Natural Gas Marketers Finish in Positive Territory with Gains in NGI’s 2018, 4Q Surveys

There was plenty of good news from most of the 24 leading natural gas marketers participating in NGI's Top North American Natural Gas Marketers rankings, which reported a 5% increase in their total sales volumes in 4Q2018 compared with 4Q2017, capping off a year in which they posted a combined 6% increase compared with 2017.

Participating gas marketers reported combined sales transactions of 121.12 Bcf/d in 4Q2018, a 5.33 Bcf/d increase compared with 115.79 Bcf/d in 4Q2017. 

It was the fifth consecutive NGI quarterly survey in which marketers have reported year-over-year increases, following a 7% increase in sales of natural gas in 3Q2018 compared with 3Q2017, a 9% increase in 2Q2018 compared with 2Q2017, an 8% increase in 1Q2018 compared with 1Q2017, and a 7% increase in 4Q2017 compared with 4Q2016.

That series of surges pushed the full-year 2018 total to 118.11 Bcf/d, a 6.16 Bcf/d increase compared with 111.95 Bcf/d in 2017.

Eight of the survey's Top-10 marketers and 16 companies overall reported higher numbers in 4Q2018 than in the year-ago period. BP plc strengthened its hold on the No. 1 spot, reporting 22.33 Bcf/d, a 5% increase compared with 21.18 Bcf/d in 4Q2017.

The London-based supermajor's Lower 48 division, BPX Energy, reported total hydrocarbons in 4Q2018 of 447,000 boe/d, versus 321,000 boe/d sequentially and 319,000 boe/d in the year-ago period. BP's U.S. onshore gas production in the final three months increased to 2,053 MMcf/d, versus 1,614 MMcf/d sequentially and 1,574 MMcf/d in 4Q2017.

At No. 2, Macquarie Energy, which had seen four consecutive upward quarters, reported 12.57 Bcf/d in 4Q2018, compared with 13.15 Bcf/d in 4Q2017.

Tenaska reported an 8% increase, with 10.60 Bcf/d in 4Q2018, compared with 9.80 Bcf/d in 4Q2017. Tenaska recently announced that its natural gas marketing affiliate, Tenaska Marketing Ventures (TMV), plans to open a regional office in Houston in 2Q2019. TMV is based in Omaha and also has offices in Boston, Dallas, Denver, Calgary and Vancouver.

No. 4 Shell Energy NA reported a mild decline, falling to 9.90 Bcf/d from the 10.00 Bcf/d in the year-ago period.

At No. 5, ConocoPhillips reported 8.44 Bcf/d in 4Q2018, a 2% increase compared with 8.25 Bcf/d in 4Q2017. The Houston-based super independent said recently that it expects full-year production, excluding Libya, to be 1.3-1.35 million boe/d in 2019, with 1Q2019 production expected at 1.29-1.33 million boe/d.

The other Top-10 companies in NGI's survey all reported increases: Sequent Energy Management (6.70 Bcf/d, up 5% from 6.40 Bcf/d); J. Aron & Co. (6.35 Bcf/d, up 18% from 5.40 Bcf/d); Direct Energy (6.12 Bcf/d, up 9% from 5.63 Bcf/d); EDF Trading NA (5.06 Bcf/d, up 12% from 4.53 Bcf/d); and CenterPoint Energy (4.01 Bcf/d, up 10% from 3.66 Bcf/d).

LNG Growth

Liquefied natural gas (LNG) exports seem poised to become a dominant market for domestic production. Strong demand in Asia is driving rapid growth in LNG use, with global consumption on track to rise sharply again this year after climbing by 27 million metric tons (mmt) in 2018, according to Royal Dutch Shell plc. In its annual LNG Outlook, Shell said consumption worldwide last year increased to 319 mmt, with global supply set to increase by 35 mmt this year. The International Energy Agency expects the United States to account for nearly 75% of global LNG export expansions over the next five years.

In an Energy Outlook released last month, BP said LNG exports are likely to increase significantly in coming years, led by the United States and Qatar. North America is seen leading the way on LNG exports, followed by the Middle East, Africa and Russia. As the market matures, the United States and Qatar emerge as the "main centers of LNG exports, accounting for around 40% of all LNG exports by 2040," BP said.

The European Union (EU) has boosted U.S. LNG imports by 181% to 7.9 billion cubic meters (Bcm) since last July, according to the European Commission. EU imports totaled 1.3 Bcm in January, up from 102 million cubic meters in January 2018. In February 2019, total U.S. LNG imports amounted to 0.6 Bcm, according to the commission.

U.S. demand for LNG feedgas has been on the rise recently, hitting a record high of 5.6 Bcf/d in late February and averaging nearly double what it was this time last year, according to RBN Energy. Feedgas deliveries are poised to be the biggest driver of Lower-48 gas demand this year, according to RBN analyst Sheetal Nasta.

"With about 30 mmt/year, or 4.5 Bcf/d, of liquefaction and export capacity due online this year, feedgas deliveries are poised to surpass 9 Bcf/d by the end of the year, with nearly all of that incremental demand coming online along the Texas and Louisiana Gulf Coast," Nasta said. "The pace of this demand growth over the course of the year will come down to how quickly the anticipated trains can complete construction and testing, the timing of which can depend on a whole host of factors, including the extent of the repairs or modifications that are needed along the way, the timing of regulatory approvals, or the timing of gas pipeline connections to supply the facilities."

Several of the companies participating in NGI's survey are invested in major LNG export projects.

BP and ExxonMobil Corp. recently signed an agreement with the Alaska Gasline Development Corp. (AGDC) to collaborate on ways to advance the state-owned corporation's Alaska LNG project, which has an ultimate goal of exporting U.S. LNG to Asian markets.

ExxonMobil and partner Qatar Petroleum last month pulled the trigger on their long anticipated Golden Pass LNG project in Sabine Pass, TX, to capitalize on the low cost supply of U.S. natural gas and the expected growth in global demand.

Another key LNG project in Mozambique, in which ExxonMobil is partnering with Eni SpA, is on track for a final investment decision this year. The development plan covering the first phase of Mozambique Rovema Venture SpA has been submitted for government approval, with Rovema about to produce, liquefy and market gas from the Mamba fields in the Area 4 block offshore Mozambique. The Papua New Guinea LNG project, which ramped up initially in 2014, also is progressing.

Other highlights of NGI’s 4Q2018 survey included a 12% increase year/year for Chevron Corp. (3.89 Bcf/d), a 9% increase for Southwestern Energy Corp. (3.37 Bcf/d), and a 24% increase for Castleton Commodities (3.28 Bcf/d).

Cabot Oil & Gas Corp. reported 2.24 Bcf/d, a 25% increase from the year ago period, and ARM Energy Management reported 2.04 Bcf/d, a 45% increase. Encana Corp. came in with a 12% increase (1.23 Bcf/d), while Anadarko Petroleum Corp. saw a 6% increase (1.12 Bcf/d) and Apache Corp. reported a 55% increase (0.68 Bcf/d).

In NGI's Full-Year 2018 Top North American Gas Marketers Ranking, BP reported a 3% increase compared with 2017 (21.66 Bcf/d versus 21.00), and 16 other marketers reported increases from 2017.

Highlights of the full-year survey include a 24% increase for Macquarie (12.80 Bcf/d, compared with 10.29 Bcf/d in 2017), a 12% increase for Tenaska (10.60 Bcf/d, compared with 9.50 Bcf/d in 2017), and a 4% increase for Sequent (6.68 Bcf/d, compared with 6.50 Bcf/d in 2017). EDF Trading NA reported a marginal increase to 4.92 Bcf/d.

J. Aron reported a 9% increase over 2017 (5.82 Bcf/d). Increases for the full year were also reported by Direct Energy (5.68 Bcf/d), CenterPoint Energy (3.71 Bcf/d), Chevron (3.48 Bcf/d), Southwestern (3.19 Bcf/d), Castleton (2.93 Bcf/d), Cabot (2.00 Bcf/d), ARM (1.89 Bcf/d) and NJR Energy Services Co. (1.85 Bcf/d). Encana (1.16 Bcf/d) and Apache (0.59 Bcf/d) also reported increases in 2018 compared with 2017.

CFE International's average sales for 2018 was 2.28 Bcf/d, compared to a 2017 calculation of 2.46 Bcf/d, which was based on 3Q2017 and 4Q2017 data only -- CFE didn't trade natural gas in the first half of 2017.

The NGI survey ranks marketers on sales transactions only. The Federal Energy Regulatory Commission’s Form 552 tallies both purchases and sales.