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Released August 25, 2025 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land,
Texas)--The U.S. natural gas sector was underwhelmed last week, with issues in Canada curbing volumes and inland production on the decline, data show.
The United States leads the world in natural gas production and in exports of liquefied natural gas (LNG). The lack of midstream infrastructure, however, leaves several northern U.S. states dependent partially on Canada for imports.
Data from IIR Energy showed net imports from Canada as of last week were down around 0.9 billion cubic feet per day (Bcf/d) due to a force majeure declaration on the Great Lake system and pipeline issues with the 1,353-mile-long Gas Transmission Northwest network.
Offsetting that at least somewhat, however, was a rebound in exports from Ontario, though net imports are down from last month. Imports last week averaged around 5.3 Bcf/d, compared to levels closer to 6 Bcf/d from Canada for July.
On piped exports, the numbers moved in the opposite direction. Data from IIR Energy show total exports to Mexico last week averaged 7.78 Bcf/d, up from an average of 7.5 Bcf/d for July. Relative strength in exports reflects ongoing high demand from Mexico's power sector.
Natural gas markets nevertheless ended the week with activity generally returning to normal.
Domestic production, meanwhile, is slumping. Data from IIR Energy show total natural gas production was curtailed by around 0.7 Bcf/d last week because of weaker activity in mid-continent states such as Oklahoma, home to the Anadarko shale deposit.
As shale basins mature, they tend to give up more natural gas, meaning reservoirs such as the Permian are getting gassier. The Energy Information Administration (EIA), the U.S. Energy Department's data cruncher, is pointing to a net decline in overall gas production, however.
The EIA in its monthly market snapshot for August reported an expected 3% increase in production from year-ago levels for 116.8 Bcf/d this year. Output falls marginally, however, by 0.1 Bcf/d by next year, with declines coming from smaller-producing basins such as the Eagle Ford.
Supply and demand pressures may be on the supply side in the U.S. market, meanwhile, due to expanding commitments for LNG exports. The United States is already the world leader in LNG exports and is the No. 2 market supplier in Europe, behind Norway.
Members of the European Union are working to increase U.S. LNG imports exponentially under the terms of a newly-brokered free-trade deal with President Donald Trump's administration. New details on the deal emerged last week, though it did little to calm the critics who said volumes outlined in the arrangement are well out of reach.
Recent issues with Gulf Coast terminals, meanwhile, offered some relief from the supply-side squeeze. Feed gas running to the Freeport LNG (Houston, Texas) terminal in Texas declined as the plant struggled with ongoing power issues. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Plant Database can click here for the plant profile.
Volumes running to Freeport dropped as low as 0.65 billion cubic feet on August 19, but had recovered to around 1.9 Bcf later in the week. The terminal can handle as much as 2.4 Bcf/d in feed gas.
Net feed gas last week averaged 14.1 Bcf/d, well below highs closer to 16 Bcf/d set early this year.
Nevertheless, supply-side strains are supporting a premium for Henry Hub, the U.S. benchmark for the price of natural gas. Henry Hub averaged $2.20 per million British thermal units (MMBtu) last year, and the EIA expects it to settle around $4.30 per MMBtu next year.
That could trickle down to a U.S. consumer already bracing for an increase in prices due to recent spikes at the wholesale level. On Thursday, the U.S. Conference Board said its Leading Economic Index for the U.S. economy declined in July.
"Pessimistic consumer expectations for business conditions and weak new orders continued to weigh down the index," said Justyna Zabinska-La Monica, a senior manager for business cycle indicators at The Conference Board.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
The United States leads the world in natural gas production and in exports of liquefied natural gas (LNG). The lack of midstream infrastructure, however, leaves several northern U.S. states dependent partially on Canada for imports.
Data from IIR Energy showed net imports from Canada as of last week were down around 0.9 billion cubic feet per day (Bcf/d) due to a force majeure declaration on the Great Lake system and pipeline issues with the 1,353-mile-long Gas Transmission Northwest network.
Offsetting that at least somewhat, however, was a rebound in exports from Ontario, though net imports are down from last month. Imports last week averaged around 5.3 Bcf/d, compared to levels closer to 6 Bcf/d from Canada for July.
On piped exports, the numbers moved in the opposite direction. Data from IIR Energy show total exports to Mexico last week averaged 7.78 Bcf/d, up from an average of 7.5 Bcf/d for July. Relative strength in exports reflects ongoing high demand from Mexico's power sector.
Natural gas markets nevertheless ended the week with activity generally returning to normal.
Domestic production, meanwhile, is slumping. Data from IIR Energy show total natural gas production was curtailed by around 0.7 Bcf/d last week because of weaker activity in mid-continent states such as Oklahoma, home to the Anadarko shale deposit.
As shale basins mature, they tend to give up more natural gas, meaning reservoirs such as the Permian are getting gassier. The Energy Information Administration (EIA), the U.S. Energy Department's data cruncher, is pointing to a net decline in overall gas production, however.
The EIA in its monthly market snapshot for August reported an expected 3% increase in production from year-ago levels for 116.8 Bcf/d this year. Output falls marginally, however, by 0.1 Bcf/d by next year, with declines coming from smaller-producing basins such as the Eagle Ford.
Supply and demand pressures may be on the supply side in the U.S. market, meanwhile, due to expanding commitments for LNG exports. The United States is already the world leader in LNG exports and is the No. 2 market supplier in Europe, behind Norway.
Members of the European Union are working to increase U.S. LNG imports exponentially under the terms of a newly-brokered free-trade deal with President Donald Trump's administration. New details on the deal emerged last week, though it did little to calm the critics who said volumes outlined in the arrangement are well out of reach.
Recent issues with Gulf Coast terminals, meanwhile, offered some relief from the supply-side squeeze. Feed gas running to the Freeport LNG (Houston, Texas) terminal in Texas declined as the plant struggled with ongoing power issues. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Plant Database can click here for the plant profile.
Volumes running to Freeport dropped as low as 0.65 billion cubic feet on August 19, but had recovered to around 1.9 Bcf later in the week. The terminal can handle as much as 2.4 Bcf/d in feed gas.
Net feed gas last week averaged 14.1 Bcf/d, well below highs closer to 16 Bcf/d set early this year.
Nevertheless, supply-side strains are supporting a premium for Henry Hub, the U.S. benchmark for the price of natural gas. Henry Hub averaged $2.20 per million British thermal units (MMBtu) last year, and the EIA expects it to settle around $4.30 per MMBtu next year.
That could trickle down to a U.S. consumer already bracing for an increase in prices due to recent spikes at the wholesale level. On Thursday, the U.S. Conference Board said its Leading Economic Index for the U.S. economy declined in July.
"Pessimistic consumer expectations for business conditions and weak new orders continued to weigh down the index," said Justyna Zabinska-La Monica, a senior manager for business cycle indicators at The Conference Board.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
