Infrastructure – Venture Global has started producing LNG at the Plaquemines project, crossing a major LNG milestone and kicking off a period of long-awaited demand growth.
Pipeline deliveries to Plaquemines LNG have averaged over ~250 MMcf/d this week. First LNG production likely occurred over the weekend (December 14-15), when feedgas crossed 100 MMcf/d for the first time to the facility in Port Sulphur, LA.
Comparing the startup of Plaquemines to Calcasieu Pass, we see an equivalent time to start LNG production from the point when each facility started taking consistent volumes (~20 MMcf/d) to supply power trains. This is likely due to FERC’s approval timelines rather than any constraints on Venture Global’s end. However, East Daley expects Plaquemines to ramp at a faster pace than Calcasieu Pass, as the company imported cargoes in August to facilitate the cooldown of the facility.
Cooldown cargoes are used to chill LNG tanks prior to liquefaction, allowing initial LNG production to be stored without excessive initial boiloff. Without a cooldown cargo, LNG tanks must be cooled using gas liquefied at the facility. This is a significantly slower process because the initial volume of produced LNG is far smaller than what can be immediately transferred into the tanks from a cargo. Venture Global did not use a cooldown cargo for its first LNG facility, Calcasieu Pass.
Currently, Venture Global’s own LNG carrier, Venture Bayou, is docked at the facility, indicating that cooldown is mostly complete and preparations are underway for first exports. We estimate that each of Plaquemines’ 36 liquefaction trains has a feedgas capacity of ~90 MMcf/d (including the gas required to power the liquefaction process).
East Daley forecasts demand from Plaquemines LNG in the Macro Supply & Demand Report and Southeast Gulf S&D Report. If we assume that Plaquemines LNG can ramp 30% faster using imported cargoes for cooldown, we should expect to see the facility take 1 Bcf/d as early as February 2025 and the full 2 Bcf/d by June.
Infrastructure – Gas Transmission Northwest (GTN) received approval from regulators to start full service on the 150 MMcf/d GTN XPress expansion, opening more markets for Canadian gas in the Pacific Northwest.
Last Thursday (December 12), the Federal Energy Regulatory Commission (FERC) gave approval for GTN to start the remaining 100 MMcf/d of the XPress expansion. GTN received authorization in July to place the project’s initial 50 MMcf/d into service.
East Daley tracks the GTN expansion in the West Coast Supply & Demand Report. The XPress project includes upgrades to three compressors in Idaho, Washington and Oregon, and is backed by long-term contracts with shippers Intermountain Gas, Tourmaline Oil, and Cascade Natural Gas.
The XPress expansion will allow GTN to import more supply from Western Canada. We expect these volumes will displace flows from Williams’s (WMB’s) Northwest Pipeline (NWPL) in the winter months, when price spreads between AECO and the western Rockies typically favor Canadian volumes.
In the days following the FERC authorization, volumes heading northwestward on NWPL dropped over 120 MMcf/d while GTN set new records for volumes entering the US at its Kingsgate meter. The gains were not reflected at GTN’s Station 14 terminus at Malin, as the additional volumes were used along the pipeline route. See East Daley’s West Coast Supply & Demand Report for more information.
Storage – Following a jumbo-sized 190 Bcf withdrawal in last week’s report, traders and analysts expect the Energy Information Administration (EIA) to report a smaller 125 Bcf draw for the week ending December 13.
A 125 Bcf withdrawal would be 33 Bcf more than the 5-year average and narrow the surplus to 135 Bcf, the lowest level since the week ending January 26, 2024. The deficit to last year would fall by 47 Bcf to just 20 Bcf.
With the sixth-warmest November on record, the 2024-25 winter so far closely resembles the last heating season. Storage in early December ‘23 stood at 3,664 Bcf for the week ending December 8, and the first full week of December 2024 (week ending December 13) is estimated at 3,662 Bcf.
After the first week of December, operators in 2023 withdrew just 1,398 Bcf the rest of the heating season. In the latest Macro Supply & Demand Report, East Daley calls for the Lower 48 to withdraw 1,741 Bcf, or 343 Bcf more through the end of the winter (March 31). Should the 2024-25 heating season revert to last year’s exceptionally warm temperatures, a growing surplus would rear its ugly head yet again, growing to ~678 Bcf. The graph shows this comparison, barring any change in production in response to lower prices. Consider the numbers as guard rails should a continuation of warmer weather persist through the end of March.
Rigs – The US rig count increased by 3 for the December 7 week to 572. The Anadarko (+2) and Permian (+1) basins gained rigs
On the midstream side, Targa Resources (TRGP) is up 2 rigs net with gains on its Lucid system in the Delaware Basin. Western Midstream (WES) lost 2 rigs on its Eagle Ford and Permian systems.
East Daley’s weekly Midstream Activity Tracker monitors rig activity by basin and by gathering and processing (G&P) system to better understand midstream impacts. We allocate rigs and monitor flows through 150+ public and privately owned G&P systems in every North American basin. Reach out for more information on the Midstream Activity Tracker.