NEW LNG Midstream Study

GETTING TO THE GULF
Can We Supply Wave 2 LNG?

As the US natural gas market eagerly awaits demand from the more than 35 Bcf/d of proposed new LNG export facilities, BTU Analytics took a step back to see how, or in some cases if, the industry can actually supply Gulf Coast Wave 2 LNG exports in this 85-page, Getting to the Gulf study.

A sample of the Key Takeaways includes:

  • With current gas pipeline infrastructure, the Marcellus and Rockies cannot meaningfully supply Wave 2 LNG
  • Wave 2 facilities could significantly increase the price of Henry Hub, threatening gas demand including LNG export economics
  • Assuming a moderately bullish LNG export scenario necessitates building greenfield infrastructure
  • Near Gulf Coast sources of supply, including the Haynesville, Barnett, and Dry Eagle Ford stand to benefit most from Wave 2.
  • Going forward, Gulf Coast consumers will have to reach further back into supply areas for gas
  • Wave 2 facilities are expected to have higher costs associated with aggregating new supply or less consistent utilization as compared to current utilization of Wave 1 facilities.

This 85-page study includes a look into current gulf coast and LNG market dynamics, BTU’s ranking of Tier A, Tier B and Unlikely LNG export projects along with criteria that led us to each, analysis on options to supply Wave 2 LNG including necessary midstream to connect producing basins, cost projections to build greenfield pipeline, and analysis outlining the most advantaged and disadvantaged basins and proposed LNG export projects.

Author: Mason Ender

Mason Ender is a partner at BTU Analytics, LLC and managing director of business development overseeing client relations, marketing, and sales. Prior to joining BTU Analytics, he was the Manager of Sales for Bentek Energy, a division of Platts. Mason has worked with energy companies both domestically and internationally to implement effective fundamental energy analytic solutions. Mason also routinely presents energy market dynamics informing the market of upcoming risks and opportunities.