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Market Insights > First Look

First Look: Golden Pass faces new hitch as contractors pause work

May 09, 2024
  • Oil is trading higher, near $79.50, extending gains from yesterday
    • The US Department of Energy increased its SPR purchase price from $79/Bbl to $79.99/Bbl
    • Russia’s crude production exceeded its pledged OPEC quota in March by about 319 MBbl/d
  • Canadian oil sands production to rise 15% by 2030 (Reuters)
    • A recent report by S&P Global estimates that output from the oil sands in Canada will rise to 3.8 MMBbl/d by 2030, an increase of about 15%
    • Production has risen 1.3 MMBbl/d over the past ten years to its current level of 3.3 MMBbl/d
    • Canada is currently the world's fourth-largest oil producer, with two-thirds coming from Alberta’s oil sands
    • Growth may be limited by takeaway capacity in the next few years, as the Transmountain Pipeline expansion is expected to fill to capacity around 2026

 

  • Natural gas prices trade higher ahead of storage report
    • June ’24 Henry Hub is up 2c this morning to trade around $2.207/MMBtu
    • The Summer ’24 strip is up 0.4c to $2.499 and Winter ‘24/’25 strip is down 3c to $3.404
    • Lower production, along with seasonally changing weather patterns and anticipated return of LNG feed gas demand, continues to support price
    • Today's Euro Ensemble indicates cooler temperatures in the 11-15 day period, balanced by warmth in the 1-15 day range, ultimately having minimal impact on the pattern
  • Golden Pass faces new hitch as contractors pause work (Bloomberg)
    • The Golden Pass LNG project in Texas, jointly owned by QatarEnergy and Exxon Mobil Corp., encounters further delays as Zachry Group halts worker attendance due to a fuel shortage
    • Zachry, handling construction and engineering, informed hourly employees and subcontractors through an email dated May 8 not to return until further notice, without detailing the fuel shortage cause
    • Previous setbacks include a shortage of specialized workers and construction issues, potentially pushing the project's start from 1H 2025 to the second half of 2025 or later
    • Further delays could tighten the global LNG supply by 2025, affecting prices in Europe and Asia, and delay a potential increase in U.S. gas exports
  • New Fortress Energy expecting first LNG from Altamira FLNG 1 later this month (Criterion)
    • New Fortress Energy's 1Q24 update reveals that the Altamira FLNG 1 unit is mechanically complete, with commissioning underway and first LNG production expected in late May
    • The first full LNG cargo is anticipated to be shipped in June from this floating liquefaction facility, which has a design capacity of 1.4 MTPA, equivalent to around 184 MMcf/d of gas
    • New Fortress Energy will source gas volumes from TC Energy's Sur de Texas Pipeline, which transports U.S. natural gas

 

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