ISM Mid-winter Conference ISM Mid-winter Conference Short Term Perspectives for Natural Short Term Perspectives for Natural Gas Gas February 2006 February 2006 knowledge to bridge the gap
ISM Mid-winter Conference Short Term Perspectives for Natural Gas February 2006 knowledge to bridge the gap.
Dec 24, 2015
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
ISM Mid-winter ConferenceISM Mid-winter ConferenceShort Term Perspectives for Natural GasShort Term Perspectives for Natural Gas
February 2006February 2006
knowledge to bridge the gap
Page # 2 Petral Consulting Companyknowledge to bridge the gap
Page # 3 Petral Consulting Companyknowledge to bridge the gap
Katrina & RitaKatrina & RitaThrough the heart of the Gulf of MexicoThrough the heart of the Gulf of Mexico
Page # 4 Petral Consulting Companyknowledge to bridge the gap
Shut-in Natural Gas ProductionShut-in Natural Gas ProductionKatrina/Rita ImpactKatrina/Rita Impact
01,0002,0003,0004,0005,0006,0007,0008,0009,000
10,000
29-A
ug 6 14 22 30 8 16 24
1-N
ov 9 17 25 3 11 19 27 3 11
Mill
ion
Cu
bic
Ft
per
Day
Katrina/Rita S-I Ivan S-I
Page # 5 Petral Consulting Companyknowledge to bridge the gap
What Happened after Katrina & Rita?What Happened after Katrina & Rita?
With 5-8 Bcfd of GOM production shut-in, forecasts of $20 per MM Btu were prevalent in the fourth quarter of 2005
Gas inventory reports were generally ignored during October/November
How did we avoid a price spike to $20 per MM Btu?» Rules of curtailment were very important» Price premiums versus resid triggered fuel switching
Page # 6 Petral Consulting Companyknowledge to bridge the gap
Gas Pricing DifferentialsGas Pricing Differentials
Usually, gas prices in Louisiana average 5-10 ¢ per MMBtu above Houston Ship Channel. During the 4th quarter, the premium average $2.00 per MMBtu. Why were pricing differentials so much wider than normal?» Rules of curtailment ARE very important» Consumers who were curtailed were willing to pay very
high prices to buy gas away from consumers who were not curtailed
Page # 7 Petral Consulting Companyknowledge to bridge the gap
Natural Gas Price InfluencesNatural Gas Price Influences
Other than hurricanes, natural gas prices respond to three fundamental influences:» Trends in crude oil and resid pricing» Weekly inventory report & year-to-year
comparisons» Demand in the power generation market
Page # 8 Petral Consulting Companyknowledge to bridge the gap
Gas Fired Power GenerationGas Fired Power GenerationPeak Demand SeasonPeak Demand Season
10
12
14
16
18
20
22
24
1999
2000
2001
2002
2003
2004
2005
2006
Bill
ion
Cub
ic F
t per
Day
Page # 9 Petral Consulting Companyknowledge to bridge the gap
Gas Fired Power Generation:Gas Fired Power Generation:Share of Total GenerationShare of Total Generation
1011
121314
151617
1819
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
% o
f Tot
al P
ower
Gen
erat
ion
History Forecast High Range
Page # 10 Petral Consulting Companyknowledge to bridge the gap
Residential/Commercial Demand:Residential/Commercial Demand:Winter SeasonWinter Season
0
5
10
15
20
25
30
35
40
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Bill
ion
Cu
bic
Ft
per
Day
History Forecast High Case
Page # 11 Petral Consulting Companyknowledge to bridge the gap
Injections into Working Gas StorageInjections into Working Gas Storage
-5
0
5
10
15
20
Ap
ril
May
Jun
Jul
Au
g
Sep Oct
No
v
Bill
ion
Cu
bic
Fee
t p
er D
ay
Avg 01-03 2005 pre Katrina 2005 post Katrina
Page # 12 Petral Consulting Companyknowledge to bridge the gap
Working Gas StorageWorking Gas StorageExplanations for Weak Injection RatesExplanations for Weak Injection Rates
Railroad maintenance in Wyoming began in July and coal deliveries were curtailed – by some amount. Some power generators switched to gas // demand was 3-5 Bcfd higher than in 2004
Hot weather pushed electric power demand sharply higher. Katrina & Rita disrupted short term supply plans for many
power generators and industrial consumers. Despite the loss of 5-8 Bcfd for 2 months, natural gas
storage injections were sufficient to push inventories to a peak of 3.25 Tcf by mid-November – gas pipelines affected by supply losses invoked “rules of curtailment”
Page # 13 Petral Consulting Companyknowledge to bridge the gap
Injections into Working Gas StorageInjections into Working Gas Storage
0
2
4
6
8
10
12
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Bill
ion
Cu
bic
Fee
t p
er D
ay
History Base Case High Case
Page # 14 Petral Consulting Companyknowledge to bridge the gap
Working Gas In StorageWorking Gas In StorageSeasonal MinSeasonal Min
00.20.4
0.60.8
11.21.4
1.61.8
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Tri
llio
n C
ub
ic F
eet
History Forecast High Case
Page # 15 Petral Consulting Companyknowledge to bridge the gap
Natural Gas In Working StorageNatural Gas In Working StorageSeasonal PeakSeasonal Peak
2
2.2
2.4
2.6
2.8
3
3.2
3.4
3.6
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Tri
llio
n C
ub
ic F
eet
History Forecast High Case
Page # 16 Petral Consulting Companyknowledge to bridge the gap
Houston Ship Channel Gas PricingHouston Ship Channel Gas Pricing2003/20052003/2005
0
2
4
6
8
10
12
14
16
2003 Ap
r
Jul
Oct
2004 Ap
r
Jul
Oct
2005 Ap
r
Jul
Oct
2006
Do
llars
per
MM
Btu
History post Katrina 1% S. Resid Hi S DFO Henry Hub
Page # 17 Petral Consulting Companyknowledge to bridge the gap
Cash Market Henry Hub Natural GasCash Market Henry Hub Natural GasWinter AveragesWinter Averages
0
2
4
6
8
10
12
14
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Do
llars
per
MM
Btu
History Forecast 1% S. Resid Hi S DFO
Page # 18 Petral Consulting Companyknowledge to bridge the gap
Cash Market Natural Gas PricesCash Market Natural Gas PricesShort Term ForecastShort Term Forecast
0
2
4
6
8
10
12
14
03:1
04:1
05:1
06:1
Do
llars
per
MM
Btu
Henry Hub Forecast 1% S. Resid Hi S DFO HSC
Page # 19 Petral Consulting Companyknowledge to bridge the gap
Cash Market Henry Hub Gas PricesCash Market Henry Hub Gas PricesLong Term ForecastLong Term Forecast
0
1
2
3
4
56
7
8
9
10
1990
1995
2000
2005
2010
2015
Dol
lars
per
MM
Btu
History Forecast Coal Dlvd. LNG Breakeven 1%S Resid
Related Documents
