Waha spot gas prices negative for a second day
Natural gas prices at the Waha hub in west Texas were negative for a second consecutive day today, as milder weather, higher production and pipeline maintenance squeezed gas flows from the Permian basin.
The Waha index — a main indicator of the value of gas supplies in the Permian — remained at -57¢/mmBtu for a second day, down from 54¢/mmBtu on 24 October and well below the 30-day high of $5.03/mmBtu on 18 October.
The index last turned negative on 23 October 2020, at -92¢/mmBtu, at a time when pipeline takeaway capacity from the region was still struggling to catch up with growing oil and gas production.
The majority of Permian gas production is in the form of associated gas, meaning gas volumes rise and fall with crude production. Crude production from the prolific basin has hit record highs this year, topping 5.4mn b/d in October, according to the Energy Information Administration (EIA), while gas production is estimated at 20.9mn cf/d.
Gas flows from the Permian have been under pressure since August 2021, when El Paso Natural Gas' line 2000 ruptured in Arizona, limiting gas flows from the Permian to the southwest for more than a year. The line 2000 work led Kinder Morgan to shut in that portion of its systemall the way back to the Permian, tightening operational boundaries and pushing flows on other westbound pipelines closer to their maximum capacities.
But planned repairs on Kinder Morgan's 2.1 Bcf/d (59mn m³) Gulf Coast Express (GCX) pipeline that started this week appear to have been the tipping point for the negative prices. Flows on GCX were cut by 38pc to 1.3 Bcf/d (37mn m³/d) yesterday and today, and will be reduced to 1.1 Bcf/d tomorrow through 28 October.
Supplies from the Permian also lost an outlet this year following the shutdown of the 2 Bcf/d (57mn m³/d) Freeport LNG export facility south of Houston, Texas, in June because of an accident, leaving more Permian gas available to US markets. Much of that supply was absorbed as hotter-than-normal weather stoked demand from the power sector, but that dwindled as temperatures fell closer to seasonal norms in recent weeks. Freeport expects the terminal to have a partial restart of mid-November.
The constraints have forced Permian producers to sell gas at wider discounts to the US benchmark, the Henry Hub. Prices at the Waha hub averaged a $3.06/mmBtu discount to Henry at the start of this month, narrowing to an 88¢/mmBtu discount on 18 October. Waha was at a $4.27/mmBtu discount to Henry on 24 October before the former turned negative, forcing sellers to pay buyers to move the gas.
Winter prices for the Waha hub have fallen, but remain in positive territory. The Waha price was $3.16/mmBtu for November and $4.56/mmBtu for December as of yesterday, according to Argus forward curves data. Those were down by 18pc and 12pc respectively from the start of this month.
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Beryl aims between Corpus Christi, Houston
Beryl aims between Corpus Christi, Houston
Houston, 7 July (Argus) — Tropical storm Beryl was expected to regain hurricane strength today before coming ashore between Corpus Christi and Houston, Texas, early Monday. As of 11am ET today the center of the storm was about 195 miles southeast of the refining and oil export hub of Corpus Christi with maximum sustained winds of 65mph. Moving northwest at 10mph, its landfall was expected at about 2am ET Monday, according to the National Hurricane Center (NHC). The track of the storm's landfall has moved toward the east for the past two days, moving Corpus Christi out of the area likely to see the highest winds and storm surge. The most powerful winds and storm surge should be centered on areas near Matagorda Bay, according to the forecast, with 4-6ft of storm surge expected. Galveston Bay, which include numerous refineries and petroleum export terminals along the Houston Ship Channel and Texas City, was expected to see 3-5ft of storm surge. The port of Corpus Christi was closed to all traffic as of Saturday afternoon while the ports of Houston, Galveston, Freeport and Texas City were set to "Yankee" status at 8am ET today, suspending all inbound traffic, bunkering and lightering operations. The Houston-area ports were expected to close to all traffic later today as the storm nears landfall, according to the US Coast Guard. Disruptions to US Gulf oil and gas operations so far appear to be limited given Beryl's approach to the west of most US offshore and gas operations. Mexican offshore operations were halted late last week when the storm first entered the Gulf after passing over the Yucatan peninsula. Early last week Beryl was a Category 5 storm, which made it the strongest on record for the month of July, as it left a trail of destruction in the Caribbean. The second named storm of the 2024 Atlantic hurricane season, Beryl followed tropical storm Alberto, which came ashore in northeastern Mexico late last month. This year's Atlantic hurricane season is expected to be more active than normal, according to the US National Oceanic and Atmospheric Administration, with 4-7 major hurricanes that pack sustained winds of 111mph or higher possible. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Beryl enters GOM, heading towards Texas: Update
Beryl enters GOM, heading towards Texas: Update
Updates hurricane watch and status of Texas ports and lightering zones. New York, 5 July (Argus) — Hurricane Beryl weakened to a tropical storm as it crossed the Yucatan Peninsula and entered the Gulf of Mexico on Friday afternoon, with a likely second landfall in Texas on Monday. Maximum sustained winds have dropped to near 65mph, the National Hurricane Center said in a 5pm ET advisory, but the tropical storm is forecast to strengthen to a hurricane again as it moves over the Gulf of Mexico, with forecasts pointing to a landfall late Sunday or early Monday from far northeastern Mexico to the eastern Texas coast. The National Hurricane Center issued a hurricane watch from the mouth of the Rio Grande River to Sargent, Texas, about 80 miles southwest of Houston. Heavy rainfall of 4-8 inches is expected by Sunday into next week. The US Coast Guard changed the status of the port of Corpus Christi, Texas — a key US oil export hub — to "X-ray" at 3pm ET Friday, meaning gale force winds are expected to arrive at the port within 48 hours. All commercial traffic and transfer operations can continue during X-ray, but the Coast Guard said ocean-going commercial vessels greater than 500 gross tons should make plans to depart the port. Corpus Christi is also home to three refineries totaling 800,000 b/d of capacity. Citgo said it is implementing its hurricane preparedness plan at its 165,000 b/d refinery there. The ports of Houston, Texas City, Galveston and Freeport were set to port condition Whiskey at 5:05pm ET Friday, meaning gale force winds are expected to arrive within 72 hours. The ports remain open to all commercial traffic. Ship-to-ship transfers off the Texas coast proceeded as normal on Friday but will be postponed off Corpus Christi beginning Sunday. The US National Weather Service (NWS) forecast winds up to 90mph and waves up to 32 ft at the Corpus Christi lightering area on Sunday and Monday before calmer conditions return Tuesday. Ship-to-ship transfers are expected to be postponed at the Galveston Offshore Lightering Area early next week due to the same conditions. Most of Mexico's Gulf coast ports were closed today and many offshore oil production operations. The impact to US Gulf oil and gas operations so far appears to be limited, with BP determining forecasts "indicate Hurricane Beryl no longer poses a significant threat" to its offshore platforms in the Gulf of Mexico. Shell had taken the precaution of shutting in production and evacuating all staff from its Perdido platform and its Whale development, which is scheduled to begin operations later this year. "We have safely paused some of our drilling operations, but there are currently no other impacts on our production across the Gulf of Mexico," the company said late on Thursday. Earlier this week, Beryl was a Category 5 storm, which made it the strongest on record for the month of July, as it left a trail of destruction in the Caribbean. By Stephen Cunningham, Tray Swanson and Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
New UK government to bolster climate goals
New UK government to bolster climate goals
Despite some clear shifts in energy policy, Labour's manifesto does not suggest radical change in the near term, write Georgia Gratton and James Keates London, 5 July (Argus) — The UK's new government wants the country to revive its climate leadership role, and is set to toughen investment conditions for North Sea oil and gas. The UK's centre-left Labour Party has swept to power for the first time in 14 years after securing a landslide victory in the country's 4 July general election, consigning the ruling Conservative Party to the worst defeat in its history. Keir Starmer has replaced Rishi Sunak to become the UK's fourth prime minister in the space of just two years and Labour's first since Gordon Brown in 2007-10. Labour has so far won 412 of the 650 parliamentary seats, giving it the biggest majority in parliament since Tony Blair's Labour government in 1997. The result indicates a clear shift to the centre-left in the UK's lower parliament, the House of Commons. The centre-left Liberal Democrats won 71 seats, up from just 11 in 2019. And the left-wing Green Party secured four seats — quadrupling the one it had held previously. But the UK's first-past-the-post political system masked the significant fracturing of support in favour of smaller parties outside the two main players. Labour won its huge majority on only around a third of all votes, at around 9.7mn, while the Conservatives achieved approximately 6.8mn votes. The Greens picked up just under 2mn votes, and the right-wing Reform UK party won some 4mn votes but just five seats. "Change begins now," Starmer said after his party's emphatic victory was confirmed. But while there will be some clear shifts in policy, Labour's election manifesto does not suggest radical change in the near term. The new government will maintain the UK's staunch support for Ukraine in its war with Russia and has pledged to stay outside the EU. It wants to reset the relationship with the EU by "tearing down unnecessary barriers to trade", but that may be ambitious given Starmer has promised "no return to the single market, the customs union or freedom of movement". Labour is more focused on addressing climate change than Sunak's outgoing government, although some of the former's energy policies bear a striking resemblance to those of Boris Johnson's premiership in 2019-22. It has pledged a zero-carbon power grid by 2030 and has set ambitious targets to "double onshore wind, triple solar power and quadruple offshore wind by 2030". Offshore pressures Starmer plans to keep the oil and gas windfall tax introduced by the Conservatives in 2022, and has pledged to raise it to an effective rate of 78pc from 75pc. Labour has no plans to revoke existing North Sea oil and gas licences but intends not to issue any new ones — or new coal licences — and it aims to permanently ban fracking. "Such measures would not create the investment conditions the UK needsto deliver the homegrown energy transition," industry group Offshore Energies UK says. Renewable energy associations have welcomed the new government's plans. Labour also says it will restore 2030 as the phase-out date for the sale of new gasoline and diesel-fuelled cars, after Sunak's government pushed it back to 2035. And it plans to set up a national wealth fund to support the country's energy transition, using public funding to pull in private investment. The party also intends to create a new publicly-owned company, Great British Energy, funded with £8.3bn ($10.6bn) over the next parliament, "to deliver clean power". The UK's election result is placed in sharper focus as some European and fellow G7 countries signal a shift to the right. Many consider a pushback on some net zero policy since Johnson's departure has eroded the UK's role as a leader on climate action. But Labour has been clear that international climate leadership and multilateralism will be priorities as it tries to reposition the UK on the world stage. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Caribbean power faces long recovery from Beryl
Caribbean power faces long recovery from Beryl
Kingston, 5 July (Argus) — Power utilities in several eastern and central Caribbean countries have started repairing networks that were brought down this week by Hurricane Beryl. Beryl — the Atlantic's first hurricane this season — hit several islands with winds of up to 225 km (140 miles)/h, and also damaged roads, bridges and ports and telecommunications infrastructure. Many parts of Jamaica, Grenada and St Lucia remain without power, with one utility company forecasting "a long and difficult period of continuing darkness" in these countries. Jamaican power utility JPS said yesterday 60pc of its clients — just under a half a million households — were without electricity. "Our teams are doing damage assessment, and will complete the necessary repairs to restore power as quickly and as safely as possible," the company said. Beryl entered the Caribbean earlier in the week, leaving extensive damage in St Vincent and the Grenadines and in Dominica. St Vincent and the Grenadines will be without power for the next fortnight, chief executive of its power utility Vinlec Vaughn Lewis said. "We have significant damage … and we will be working to get power to facilities such as gas stations and supermarkets." Granada's ward island Cariacou is in an "Armageddon-like condition," prime minister Dickon Mitchell said. "The electricity and communication systems are wiped out." Winds from Beryl hit the southern coast of the Dominican Republic on 3 July, causing blackouts from a deficit of 900MW, according to distributor Edesur. Winds affected major natural gas-fired power plant AES Andres, reducing its regasification capacity for LNG and its fuel supplies to other natural gas plants, the government said. Beryl left several thousand people without power in the Cayman Islands yesterday as it left Jamaica and headed for Mexico. The Caribbean is likely to be hit by more strong hurricanes by the end of the season in November, a spokesman for Jamaica's weather office told Argus . "We have been promised a very active season with many and strong storms." The US federal weather agency NOAA forecast that there is an 85pc chance that this year's Atlantic hurricane season will be "above normal." The Atlantic season's first hurricane "sets an alarming precedent for what is expected to be a very active hurricane season," the World Meteorological Organization said. By Canute James Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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