Specialist
Senior executive at Enverus
Agenda
- Drivers of recent price surge in North America natural gas
- Supply dynamics and production response to higher prices
- Demand outlook covering electric power, petrochemicals, industrial, residential and LNG (liquefied natural gas) export markets
- Facility and project pipeline, infrastructure bottlenecks and regulatory challenges
Questions
1.
What are the most important factors driving the US gas market higher of late? Commodity and inflation have been all the talk in the markets for a while. There’s been a lot of focus on European gas, but US natural gas prices have started to surge in the past couple of months.
2.
How large a problem are the storage position inventories you mentioned? Can we make it up? Now we’re in the injection season, where do you think we’re heading?
3.
What are your thoughts on the shape of the market’s forward curve? It seems today’s prices will sustain for a while and then drop back off. Do you think that’s an accurate reflection of what might happen?
4.
Are any government policies having an impact on the market balances today? I know it gets talked about a lot in oil, federal lands and so on, but is there anything that the government has done or can do to influence price supply-demand?
5.
How much has LNG [liquefied natural gas] grown to, of total demand? How has that influenced prices or balances that we’re seeing?
6.
Under what conditions would the LNG facilities not run, besides fog or maintenance? We’re looking at 14-14.5bcf per day, top-end, until Exxon’s Golden Pass facility. Is there a situation in Europe or Asia where prices or demand would come down? What makes US LNG out of the money?
7.
What are your thoughts on petrochemicals? We know the Gulf Coast has grown and the Shell ethylene cracker in Pennsylvania should come online. What have the demand trends been for that sector?
8.
How important has coal and fuel switching been? How much volume has moved on that? What are your expectations?
9.
What do you think the economic sensitivity of natural gas demand is likely to be, given all the puts and takes we’re seeing?
10.
Could you explain what capital discipline is? When did it start for the US natural gas producers?
11.
You mentioned SCOOP [South Central Oklahoma Oil Province] and STACK [Sooner Trend Anadarko Canadian Kingfisher] and the holy trinity of things happening there that lead to higher Alpine High activity levels. What are the most interesting areas of activity, in terms of rigs or frack crews that we should be on the lookout for? If drilling will pick up in response to the prices on the margin, where should we look?
12.
You mentioned the producers in Appalachia have been handcuffed until recently. What changed and how might MVP [Mountain Valley Pipeline] impact the dynamic?
13.
On the Permian, is there enough infrastructure to support growth – including the Alpine High? Is this where we could see some base blow-outs?
14.
What are you seeing on supply being impacted by logistics and crews, in terms of cycle times? You mentioned spud to sales and so on. I’ve heard the oil producers make a big deal about this, including Pioneer Natural Resources’ CEO, Scott Sheffield. Is that impacting gas? Are there specific areas where it’s more pronounced?
15.
Are there any particular areas where finding the sand is more difficult or is it the last-mile problem?
16.
Are there any other constraints on production that we should be aware of?
17.
Do you have any rough ideas how much we’re getting out of the second-tier areas today?
18.
Where would you estimate inventories will end up as we head into winter 2022?
19.
How much more spending or drilling activity do you think needs to happen to meet all the needs as prices rise?
20.
What are the 2-3 most important things we need to be monitoring in the space in the months ahead?
21.
The producers of natural gas in North America have a really tough decade-plus. The prices peaked in 2009 and they’ve been going sideways for a few years. Is it now reversed, so are things looking up? Has there been a structural change in the outlook?
