Seasonal Maintenance Drags U.S. Natural Gas Production Lower

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--A lull in seasonal demand in the U.S. market offers pipeline operators time for regular maintenance, curbing the amount of throughput and production as a result, IIR Energy data from Monday showed.

IIR Energy on Monday reported in its regular natural gas report that output in the Lower 48 states was about 105 billion cubic feet (Bcf), down about 1.4 Bcf from the daily average in September.

"U.S. natural gas production remains depressed this month, as operators take advantage of lower seasonal demand to conduct pipeline maintenance ahead of the winter season," the report read.

Networks run by Tennessee Gas Pipeline (TGP) (Houston, Texas) and Equitrans Midstream Corporation (Pittsburgh, Pennsylvania) are among those undergoing maintenance.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can read detailed profiles for TGP and Equitrans.

By volume, much of the production decline is coming from states in the northeastern U.S., such as Ohio and Pennsylvania, which sit atop the Appalachian Basin. Combining the Marcellus and Utica basins into one category, the U.S. federal government estimates the Appalachian Basin should produce about 36.8 billion cubic feet per day (Bcf/d) of natural gas this year, accounting for about 30% of total inland output.

IIR data show much of the decline came from Pennsylvania and West Virginia, where Monday's combined output of 29.2 Bcf marked a 5% decline from the September average. On the domestic demand side, data attribute much of the decline to the power-generation sector, where milder temperatures reduced at-home use.

The U.S. Energy Information Administration (EIA), the data arm of the Department of Energy, reported last week that residential consumers more often were using electricity, rather than natural gas, to control the temperatures at home.

Natural gas was used to heat 47% of average homes last year, a 2% decline from 2010 levels, EIA data show. Elsewhere, in the face of a decline in production, exports are on the rise. The U.S. delivered about 6.8 Bcf of natural gas to Mexico on Monday, up from last month's average of 6.2 Bcf/d and year-ago levels closer to 6.1 Bcf/d, data show.

The amount of natural gas arriving at the various terminals for exports of liquefied natural gas (LNG) is down as well. Feed gas on Monday was about 16.5 Bcf, from previous highs closer to 17 Bcf during the weekend.

IIR Energy is examining potential issues at the Sabine Pass terminal, operated by Cheniere Energy (Houston). The facility can take in as much as 4.6 Bcf/d in feed gas, and went offline last week.

"The terminal is down 0.7 Bcf/d, suggesting a possible train outage," IIR's natural gas report from Monday read.

Subscribers can learn more about Sabine Pass in a detailed plant profile.

The U.S. is the world leader in LNG deliveries, and U.S. President Donald Trump wants more. The sector may be approaching a glut, though new consumers may be emerging. Various media reports on Monday noted that Exxon Mobil Corporation (Houston) is preparing to offer LNG as a fuel option for shippers before the end of the decade as part of a broad-based decarbonization effort.

Shippers are moving away from highly polluting fuel oil to alternatives like LNG as part of a U.N.-backed effort to clean up the industry. In the U.S., the Galveston LNG Bunker Port (GLBP) is in the planning stage, with permits in place for construction.

GLBP said LNG is finding a home in everything from Roll-on-Roll off, or RoRo, car carriers to container vessels and cruise ships. At Galveston, cruise ships typically make around 380 port calls each year.

Subscribers can learn more about GLBP in a detailed project report.

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) platform 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 more than 200,000 current and future projects worth $17.8 trillion (USD).