Lower 48 gas storage

Published at 19:10 13 Aug 2019 by . Last edited 11:18 22 Aug 2019.

Thursday’s EIA report (week ended 9 Aug) – EA Final Estimate: +59 bcf

  • We forecast Thursday’s EIA report will show an injection of 59 bcf. Total demand declined by 0.3 bcf/d, led by a drop in LNG flows of 1.7 bcf/d w/w. Cheniere confirmed Trains 3 and 4 at Sabine Pass were offline for maintenance, while Corpus Christi T2 also stopped receiving flows on 3 August, likely for final testing before commercial start-up. Power burn offset part of the drop, growing by 1.3 bcf/d w/w on the strength of gas generation in PJM, which benefitted from strong coal-to-gas switching to record the region’s third-highest gas burn day ever on 5 August at 50.9 GW. On the supply side, total Lower 48 production grew by 0.8 bcf/d w/w, in large part due to 0.3 bcf/d in w/w uplift from the Rockies and the Gulf.

Next Thursday’s report (week ending 16 Aug) – EA Estimate: +67 bcf

  • We forecast that the current week will send 67 bcf into storage, as a decline in total demand of 1.2 bcf/d w/w will lead to a rising w/w injection rate. Power burn is forecast to drop by 1.4 bcf/d w/w as national population-weighted CDDs decline by 5% w/w. The drop is particularly acute in the Northeast and Midwest, where temperatures in line with historical averages have washed away last week’s heat from Chicago to New York.
  • The South Central is experiencing significant heat this week that will cut its weekly injection by 3 bcf w/w to 4 bcf, as temperatures above 100°F in Houston and Dallas force deeper withdrawals from the region’s ultra-flexible salt storage. The searing southern heat and gas prices at a discount to coal will likely push power generation to an all-time high in the current week in ERCOT.
  • Production is on track for w/w growth of 0.2 bcf/d, the smallest weekly gain since early July. Output in the Rockies is up by another 0.1 bcf/d w/w to 7.4 bcf/d, while Gulf of Mexico receipts are also on pace to grow by 0.1 bcf/d w/w and hit a three-month high of 3.1 bcf/d.
  • We forecast total supply will be flat w/w despite the production gains, as net imports from Canada are on pace to decline by 0.2 bcf/d w/w. Net imports via the Waddington border point in upstate New York are set to average just 0.1 bcf/d (-0.2 bcf/d w/w) after flipping to net exports on 10–11 August amid mild Northeast US temperatures. An outage at the 0.4 bcf/d capacity McMahon gas processing plant, which was originally scheduled from 30 July–7 August but has been extended through 13 August, will keep inflows from Canada depressed in the western US.
  • We project LNG feedgas demand will grow by 0.2 bcf/d w/w. While both Sabine trains remain offline and flows have yet to restart to Corpus Christi T2, an increase in receipts at Cameron and Freeport—as the latter prepares to load its first cargo next week—will cause the w/w jump.
Fig 1: Regional flows and fundamentals model, bcf
Source: Energy Aspects
Fig 2: Balance forecasts, bcf/d
Source: Energy Aspects

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