.770 0.140 369 53Southern Star 1.770-1.790 1.775 0.120 90 12Transwestern Panhandle Pool -- -- -- -- --Midcontinent Regional Avg. 1.600-1.950 1.835 0.135 1,208 219
North Louisiana/ArkansasEnable South -- -- -- -- --NGPL Gulf Coast Mainline -- -- -- -- --Perryville 1.820-1.820 1.820 0.150 16 1Texas Eastern, M1, 24 1.700-1.750 1.700 0.050 9 6Texas Gas Zone 1 1.760-1.830 1.810 0.070 359 77Trunkline Zone 1A 1.790-1.830 1.815 0.080 63 8N. LA Regional Avg. 1.700-1.830 1.785 0.085 447 92
South LouisianaANR SE 1.900-1.920 1.905 0.155 81 10Bobcat Storage -- -- -- -- --Columbia Gulf Mainline 1.750-1.800 1.785 0.095 227 35Columbia Gulf onshore 1.780-1.890 1.865 0.130 188 32Egan Hub 1.890-1.940 1.925 -- 54 4Florida Gas Zone 2 1.910-1.910 1.910 -- 6 1Henry Hub 1.930-1.950 1.935 0.200 390 59Pine Prairie 1.890-1.920 1.910 0.165 207 26Southern Natural 1.895-1.950 1.910 0.165 358 56Tennessee Line 500 1.860-1.900 1.890 0.155 243 42Tennessee Line 800 1.800-1.870 1.835 0.095 299 38Texas Eastern E. LA 1.860-1.910 1.885 0.115 150 24Texas Eastern W. LA 1.860-1.935 1.920 0.165 310 36Texas Gas Zone SL -- -- -- -- --Transco Zone 3 1.865-1.950 1.915 0.160 290 44Trunkline E. LA 1.840-1.840 1.840 0.220 2 2Trunkline W. LA -- -- -- -- --S. LA Regional Avg. 1.750-1.950 1.890 0.155 2,799 409
SoutheastDominion Energy Cove Point -- -- -- -- --FGT Citygate 2.065-2.190 2.150* -- -- --Florida Gas Zone 3 1.940-2.050 2.020 0.150 108 24Southern Pines -- -- -- -- --Tenn Zone 1 100L 1.780-1.875 1.825 0.110 102 18Tenn Zone 1 non-St. 87 1.810-1.810 1.810 -- 9 2Tenn Zone 1 St. 87 1.780-1.875 1.830 0.115 93 16Texas Eastern M-1, 30 -- -- -- -- --Transco Zone 4 1.890-1.955 1.930 0.175 658 103Transco Zone 5 1.850-1.980 1.945 0.125 83 27Transco Zone 5 North 1.850-1.850 1.850 0.095 11 6Transco Zone 5 South 1.900-1.980 1.960 0.140 73 21Southeast Regional Avg. 1.780-2.190 1.925 0.120 950 172
AppalachiaColumbia Gas 1.335-1.360 1.345 0.025 111 32Dominion North 1.325-1.330 1.330 0.090 20 4Dominion South 1.300-1.360 1.340 0.085 883 169
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NGI’s Daily Gas Price Index Friday, September 25, 2020
...cont' pg. 4
Trade Date: Sep 24; Flow Date(s): Sep 25RANGE AVG CHG VOL DEALS
Leidy Hub 1.350-1.350 1.350 0.090 1 1Millennium Delivered -- -- -- -- --Millennium East Pool 1.320-1.360 1.345 0.100 171 44Tenn Zone 4 200L 1.620-1.695 1.660 0.185 399 69Tennessee Zn 4 313 Pool 1.250-1.400 1.310 0.040 62 24Tennessee Zn 4 Marcellus 1.250-1.310 1.285 0.060 94 32Texas Eastern M-2, 30 Delivery -- -- -- -- --Texas Eastern M-2, 30 Receipt 0.130-0.450 0.265 -0.470 970 183Texas Eastern M-3, Delivery 1.370-1.410 1.400 0.060 60 17Texas Eastern M-3, Receipt 1.000-1.000 1.000 -0.285 50 3Transco-Leidy Line 1.315-1.400 1.355 0.100 56 19Appalachia Regional Avg. 0.130-1.695 1.250 0.010 2,874 597
NortheastAlgonquin Citygate 1.530-1.800 1.565 0.110 152 35Algonquin Citygate (non-G) 1.530-1.550 1.545 0.105 122 30Algonquin Receipts 1.250-1.420 1.365 0.090 187 32Dracut -- -- -- -- --Iroquois Zone 1 -- -- -- -- --Iroquois Zone 2 1.850-1.950 1.885 0.020 60 12Iroquois, Waddington 1.850-1.850 1.850 -- 10 2Maritimes & Northeast 3.750-3.750 3.750 -0.210 2 1Niagara 1.500-1.600 1.575 0.255 42 18PNGTS 3.250-3.500 3.290 0.045 8 5E Hereford/Pittsburg -- -- -- -- --PNGTS Non-Border 3.250-3.500 3.290 0.045 8 5Tenn Zone 5 200L 1.650-1.670 1.650 0.155 201 8Tenn Zone 5 200L East 1.650-1.650 1.650 0.160 184 6Tenn Zone 5 200L West 1.670-1.670 1.670 0.140 17 2Tenn Zone 5 300L -- -- -- -- --Tenn Zone 6 200L 1.580-1.750 1.635 0.150 174 40Tenn Zone 6 200L North 1.680-1.750 1.710 0.085 29 10Tenn Zone 6 200L South 1.580-1.650 1.620 0.150 145 30Tenn Zone 6 300L -- -- -- -- --Transco Zone 6 non-NY 1.300-1.380 1.350 0.100 196 48Transco Zone 6 non-NY North 1.300-1.370 1.345 0.095 193 46Transco Zone 6 non-NY South 1.380-1.380 1.380 -0.070 3 2Transco Zone 6 NY 1.300-1.410 1.360 0.085 75 19Northeast Regional Avg. 1.250-3.750 1.870 0.085 1,104 220
Rocky MountainsCheyenne Hub 1.735-1.805 1.770 0.100 440 74
CASH MARKET PRICES
Trade Date: Sep 24; Flow Date(s): Sep 25RANGE AVG CHG VOL DEALS
CIG 1.750-1.790 1.760 0.125 69 10CIG DJ Basin 1.755-1.770 1.760 0.120 16 4El Paso Bondad 1.740-1.790 1.760 0.065 116 20El Paso San Juan 1.740-1.800 1.760 0.050 162 32Kern River 2.350-2.480 2.385 0.090 153 34Kingsgate 1.850-1.860 1.850 0.050 4 3Northwest S. of Green River 1.735-1.760 1.755 0.075 44 8Northwest Sumas 2.650-2.900 2.765 0.335 30 9Northwest Wyoming Pool 2.310-2.420 2.395 0.125 138 24Opal 2.435-2.440 2.440 0.120 25 5Questar -- -- -- -- --Ruby - Receipts 2.425-2.445 2.435 0.145 20 4Stanfield 2.420-2.450 2.435 0.050 66 12Transwestern San Juan 1.760-1.800 1.775 0.065 46 10White River Hub 1.750-1.825 1.770 0.100 304 56Rocky Mtns. Regional Avg. 1.735-2.900 2.055 0.090 1,629 305
Arizona/NevadaEl Paso S. Mainline/N. Baja 2.200-2.400 2.290 -0.080 118 20Kern Delivery 2.620-2.750 2.730 -0.005 346 65
CaliforniaMalin 2.400-2.490 2.455 0.125 289 56PG&E Citygate 3.915-4.000 3.960 0.195 499 87SoCal Citygate 2.800-2.950 2.840 -0.020 146 30Southern Border, PG&E 1.800-1.850 1.825 0.025 21 8SoCal Border Avg. 1.850-2.720 2.305 0.135 503 109SoCal Border - Blythe -- -- -- -- --SoCal Border - Ehrenberg 2.300-2.500 2.355 0.045 92 22SoCal Border - Kern River Station 2.600-2.700 2.660 0.085 49 15SoCal Border - Kramer 2.600-2.720 2.655 -0.050 122 26SoCal Border - Needles 1.850-1.950 1.865 0.065 92 17SoCal Border - Topock 1.850-1.900 1.860 0.065 96 17SoCal Border - Wheeler Ridge 2.600-2.700 2.665 0.060 53 12California Regional Avg. 1.800-4.000 2.495 0.065 1,456 290National Avg. 0.130-4.000 1.865 0.095 20,273 3,648
CanadaAlliance (APC) - ATP 2.270-2.350 2.300 0.165 99 19Empress 2.180-2.295 2.260 0.260 588 59NOVA/AECO C 2.195-2.310 2.285 0.190 2,690 388Westcoast Station 2 2.290-2.350 2.305 0.095 172 42
Prices are in U.S.$/MMBtu except locations in the Canada section which are in Cdn$/GJ. The deals column represents the number of transactions used by NGI in the calculation of the price. The volume column is the sum of the volume of those deals, in thousand MMBtus/day. Volumes may not total because of rounding. The data upon which we derive our indexes include both data provided to NGI from the ICE trading platform as well as submitted directly from companies who are principals to the trade. For more information, please see NGI's Price Methodology.
*Assessed based on trades that were conducted at a basis differential to the day-ahead Florida Gas Transmission Zn 3 index that appears in this table.
66 Bcf into storage for the week ending Sept. 18. The result came in below the low end of estimates found by major polls and eased containment concerns that had permeated markets following the prior week’s relatively lofty build of 89 Bcf.
Ahead of the EIA report, Bloomberg and Reuters surveys found an estimate of 68 Bcf on the low end of their ranges, while the range of a Wall Street Journal poll started at 71 Bcf. NGI projected an injection of 71 Bcf.
The latest injection also proved bullish compared to a year earlier, when EIA reported a 97 Bcf injection. The previous five-year average build for the week was 80 Bcf.
“As storage containment fears abate and the gas market looks ahead to an undersupplied winter, significant gains are possible,” EBW Analytics Group CEO Andy Weissman said of gas prices in coming weeks.
. . . from MARKETS REPORT - Storage Surplus Fears Subside, pg. 1Several analysts said the build for the Sept. 18 week reflected
improved LNG volumes, as feed gas levels hovered near 8 Bcf at the end of the week, as well as continued cooling demand amid late sum-mer heat in key regions. Temperatures were hotter than normal over the Northwest and Southeast during the covered week, and intense heat blanketed the West and Southwest.
“This number reflects very tight balances — the tightest we have seen in our data all summer long,” Bespoke Weather Services said.
The latest build nevertheless lifted inventories to 3,680 Bcf, above the year-earlier level of 3,176 Bcf and above the five-year av-erage of 3,273 Bcf. With seven more weeks in the traditional storage season, an average weekly injection of 45.71 Bcf would put storage on track to hit 4.0 Tcf. At that level, containment could still be challenging.
“It all hinges on containment or not, and we continue to walk a very fine line there,” Bespoke said.
NGI’s Daily Gas Price Index Friday, September 25, 2020
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As such, the industry will likely need help from sustained LNG export momentum and potentially early winter-like temperatures to ward off the threat of storage surpluses, some analysts have said. Posi-tive developments on both fronts helped support the rally Thursday.
Early this week Tropical Storm Beta hampered LNG feed gas flows to Gulf Coast terminals and volumes dropped below 4.0 Bcf Tuesday. The storm also brought strong winds and flooding to the Texas coast, curbing cooling demand.
However, as Beta weakened, LNG volumes ticked back above 4.0 Bcf Wednesday and approached 6.0 Bcf Thursday.
Increased demand for Lower 48 gas exports in Europe and es-pecially Asia ahead of winter — after a coronavirus-induced slump earlier this year — could provide a sustainable boost. Analysts are increasingly optimistic as more governments overseas vow not to shut down their economies again, even if the virus surges anew.
“The pandemic is not over,” but a global economic recovery is underway, Barclays analysts said Thursday. “China has bounced back rapidly, and, aided by large policy support,” recessions across
HENRY HUB FUTURES PRICES
...cont' pg. 7
Europe “look to be less severe than earlier feared.” Activity is pick-ing up, and the analysts expect the global economy to expand by 4.9% in 2021.
Increased economic activity would breed greater commercial and industrial energy demand.
Trade Date: Sep 24CONTRACT OPEN HIGH LOW SETTLE CHANGE
Oct-20 2.1950 2.3200 2.1690 2.2480 0.1230Nov-20 2.8210 2.9280 2.7750 2.8990 0.1050Dec-20 3.2430 3.3600 3.2300 3.3430 0.1140Jan-21 3.3600 3.4660 3.3470 3.4510 0.1030Feb-21 3.3150 3.4080 3.3010 3.3930 0.0900Mar-21 3.1740 3.2520 3.1590 3.2390 0.0740Apr-21 2.8420 2.8740 2.8220 2.8680 0.0340May-21 2.7800 2.8110 2.7700 2.8100 0.0270Jun-21 2.8080 2.8320 2.7950 2.8320 0.0250Jul-21 2.8430 2.8650 2.8310 2.8630 0.0200Aug-21 2.8610 2.8730 2.8450 2.8720 0.0160Sep-21 2.8460 2.8600 2.8300 2.8600 0.0160Oct-21 2.8750 2.8880 2.8600 2.8880 0.0150Nov-21 2.9300 2.9420 2.9150 2.9420 0.0150Dec-21 3.0660 3.0770 3.0510 3.0770 0.0140Jan-22 3.1600 3.1800 3.1520 3.1790 0.0140Feb-22 3.1120 3.1260 3.1030 3.1260 0.0130Mar-22 2.9160 2.9450 2.9160 2.9450 0.0110Apr-22 2.4900 2.5010 2.4800 2.4970 0.0060May-22 2.4310 2.4380 2.4230 2.4380 0.0060Jun-22 2.4570 2.4630 2.4570 2.4630 0.0050Jul-22 2.4830 2.4940 2.4830 2.4940 0.0050Aug-22 2.4980 2.5040 2.4980 2.5040 0.0040Sep-22 2.4860 2.4940 2.4860 2.4940 0.0050Oct-22 2.5000 2.5150 2.5000 2.5150 0.0050Nov-22 2.5800 2.5880 2.5800 2.5880 0.0080Dec-22 2.7510 2.7620 2.7510 2.7620 0.0100Jan-23 2.8840 2.8840 2.8840 2.8840 0.0100Feb-23 2.8440 2.8440 2.8440 2.8440 0.0100Mar-23 2.6950 2.6950 2.6950 2.6950 0.0110Apr-23 2.3650 2.3650 2.3650 2.3650 -0.0020May-23 2.3230 2.3230 2.3230 2.3230 -0.0020Jun-23 2.3530 2.3530 2.3530 2.3530 -0.0010Jul-23 2.3950 2.3950 2.3860 2.3860 -0.0010Aug-23 2.3940 2.3940 2.3940 2.3940 0.0000Sep-23 2.3830 2.3830 2.3830 2.3830 0.0000
Source: CME Group, Inc. Updates provided by CSI.
Full CME Natural Gas Futures settlements out 12+ years are available here.
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NGI’s Daily Gas Price Index Friday, September 25, 2020
The current assessments are estimated US-to-Mexi-co natural gas cost plus transport prices; please refer to the Mexico Gas Price Index Methodology for pipe-line-specific costs and for any additional information.
Moving forward, NGI believes the best price transparen-cy are price indexes based on actual transactions, and is asking all buyers and sellers of natural gas in Mexico to support this effort by providing those transactions to NGI on a confidential basis. NGI was at the forefront of this market price deregulation in the United States in the 1980s and has the experience to help the Mexico mar-ket do the same in 2019 and beyond. For more informa-tion, please contact Dexter Steis or Pat Rau at +1 (703) 318-8848 or [email protected].
Want NGI's Mexico Natural Gas Price Index in a spread-sheet? Download a sample in Excel-friendly format.
Want more on Mexico? Start a trial to NGI's Mexico Gas Price Index and get a comprehensive picture of daily news, prices, and analytics that impact this growing marketplace. Request your trial.
1) Transport rates for U.S. interstates, SISTRANGAS, and other Mexico pipelines taken from electronic bulletin boards (EBBs). However, Texas intrastate pipelines do not have EBBs, so our transportation costs for these are an estimates. For more information on which charges we include in these fees, please see the below note.
2) Calculated Monterrey price would be the same as Los Ramones, and calculated El Encino would be the same as Torreon, if we had used the SISTRANGAS tariff, since SISTRANGAS is a zone based system.
3) U.S. gas is not likely to be delivered to Cactus or Salina Cruz, but these represent a theoretical delivered price in Zonas Sur and Istmo.
NGI’s Daily Gas Price Index Friday, September 25, 2020
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NGI’s Daily Gas Price Index Friday, September 25, 2020
...cont' pg. 9
Source: Tallgrass Energy LP, NGI calculations. For more info and daily 10am ET updates of this chart, go to natgasintel.com/rextracker
REGULATORYAdvanced Truck Regulations Pointing to Hydrogen Growth in California
While not eliminating its use, there will be less natural gas in California’s energy mix and potentially more hydrogen use if state regulators have their way.
Representatives from the California Air Resources Board (CARB), the California Hydrogen Business Council (CHBC) and sustainable energy engineering firm Ricardo during a webinar Mon-day deconstructed California truck regulations that could be a boost for hydrogen fuel cell use.
CARB engineer Leslie Goodbody said the agency is predicting 30,000 zero-emission trucks on state roads by 2027, 100,000 by 2030 and 300,000 by 2035. Growth would be driven through the state’s advanced clean truck (ACT) rules to reduce nitrogen oxide (NOx), particulate matter (PM) and greenhouse gas (GHG) emissions.
The rules are expected to contribute to “significant…emis-sions reductions in the state,” Goodbody said during the webinar on Monday.
Speakers addressed questions about the state’s extensive natural gas delivery network and whether it should be pushed more aggres-sively to lower emissions.
“We need zero emissions everywhere feasible and zero combustion using cleaner fuels everywhere else,” said CARB analyst Paul Arneja. “Now we’re trying to kick-start
While overall cooling demand is expected to moderate over the balance of this week, as much of the Lower 48 is expected to see highs in the 70s and 80s, a substantial shift is expected. Nat-GasWeather said that, by the middle of next week, “strong early season cold shots” will span much of the eastern half of the country. This is projected to last several days, creating “a surge in a national demand” as heating needs kick in and compensate for waning air conditioner use.
Cash SailsSpot gas prices Thursday advanced for a third straight day as
warm enough weather continued across much of the United States and lower supplies boosted prices in the East.
Conditions the rest of this week, however, may add little to demand. NatGasWeather said “comfortable highs” will span most of the Lower 48 through the weekend, though “hotter exceptions persist over the Southwest into California,” with highs in the 90s and 100s.
Chicago Citygate prices climbed 15.5 cents day/day to an aver-age $1.895, while CIG advanced 12.5 cents to $1.760.
In the East, where previously reported planned maintenance and curtailments have caused production cuts, Niagara jumped 25.5 cents to $1.575, and Tenn Zone 6 200L gained 15.0 cents to $1.635.Out West, where a brutal wildfire season injected volatility into cash prices this month, PG&E Citygate rose 19.5 cents to $3.960, but So-Cal Citygate fell 2.0 cents to $2.840. n
NGI’s Daily Gas Price Index Friday, September 25, 2020
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NGI’s Daily Gas Price Index Friday, September 25, 2020
the zero-emission market that really doesn’t exist. Beyond that, though, we see there is a need for combustion and low-NOx technologies as well. It is a matter of getting combustion as clean as pos-sible with lower emission standards and cleaner test cycles.”
CARB has a low-carbon fuel standard, and it is striving to have zero emissions when possible, Arneja said. In fact, Gov. Gavin Newsom issued an executive order on Wednesday that would require all new in-state car and passenger truck sales be zero emission by 2035. Regulators are convinced the incentives to truck manufacturers and emis-sions standards for fleet operators would result in health care benefits and transportation jobs, Goodbody said.
CHBC executive director Bill Zobel said hydrogen fuel cells are an important way to create a “smooth, low cost transition” to zero emission vehicles. Hydrogen is a “universal energy car-rier” applicable across the energy spectrum in a variety of applications.
Besides transportation, Zobel touted hydrogen for electricity gen-eration, capturing and storing unused volumes of renewables and produc-ing power from renewable hydrogen. Another application is decarbonizing the gas grid.
“This is an excellent opportunity to decarbonize the gas grid for every-one,” Zobel said.
Ricardo’s Rob Del Core, as-sistant vice president, said the engi-neering company is helping clients meet CARB’s future requirements for electric vehicles (EV) and fuel cell-powered vehicles. A lot of original equipment manufacturers (OEM) for vehicles have EV and fuel cell ve-hicles. “The question is whether they will all be able to meet the CARB requirements on time.”
Recent studies from Ballard Power Systems, Deloitte and others have shown that battery powered trucks alone may not meet the new requirements.
An OEM with an existing EV truck can meet the 2024 require-ments while working on a comple-mentary fuel cell vehicle that could be ready by 2026, Del Core said. In addition, manufacturers without either an EV or fuel cell truck, he said, need to begin to act now to develop technologies. n
NGI’s Daily Gas Price Index Friday, September 25, 2020
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...cont' pg. 11
even the short side of the long-term,” said NGI’s Patrick Rau, director of strategy & research. “They’re already in a movement to try to get gas as a percentage of their total energy mix up, because right now it’s just so much coal.”
Coal accounted for 64% of China’s electricity mix in March 2020, according to the International Energy Agency (IEA).
The target year of 2060 also gives China some breathing room compared to the European Union’s goal of being carbon neutral by 2050, Rau said. A 20-year LNG supply contract signed in the 2020s would expire well before China’s deadline, he noted.
The country’s oil demand, meanwhile, is expected to average 13.6 million b/d in 2020, versus13.7 million in 2019, according to IEA’s latest Monthly Oil Market Report.
‘Big Questions Remain’With Xi’s surprise announcement Tuesday, “the world’s largest
carbon emitter finally shifted from its long-term position of having limited responsibility to reduce global emissions as a developing country, to assuming clearer leadership in tackling climate
at the expense of protection, and exploiting resources without restoration,” Xi said.
“We call on all countries to pursue innova-tive, coordinated, green and open development for all, seize the historic opportunities presented by the new round of scientific and technological revolution and industrial transformation, achieve a green recovery of the world economy in the post-Covid era and thus create a powerful force driving sustainable development.”
An accelerated push toward decarbonization by the superpower could have major implications for global energy markets.
China is the world’s second largest liquefied natural gas (LNG) importer, taking in 61.7 mil-lion tons last year according to the International Group of Liquefied Natural Gas Importers. China also is the second largest oil consumer after the United States.
However, despite the scale of China’s new commitment, “I just can’t see how this announce-ment is bad for LNG over the intermediate term, and
. . . from OUTLOOK - LNG Imports Unlikely at Risk, pg. 1
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Believing that transparent markets empower businesses, economies and communities, NGI works to provide natural gas price transparency for the Americas. NGI‘s Hub & Flow podcast is a part of that effort. n
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...cont' pg. 12
gas pressure situation” with supplier Algonquin Gas Transmission Co., an Enbridge Inc. subsidiary.
GAO found that although gas transportation by interstate pipelines is generally reliable, interstate transmission pipeline operators interrupted service to customers with firm contracts 140 times from 2015-2019. The number of reported interruptions each year ranged from 15 to 35, with an average of 28/year. Meanwhile, the geographical distribution of reported interrup-tions varied, with 29% of reported interruptions occurring in Kansas and Texas.
Using reports submitted to the Federal Energy Regulatory Com-mission, GAO found that gas interruptions usually did not result in a complete loss of service to affected consumers.
Nevertheless, pipeline reliability has been increasingly scruti-nized as several gas systems have experienced major disruptions. Cali-fornia’s gas service has mostly remained intact during this year’s fire season, but Pacific Gas & Electric Co. cut service to localized areas in Northern California in 2017 because of wildfires. Meanwhile, major
. . . from REGULATORY - FERC Urged to Use NatGas Pipeline Reports, pg. 1
change,” said Wood Mackenzie research director Alex Whitworth. China contributes about 28% of estimated global emissions.
Wood Mackenzie’s Gavin Thompson, Asia Pacific vice chair, added, “Of course, big questions remain. Firstly, China’s definition of ‘carbon neutrality’ is not well defined from the short announcement. Further, no roadmap was offered as to how this will be achieved.”
Wood Mackenzie’s recently issued Accelerated Transition Scenario (AET-2) showed China’s emissions falling nearly 60% by 2040 versus 2019 using electrification, renewables, green hydrogen and carbon removal technologies,” said the consultancy’s head of markets and transitions, Prakash Sharma.
“We expect China will need to deploy over a billion tons [of] carbon, capture and storage capacity across its power and industrial sectors,” Sharma said. “These efforts will need to start much earlier and at a higher scale to deliver” on carbon neutrality by 2060.
Thompson said China’s upcoming 14th five-year plan “has the potential to be the most important document in global energy market history…Increased investment in wind, solar, electric vehicle and battery storage technology deployment will almost certainly feature, and we can expect support for green hydrogen and carbon capture technology.”
Thompson said, “if any country can achieve such ambitious goals it will be China. Strong state support and coordination have proven extremely effective at reaching economic goals; if this is now directed toward climate change then China is capable in transforming its carbon emissions trajectory over the coming four decades in exactly the same way it has transformed its economy over the past 40 years.”
During a press conference on Wednesday, China foreign min-istry spokesman Wang Wenbin contrasted China’s stance on climate with that of the United States, which “as the world’s largest emitter of greenhouse gases in cumulative terms, not only failed to ratify the Kyoto Protocol, but also pulled out of the Paris Agreement. It has rejected binding quantified emissions reduction targets for itself and refused to take even the minimum steps to protect the planet.
“By doing so, the U.S. has completely disassociated itself from the global carbon emissions system and arrangements, and seriously held back such global processes as emissions reduction and green and low-carbon development.” n
flooding in Colorado in 2013 led to more than 4,000 customers tem-porarily having their gas service cut.
The GAO analyzed data and interviewed officials from relevant federal agencies, state public utility commissions, interstate transmis-sion pipeline operators, natural gas/electric industry associations and standards-setting associations. It also surveyed a random sample of gas distribution companies.
“Representatives of natural gas industry sectors including gas distribution companies, which typically rely on interstate transmission pipelines for access to natural gas, agreed that the transportation of natural gas via pipelines is generally reliable,” GAO said.
However, industry and state officials told GAO that risks to the reliability of gas service on interstate pipelines could increase in the future because of more intensive use, driven by higher domestic production and use by electric power plants.
Because gas service has consistently been reliable, GAO said “FERC does not routinely use all available information,” which in-cludes reports provided by pipeline operators on the frequency and effects of service interruptions to identify, assess and respond to risks.
“Maintaining the reliable transportation of natural gas, which is integral to ensuring reliable energy service, involves understanding and being prepared to respond to risks as they emerge,” GAO said. “By not routinely using all available information to identify and assess potential risks to the reliability of service on interstate transmission pipelines, FERC is not well positioned to respond, if necessary, to changes in the natural gas industry in order to ensure consumers continue to have reliable service.”
GAO recommended that FERC use available information, such as operator reports on service interruptions, to identify and assess risks to the reliability of this service. It also urged FERC to develop an approach to respond, as appropriate, to any identified risks.
“Demands on the pipeline system are increasing, and our rec-ommendations will help the Commission ensure service continues to be reliable,” GAO said.
FERC agreed to establish a process to incorporate such infor-mation into its ongoing efforts to monitor and address reliability of interstate pipeline service, according to GAO. The federal watchdog plans to provide updated information once it confirms what actions the agency has taken in response to the recommendations. n
The report preceded an executive order by Gov. Gavin Newsom issued Wednesday, who signaled the state by 2035 should require all new in-state cars and passenger truck sales be zero emission.
“This analysis, and work by others, suggests that achieving the state’s ambitious climate goals is possible, but is far from assured, requiring rapid and near-term transformation in all sectors of the economy,” said the authors of the report.
The analysis for the California Energy Commission was com-pleted by Energy and Environmental Economics Inc. and the Uni-versity of California, Irvine’s Advanced Power and Energy Program.
Researchers examined the use of gas over the next 30 years, evaluating scenarios to achieve a 40% reduction in GHG emissions by 2030 and by 80% in 2050 from 1990 levels. Potential costs, energy infrastructure and air quality implications were assessed to decarbon-ize the gas system, with implications for retail gas consumers.
In outlining the “integral part” that gas plays in the state, the authors noted that nearly $14 billion is spent every year
. . . from REGULATORY - California Faces Retail Challenges in Transition, pg. 1
NGI’s Daily Gas Price Index Friday, September 25, 2020
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NGI's Daily Gas Price Index is published daily, each business day by Intelligence Press, Inc. (703) 318-8848.For breaking natural gas and shale news and more detailed pricing data, please visit us at naturalgasintel.comFor a listing of all our premium newsletters and data services, please visit naturalgasintel.com/premiumservicesExecutive Publisher: Dexter Steis ([email protected]). Editor-In-Chief: Alex Steis ([email protected]). Managing Editor: Carolyn L. Davis ([email protected]). Analysts/Price Editors: Patrick Rau, CFA ([email protected]), Nathan Harrison ([email protected]), Josiah Clinedinst ([email protected]). Senior Editor - Markets: Leticia Gonzales ([email protected]). Senior Editor - LNG: Jamison Cocklin ([email protected]). Senior Editor - Mexico and Latin America: Christopher Lenton ([email protected]). Associate Editor - Markets: Kevin Dobbs ([email protected]). Associate Editor: Andrew Baker ([email protected]). Markets Contributor: Jeremiah Shelor ([email protected]). Correspondents: Richard Nemec ([email protected]), Gordon Jaremko ([email protected]), Ronald Buchanan ([email protected]), Eduardo Prud'homme ([email protected]), Adam Williams ([email protected]), Ron Nissimov ([email protected]).Contact us: EDITORIAL: [email protected]; PRICING: [email protected]; SUPPORT/SALES: [email protected]; ADVERTISE: [email protected] Press, Inc. © Copyright 2020. Contents may not be reproduced, stored in a retrieval system, accessed by computer, or transmitted by any means without a site license or prior written permission of the publisher. DISCLAIMERS, LIMITATION OF WARRANTY AND LIABILITY: The Information contained in this newsletter (our Content) is intended as a professional reference tool. You are responsible for using professional judgment and for confirming and interpreting the data reported in our Content before using or relying on such information. OUR CONTENT IS PROVIDED "AS IS" AND WE DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR YOUR PARTICULAR PURPOSE. Although we believe our Content to be complete and accurate as described therein, we make no representations regarding completeness or accuracy. We will not be liable for any damage or loss of any kind arising out of or resulting from access or lack of access to or use of our Content, including but not limited to your reliance on it, errors in the data it contains, and data loss or corruption, regardless of whether such liability is based in tort, contract or otherwise. NGI’s full Subscriber Agreement is available here: naturalgasintel.com/TOS.
Daily Gas Price Index
Friday,September 28, 2020
Volume 28, No. 56
ISSN 1532-1223 (print)ISSN 1532-1231 (online)
for consumption in buildings, industry and power generation. While promising, the use of more renewable natural gas may have little impact on cutting GHGs.
The RNG potential in 2050 depends on whether all of the biomass, estimated at 43 million dry tons could be used only for fuel production 30 years from now. The estimated potential is 635 trillion Btu.
“The relatively inexpensive RNG (from biomethane in landfills and wastes) is limited and cannot alone reduce the GHG intensity of pipe-line gas enough to achieve 80% reduction,” the authors said. “Once the biomethane part of the RNG supply curve is exhausted, then the state must turn to more expensive hydrogen and yet more expensive synthetic natural gas,” or SNG.
Technology, with limits, also could help decarbonize the system through not only RNG, but hydrogen from electrolysis, SNG derived from hydrogen and renewable carbon dioxide. “These fuels allow the continued use of the natural gas distribution infrastructure, but each has limitations.”
A transition strategy was recommended “to ensure, even as gas demand falls, the system remains safe and reliable for remaining gas customers,” which are expected to number into the millions in 2050.
“Early retirement of gas equipment could speed the pace of the gas transition but would come with real economic costs,” said the authors. A “structured gas transition” also should be considered to ensure the viability of infrastructure.
“More research is needed to identify the legal and regulatory barriers to implementing a gas transition strategy, along with targeted electrification programs,” the authors said.
In related news, the Gas Technology Institute and Electric Power Research Institute are collaborating on the Low-Carbon Resources Initiative to develop natural gas alternatives, with support from a group of U.S. gas and electric utilities. n
