Daily Market Report – Nov 16, 2022

LNG feedgas levels are starting to ramp up with Sabine Pass consistently receiving over 4.8 Bcf/d for the past three days. There is still room for higher receipts at the terminal. We were anticipating overall feedgas levels to reach 15 Bcf/d by the end of this month with the return of Freeport, but the likeliness of its return by the end of the year is fading quickly. Yesterday we received a press release from the facility at 4:56pm titled “Freeport LNG Provides Summary of Root Cause Failure Analysis Report on June 8 Incident”, but there was no real indication on the timeline of the return. The report which identifies the root cause of the incident was prepared by a third-party for the Freeport owners. After reading through the PR, the net summary is that the issue could have been avoided and its happened partly due to human error.

There is no mention of working with the PHMSA or FERC; hence we believe a Q1 start up is more likely at this point.

[the full PR is attached]

With all this going on, Freeport continues to be unclear with the trading community and its customers. There are currently two tankers targeting arrival at the facility later this month. With tanker rates at $300-400k/day and delaying in moving LNG is quite costly.

Today’s Fundamentals

Daily US natural gas production is estimated to be  100.3 Bcf/d this morning. Today’s estimated production is -0.56 Bcf/d to yesterday, and -0.77 Bcf/d to the 7D average.

Natural gas consumption is modelled to be 101.8 Bcf today,  -1.54 Bcf/d to yesterday, and +9.39 Bcf/d to the 7D average. US power burns are expected to be 33 Bcf today, and US ResComm usage is expected to be 36.9 Bcf.

Net LNG deliveries are expected to be 12.5 Bcf today.

Mexican exports are expected to be 6.4 Bcf today, and net Canadian imports are expected to be 6.6 Bcf today. Imports from Canada should stay elevated through the weekend with cool temps across the Midwest.

For week ending Nov 11^th, the S/D storage is pointing to a +67 Bcf, while our flow model is much lower at +61 Bcf injection.  Last year we injected +23 Bcf during the same week.
Our final estimate is an average of the two model = +64 Bcf

This is the results of our flow model estimate:

Below is the storage activity at the facilities that report at the weekly level:

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