Maintenance Curbing U.S. Feed Gas Levels

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

The amount of feed gas running to U.S. terminals for liquefied natural gas remains below year-end highs. Pipeline maintenance seems to be the culprit.

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Weekly Decline in Gas Activity Observed

The amount of natural gas available for conversion to liquid form for exports from the U.S. Gulf Coast remains limited by maintenance amid signs of an expansion phase, data show.

Industrial Info Resources data show dry natural gas production is down about 0.42 billion cubic feet from Wednesday's levels, with the bulk of declines coming from Texas.

Problems at compressor stations in Pennsylvania had curbed volumes from earlier this week, said Maria Sanchez, a senior natural gas analyst at Industrial Info's energy division. Production, meanwhile, remains subdued largely because maintenance on regional networks is limiting flows, she added.

There are hundreds of natural gas pipelines stemming from the Permian Basin listed in Industrial Info's Global Market Intelligence (GMI) database, with the Northern Natural Gas mainline, which lists Berkshire Hathaway as its parent company, among the largest.

The Permian is the second-largest natural gas producer by volume, after the Appalachia reservoir spread out over West Virginia, Ohio and Pennsylvania. Federal data show Permian production is on pace to expand marginally by next year to average 31.9 billion cubic feet per day (Bcf/d).

U.S. May Need a Buildout Phase to Back LNG Expansions

Feedstock supplying the nine operational export terminals for U.S.-sourced liquefied natural gas (LNG) is subdued, with a five-day average of around 17 Bcf/d coming in below late 2025 levels of just over 19 Bcf/d.

Midstream company Kinder Morgan said in its quarterly report from July that amid a period of tight supplies, driven by the war in the Middle East, demand for gas infrastructure was on the rise.

More infrastructure may be necessary just to keep up with expansions planned along the U.S. Gulf Coast.

Cheniere Ready for More

In its earnings report for the second quarter, Jack Fusco, the head of Cheniere Energy, said Thursday that new trains were completed for additions to the Corpus Christi LNG facility, and advances were made in reaching a final investment decision (FID) on expansion to the Sabine Pass facility.

Sabine Pass is the largest LNG export facility by volume, requiring around 4.5 Bcf/d in feed gas to meet its peak operational capacity. Corpus Christi, meanwhile, has taken on around 2.5 Bcf/d so far this week, about 60% of its peak.

Cheniere, meanwhile, saw its net income surge by 89% from first quarter levels to reach $3.1 billion. Like their oil counterparts, natural gas companies are posting an income surge because of the supply-side shortages that are supporting commodity prices.

War in the Middle East has thrown a spanner in the gears of the global LNG sector. On Thursday, Iranian broadcaster Press TV reported that negotiations with fellow littoral state Oman are "moving forward" on opening the Strait of Hormuz, which hosts about 20% of the global maritime trade in crude oil and LNG.

By the Numbers

• 17 Bcf/d average for U.S. LNG feedstock below end-of-year highs
• 0.42 billion cubic feet drop in gas production from Wednesday, largely because of maintenance

Key Takeaways

• Maintenance is keeping U.S. LNG activity below recent peaks.
• Some heavy lifting may be needed to keep up with planned expansions, however.

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About Industrial Info Resources
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, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).