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  • Insight

    Pembina Pipeline acquires Jordan Cove LNG in Veresen deal: Q2 2017 North America LNG projects update

    • 04 May 2017

    We highlight the progress and any delays to proposed North American LNG projects.

    $1,050.00

    Summary

    What's included

    • Document

      Pre-FID US LNG Key takeaways from five new asset updates Q2 17.pdf

      PDF 1.34 MB

    • Document

      Q2 17 North America LNG FID Tracker.xls

      XLS 2.27 MB

    • Document

      Pembina Pipeline acquires Jordan Cove LNG in Veresen deal: Q2 2017 North America LNG projects update

      PDF 413.58 KB

    • Document

      Pembina Pipeline acquires Jordan Cove LNG in Veresen deal: Q2 2017 North America LNG projects update

      ZIP 2.05 MB

  • Commodity market report

    North America gas short-term outlook September 2017: Haynesville production weighs on 2018 prices

    • 22 September 2017

    A La Nina forecast buoys winter prices but in 2018 we've lowered our expectations due to production growth and decreased demand

    $1,350.00

    Summary

    Our thoughts are with those affected by hurricanes Harvey and Irma which struck the Gulf Coast and Florida coast respectively during the last month and with those affected by the recent earthquake in Mexico. With so much gas and power market infrastructure in these areas the effects were wide ranging; some have largely passed whereas others will be longer lasting : Exports to Mexico declined 0.7 1.0 bcfd around the storm in line with the significant shut down in Eagle Ford production. Flows have now returned to seasonal norms albeit lower than peak summer levels when gas fired generation needs were higher. Feedgas into Sabine Pass dropped by about 2 bcfd due to the storm as NGPL declared a force majeure and LNG tankers could not get to the terminal because of rough seas. Flows have returned to normal; any long term impact would come from plants under construction where schedules may have been affected but the implications are not year clear. Refining and petchem capacity was impacted significantly. In the immediate aftermath of Harvey about 25% of US refining capacity and 50% of US steam cracking capacity was offline both of which are bearish for industrial gas demand. Capacity has gradually returned to service since and sustained gas market impacts are likely to be modest. Weather in these key gas consuming regions was mild in the days around the hurricanes. Power loads were significantly reduced due to transmission outages and industrial capacity being offline. We estimate ERCOT and Florida loads will remain 7% below normal for the balance of the year with potential for this impact to extend into 2018. Overall the storm was bearish for gas prices as reduced demand more than offset interruptions in production. This demand weakness contributed to a growing storage surplus. After narrowing to just 8 bcf higher than the five year average in late August the surplus now stands at 67 bcf. Exceptionally mild weather continues in September Based on September weather to date and the current forecast our WoodMac index points to degree day totals around the seventh percentile for the month. Incredibly though September will be the sixth month out of the last twelve with degree day totals at the 10th percentile or lower (with another August narrowly missing). The trailing twelve month average of the WoodMac degree day index has never been lower. Of the last twelve months only July saw bullish weather and even then only around the 60th percentile. Meanwhile the supply demand balance which corrects for weather has averaged 2.6 bcfd tighter than normal over the last 12 months. Fundamentals kept pointing toward a major gas price rally as soon as weather trends were normal. But ultimately mild weather in 2017 masked underlying tightness. Last 12 months weather Supply demand balance Winter: emerging La Nina forecast Heading into winter early forecasts point to La Nina trends which means cold weather early in the winter but more mixed afterward. And winter futures prices have rallied recently in response to this weather news. We do see some upside to our $3/mmbtu price outlook for Q4 of this year if winter gets off to a cold start. But the mild September weather and the sustained weakness in electricity demand due to the hurricanes mean that the prospects for a major gas price rally later this year have dimmed significantly evident in a loosening supply demand balance. Production growth is accelerating in the Permian already and a strong increase in the Northeast is likely this winter as new pipeline capacity comes online. Rover flows have averaged more than 600 mmcfd so far this month supporting modest production growth in the Northeast even as regional demand and storage injections decline. Flows will increase through the winter as additional supply laterals are completed and compressor stations are added on the mainline. Northeast shut ins are likely next month as demand and storage injections decline further but by year end the Northeast is likely to be much less constrained. Watch for Northeast supply growth of 2.5 bcfd over the course of the winter. North of the border the National Energy Board approved the long term fixed price service on the TransCanada Mainline which will support exports and help stabilize AECO prices. WCSB production is expected to exit the year at 16.4 bcfd roughly 0.5 bcfd higher year over year but AECO basis is expected to tighten with better takeaway capacity. 2018: Haynesville power demand look bearish but how many more rigs will be dropped? We have reduced our 2018 price outlook by $0.05 0.10/mmbtu to an average of $2.85/mmbtu principally based on an upgraded outlook for Haynesville shale production up about 400 mmcfd relative to our prior outlook. Wells drilled in Q1 and Q2 of this year came online in Q2 and Q3 respectively with no production declines for multiple months. Recent well data reveals that operators have been constraining wells' initial production rates meaning that growth to date has been achieved even with these chokes. This approach improves EURs and returns. However on net the supply side risks remain bullish next year. In Canada major independent producers have revised down capital guidance especially in oil plays. Rich gas plays north of the border support production growth next year. And in the US the pace of supply growth in our outlook points to the potential for bottlenecks or delays whether in drilling completion or infrastructure. In this outlook weaker associated gas production largely offsets some of the upside in the Haynesville. US horizontal rig counts have declined in six of the last eight weeks and the total rig count has fallen from 810 to 795 rigs. Amid recent drilling declines and a widening Brent WTI differential we have reduced our rig forecast in oil weighted plays for the remainder of 2017 and 2018. We now see net additions of 10 rigs through the end of 2017 and a further 50 more in 2018. The Permian drilled but uncompleted (DUC) well count now stands above 2 000 in west Texas. On its earnings call Pioneer announced that it was lowering 2017 planned completions by 30 due to difficulties obtaining the necessary labour and equipment. It is likely the DUC count goes higher before it goes lower and it is likely that as long as the Permian rig count remains above 300 the DUC will remain above 2 000. It is starting to look like the sustainable level of working inventory for the basin. In the power sector prior hurricanes point to the potential for sustained load reductions with our initial estimates suggesting as much as 800 mmcfd of downside to our outlook for gas fired generation next year. Perhaps more importantly though will be the interaction between gas and coal demand and prices in 2018. As gas prices fall gas picks up demand in the power sector but these higher gas and lower coal demand levels in turn put pressure on coal stockpiles and effective coal dispatch prices. We are beginning to see potential for a race to the bottom in the power sector next year which could weaken our gas price outlook by another $0.10 0.20/mmbtu. Short term price outlook Wood Mackenzie ($/mmbtu) NYMEX Gas ($/mmbtu) NYMEX Oil ($/bbl) Oct 17 2.95 2.946 0 Nov 17 3 3.007 50.55 Dec 17 3.05 3.163 50.93 Source: Wood Mackenzie NYMEX Henry Hub price outlook US supply demand outlook (bcfd) Prod. Storage LNG imports Piped imp. Total Supply Res/ Com Ind. Power Other Total Demand Winter 2015 16 74.14 9.68 0.06 2.29 86.17 32.24 22.09 24.38 6.42 85.14 Summer 2016 72.31 7.00 0.38 1.82 66.74 10.83 20.05 30.11 5.88 66.88 Winter 2016 17 71.97 12.64 1.43 0.16 83.34 33.61 22.81 21.05 6.27 83.74 Nov 71.90 0.70 1.36 0.39 70.85 22.23 21.78 22.10 5.99 72.10 Dec 72.02 21.79 1.23 0.87 93.46 40.85 23.64 21.54 6.44 92.47 Jan 72.01 21.37 1.45 0.37 92.30 40.88 23.45 20.56 6.46 91.35 Feb 71.95 10.56 1.64 0.10 80.77 33.41 22.93 19.61 6.25 82.20 Mar 71.96 8.76 1.46 0.07 79.33 30.70 22.24 21.42 6.20 80.56 Summer 2017 73.90 8.32 1.96 0.81 62.82 11.06 20.40 26.42 6.04 63.91 Apr 72.23 7.26 1.90 0.68 62.38 16.48 20.76 20.40 5.78 63.42 May 72.60 10.83 1.88 0.41 59.47 12.14 20.06 22.40 5.71 60.31 Jun 73.23 9.25 1.71 0.61 61.66 8.72 20.26 27.73 5.86 62.57 Jul 73.42 4.32 1.96 0.70 66.44 8.08 20.25 33.91 6.27 68.52 Aug 74.34 6.38 1.59 0.39 65.99 7.87 20.54 31.15 6.20 65.76 Sep 75.54 12.47 1.73 0.85 60.49 8.87 20.41 26.17 6.17 61.62 Oct 75.95 7.69 2.93 2.02 63.30 15.24 20.50 23.18 6.27 65.19 Winter 2017 18 79.29 12.75 3.04 1.25 87.75 37.66 23.62 21.62 7.24 90.14 Nov 77.75 0.62 2.94 1.66 73.77 27.36 22.61 19.80 6.72 76.50 Dec 78.54 12.16 2.83 0.85 87.01 39.35 23.84 18.32 7.07 88.58 Jan 79.30 25.54 3.08 0.77 100.99 46.58 24.47 24.09 7.60 102.74 Feb 80.04 20.12 3.08 1.22 95.86 43.81 24.35 22.95 7.59 98.71 Mar 80.80 5.32 3.28 1.73 81.11 31.20 22.81 22.95 7.19 84.15 Summer 2018 83.85 9.06 3.63 3.37 67.80 11.52 21.02 31.39 6.93 70.86 Apr 81.62 6.66 3.36 2.55 69.06 19.04 21.90 24.06 6.86 71.86 May 82.35 12.47 3.46 3.34 63.08 12.04 20.95 26.23 6.68 65.89 Jun 83.15 10.76 3.46 3.40 65.53 9.18 20.63 31.80 6.84 68.46 Jul 83.89 9.49 3.52 2.92 67.97 8.15 20.74 35.56 6.96 71.42 Aug 84.67 6.18 3.55 3.70 71.23 7.96 20.97 37.78 7.02 73.74 Sep 85.36 9.42 3.91 3.82 68.21 9.05 20.94 34.66 7.04 71.69 Oct 85.92 8.42 4.13 3.86 69.51 15.24 21.04 29.63 7.07 72.99 Winter 2018 19 87.23 11.79 4.85 4.32 89.85 37.69 23.93 24.79 7.82 94.22 Source: Wood Mackenzie

    What's included

    • Document

      Basis Outlook.xls

      XLS 133.00 KB

    • Document

      Demand Detail.xls

      XLS 698.00 KB

    • Document

      Industrial Index.xls

      XLS 124.00 KB

    • Document

      LNG Detail incl Export.xls

      XLS 226.50 KB

    • Document

      NGL Price Outlook.xls

      XLS 117.50 KB

    • Document

      Northeast Takeaway Capacity.xls

      XLS 511.00 KB

    • Document

      Power Demand Curve.xls

      XLS 124.50 KB

    • Document

      Price Outlook.xls

      XLS 137.00 KB

    • Document

      Storage Outlook.xls

      XLS 155.50 KB

    • Document

      Supply Demand Balances.xls

      XLS 313.00 KB

    • Document

      Supply Detail.xls

      XLS 289.00 KB

    • Document

      North America gas short-term outlook September 2017: Haynesville production weighs on 2018 prices

      PDF 483.07 KB

    • Document

      North America gas short-term outlook September 2017: Haynesville production weighs on 2018 prices

      ZIP 1.96 MB

  • Company report

    BP oil and gas exploration summary

    • 25 August 2017

    BP has focused its exploration strategy back towards deepwater and conventional sectors, as well as pivoting towards gas-value chains.

    $2,450.00

    Summary

    Basins drilled and all conventional & organic unconventional discoveries 2007 2016 Map shows all conventional and unconventional discoveries. It excludes all unsuccessful unconventional exploration and all activity associated with assets not included within this report. Ten year performance summary Reported exploration costs incurred 1 (US$ Billion) 28.1 Conventional new field resources added 2 (billion boe) 4.1 Conventional new field resource discovery costs 3 (US$/boe) 3.30 Proportion 4 of new field resources classified as Commercial and Good Technical 52% Organic unconventional reserves added 2 (billion boe) 2.5 Overall discovery costs 5 (US$/boe) 2.41 Peak forecast production contribution ('000 boe/day & year) 719 (2027) Full cycle IRR for the period (Base price) 6% 1. Nominal terms. Includes legacy exploration spend which is excluded from value creation calculation. 2. Net working interest resources added. 3. Conventional exploration spend divided by net conventional new field resources added. 4. Comm & Good Technical resource still help by company divided by net conventional new field resources added. 5. Conventional and unconventional exploration spend divided by net resources added. Source: Wood Mackenzie

    What's included

    • Document

      BP.xls

      XLS 641.50 KB

    • Document

      BP oil and gas exploration summary

      PDF 562.13 KB

    • Document

      BP oil and gas exploration summary

      ZIP 770.09 KB

  • Insight

    The new balance: long term implications of Asia gas and LNG

    • 17 July 2017

    The rebalancing of LNG market will be driven by strong growth in Asia gas demand, especially in China.

    $1,050.00

    Summary

    What's included

    • Document

      The new balance - long term implications for Asian gas and LNG.pdf

      PDF 1.99 MB

    • Document

      The new balance: long term implications of Asia gas and LNG

      PDF 247.84 KB

    • Document

      The new balance: long term implications of Asia gas and LNG

      ZIP 2.03 MB