EIA: Henry Hub price continues to rise

Natural gas spot prices at the Henry Hub in the United States are continuing to increase, the Energy Information Administration said in its weekly report.

The prices have risen from $1.79 per million British thermal unit (MMBtu) on May 27, 2016, to $2.78/MMBtu as of June 22, the EIA said.

Concurrently, the New York Mercantile Exchange (Nymex) futures contract for January 2017 delivery at the Henry Hub increased from $3.10/MMBtu to $3.35/MMBtu, the agency added.

“Although the premium of the January contract over the spot price has narrowed considerably to 59¢/MMBtu from $1.31/MMBtu on May 27, incentive to inject natural gas into storage remains high.”

Moreover, the higher price levels will improve the economics for increasing production, particularly if they climb further above $2.75/MMBtu for a sustained period, according to the EIA.

Sabine Pass LNG exports

The natural gas pipeline flows to Cheniere’s Sabine Pass liquefaction terminal averaged 0.61 Bcf/d in the week ending on June 22, 1% higher than receipts last week, the EIA said.

“One vessel (LNG-carrying capacity 3.2 Bcf) departed Sabine Pass terminal on June 20 and one vessel (LNG-carrying capacity 3.7 Bcf) is currently loading at the terminal,” the agency said in the report released on Thursday.

Cheniere recently said that Train 1 at the facility has been completed with first commercial delivery expected to occur in November when the 20-year LNG sales and purchase agreement with Shell commences.

Prior to the date of first commercial delivery Shell has certain rights to early cargoes produced from the first liquefaction train at Sabine Pass.

According to the shipping data, Sabine Pass exported fifteen LNG cargoes since start-up in February.

Houston-based Cheniere expects first cargo from the second train at its Sabine Pass export plant in late August.

The company is developing up to six trains, each with a production capacity of approximately 4.5 mtpa of LNG, at the Sabine Pass terminal, adjacent to the existing regasification facilities.

LNG World News Staff