Professional Documents
Culture Documents
Calculating The Impact of LNG Exports On The Price of LNG
Calculating The Impact of LNG Exports On The Price of LNG
Calculating The Impact of LNG Exports On The Price of LNG
Aug.22.16|About:TheUnited(UNG)
Summary
LNGexportsbeganinlateFebruaryfromCheniereEnergy'sSabinePassfacility
andhavesinceprovidedaconsistentsourceoftemperatureindependentnatural
gasdemand.
ThisarticlediscussestheimpactofLNGexportsbothonthenaturalgasstorage
pictureaswellasonthepriceofthecommodityoverthelast9months.
Mynaturalgassentiment,outlook,andpositionsarediscussedindetail.
Thenaturalgasindustryunderwentyetanotherevolutionthisspringwiththeonsetof
liquefiednaturalgas((NYSEMKT:LNG))exportsfromCheniereEnergy's(LNG)Sabine
Passterminal.OriginallyconceivedasanLNGimportterminalinthelate2000spriorto
thesurgeindomesticproductionandcollapseinpricesduetotheFrackingBoomthat
madeimportsuneconomical,theSabinePassfacilitywasconvertedtothefirstUSexport
terminalover7years.Afternaturalgasbeganflowingtothefacilityinstopsandstartsin
lateNovember2015,thefirstLNGcargodepartedonFebruary24viathetankerAsian
Vision.Sincethen,morethan20tankershavedepartedthefacilityandanewindustry
wasborn.Butwhatimpact,ifany,hasLNGhadontheUSpriceofnaturalgas?This
articlediscussesthemagnitudeofLNGexportsandtheroletheyhaveplayedinwhathas
beenadynamicsummerforthedomesticnaturalgasmarket.
FeedgasdeliveriestoSabinepassarefedprimarilybyCheniereTrail'sownCreoleTrail
pipelinewithadditionalconnectionsfromtheTETCO,Transco,andTrunklinepipelines.As
Figure1belowshows,therehavebeen2stagesofgrowthofLNGexportsoverthepast
6months.
Figure1:DailynaturalgasfeedgasdeliveriestoSabinePassshowinginitiationof
Train1inlateFebruaryandTrain2inlateJulywithdeliveriespeakingat1.3
BCF/day.[Source:CelsiusEnergywithdatafromCreoleTrail,Tetco,Trunkline&Transco
Pipelines]