Gotta Get Over – The Race to Debottleneck U.S. LNG Feedgas Routes

 

RBN Energy – Daily Blog

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LNG exports will be the biggest driver of demand growth for the Lower 48 natural gas market over the next five years. After a year of oversupply in 2023, export capacity additions will help to balance the market and support gas prices in 2024 as the glut spills over into next year. Beyond 2024, higher export volumes will lead to tighter balances and price spikes. As supply struggles to keep up with new export capacity, the timing of pipeline expansions will be critical for balancing the market. The bulk of new LNG export projects are sited along a small stretch of the Texas-Louisiana coastline and more pipeline capacity will be needed to move incremental feedgas into this area and across the “last mile” to the facilities. In today’s RBN blog, “Gotta Get Over – The Race to Debottleneck U.S. LNG Feedgas Routes,” Sheetal Nasta begins a series delving into the planned pipeline expansions lining up to serve LNG demand along the Gulf Coast.

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The logistics of all of this is fascinating to me, and the complexity is compounded by the fact that most of these projects are owned by different companies, but are completely interconnected.  Exciting times.

It seems almost crazy that more capacity is needed.  There is a maze of existing natural gas pipelines in that part of the world.  I'll try to post a map when I run across a good one.  The requirement to up the plumbing really emphasizes how much volume is required to supply future LNG export.

Yes Steve, as a mineral owner, these are for sure very exciting times...God is so good!

Yes, it is exciting times with the prospect of LNG exports dramatically increasing starting in 2024/2025. Barring a sudden end to the Ukraine conflict and Russia NG resuming substantial exports to the West (highly unlikely), this should bode well for us royalty owners. It may be a painful 2023 based on the current collapse of NG prices but I'm hoping 2024 provides some price increases reflecting this increased export capacity. Looking at forward futures prices through 2025, traders don't seem to be pricing in this optimism. Future prices, as we all know can be volatile and reprice quickly, but I would have thought the futures curve would be steeper than it is now. Let's hope Wall Street NG traders have it wrong!

I agree.  And I don't pay any attention to the future prices, only to the monthly settlement price.

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