Energy Management

Ask the Experts: Energy Market Trends Affecting Your Business

In our Ask the Experts blog series, we offer our customers the opportunity to submit questions to learn more about the energy market trends that may affect their future contracting decisions, such as weather, gas storage and production, and domestic and global economic conditions. Most recently, customers asked questions that Constellation’s Commodities Management Group answered:

Will the export capacity for liquefied natural gas (LNG) be met by an increased number of LNG tankers, or is there an expected lag in the development of the shipping capacity?

The shipping industry has been building out capacity to meet the growing expansion of LNG liquification capacity in the United States, Australia and the Middle East. For 2018, a total of 65 ships were planned with net capacity of 10.23 million cubic meters of capacity. As the chart below illustrates, this would be one of the largest buildouts in several years.

Last week, Qatar’s energy minister announced that the country would seek to buildout as many as 60 new LNG facilities, (likely to occur in South Korea) as Qatar is set to expand its LNG capacity from its current 77 million tonnes per annum to 110 million tonnes, a 43% increase.

 

LNG Capacity

 

What percentage of natural gas production in the U.S. is comprised of ‘associated gas’?

Approximately 20-25% of U.S. natural gas production is from associated gas. While the table below does not account for 100% of associated gas production, primarily not including the Gulf of Mexico, the majority comes from the following shale play.

As the table below illustrates, currently 8.1 million barrels/day (bbl/day) of production are coming from the major shale plays out of a total of 11.4 million bbl/day for the Lower 48. Another 1.8 mm bbl/day comes from Gulf of Mexico.

 

EIA Drilling Productivity Report

 

To ask our Commodities Management Group a question regarding energy market trends that may have impact on your business, email us at webinar@constellation.com.

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