Friday, June 14, 2024

LNG project approvals set to push U.S. to process record volumes

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U.S. liquefied natural gas developers are on track to win approval of three new export projects capable of processing 5.1B cf/day of gas in this year’s first half, a record volume for new LNG projects in any year.

The new developments put the U.S. on track to export 12.1B cf/day this year and 12.7B cf/day next year, which would push the U.S. even further ahead in its role as the world’s largest LNG producer and exporter.

“We expect global LNG demand to grow from 399M tons in 2022 to 627M tons by 2035, more than a 50% increase,” said Michael Stoppard, the head of global gas strategy at S&P Global Commodity Insights, told Reuters.

U.S. exporter Venture Global is set to become Germany’s largest LNG supplier, after signing a 20-year agreement to supply 2.25M metric tons/year from CP2 LNG, the company’s third LNG export project, now under development in Louisiana.

ETFs: (NYSEARCA:UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)

U.S. natural gas futures jumped nearly 5% Friday to its highest in nearly four months following a decline in U.S. production in recent weeks and forecasts for continued hot weather through early July.

Texas power grid operator ERCOT again forecast electric use will break records, during June 26-27.

Texas gets most of its electricity from gas-fired plants: In 2022, 49% of the state’s power came from gas-fired plants, with the rest coming from wind (22%), coal (16%), nuclear (8%) and solar (4%).

Front-month Nymex natural gas futures (NG1:COM) closed +4.6% Friday to settle at $2.729/MMBtu, the highest settlement since March 3; for the week, the contract gained 3.7%, its third straight weekly increase.

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