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supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

Anybody watching natural gas?
quote:


quote:


https://www.naturalgasintel.com/natural-gas-shippers-said-onboard-for-ngtls-west-path-expansion/



NatGas Intel Page

Natural Gas Futures, Cash Prices Soar Above $5.00 as Nicholas Amplifies Production Worries

BY KEVIN DOBBS
September 13, 2021

Natural gas futures surged on Monday as a new tropical storm threatened to further shake the Gulf of Mexico’s (GOM) production foundation, a development that could hamper supply/demand balances at a time when gas in storage for winter is already light.




The October Nymex contract cruised 29.3 cents higher day/day and settled at $5.231/MMBtu. November gained 30.0 cents to $5.273.


‘Precarious’ Storage
Production last week held around 90 Bcf in Ida’s wake – about 2 Bcf/d below the summer average. Even prior to Ida, output was running shy of demand. This prevented utilities from injecting average levels of gas into storage during the summer months.

With demand strong, production light and Nicholas presenting the potential for new output cuts, futures on Monday added to big gains already made in September. The prompt month advanced 5% last week and 8% the previous week.

Bespoke cautioned that storage may fail to reach the 3.5 Tcf level it said could be needed to support heating needs if the coming winter starts early or proves particularly cold.

The U.S. Energy Information Administration’s (EIA) latest data showed utilities injected 52 Bcf natural gas into storage for the week ended Sept. 3. The increase was not enough to alleviate stockpile concerns. The build lifted inventories to 2,923 Bcf, but that was well below the year-earlier level of 3,515 Bcf and the five-year average of 3,158 Bcf.



now for the interesting part, all of that gas in the storage chart is treated (acid gasses like H2S, CO2, O2 are removed) and dehydrated gas:

1. Formaldehyde was tight because most of the available material was being diverted to the lumber industry because of the sky high lumber market post-Covid. Lumber is coming down and formaldehyde supply chain availability is loosening up

2. The DOW Plaquemine force majeure from being down from IDA put the already tight Mono-Ethanol Amine Supply Chain into an absolute emergency situation.

3. Formaldehyde and MEA are the primary ingredients to make Triazines

4. Triazines are used to economically scavenge (remove) Hydrogen Sulfide gas from natural gas supplies. Alternatives to triazine require constructing additional mechanical means and more chemicals.

5. Hydrogen Sulfide (H2S) is a naturally occurring poisonous gas that must be removed from natural gas for distribution (home/commercial use)

6. So there is a tremendous shortfall in triazine production happening right now that is expected to impact supply chain over the next 8 weeks

7. In response to not being able to economically treat the Hydrogen Sulfide in the natural gas, O&G Producers are shutting in natural gas production all over the country.

8. One major ARKLATEX operator is expecting to take 500 million cubic feet/day of natural gas off the market by this time next week because they cant afford to treat it for H2S.

9. They are not the only US producers taking production offline

10. Inflation (weaker dollar), rail car shortages and maritime supply chain issues (lack of workers/containers/ships post Covid) plus 4-6week lead time has made supplementing MEA supply chain from foreign producers difficult to next to impossible.




This post was edited on 9/14 at 2:40 pm


Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
2289 posts

re: Anybody watching natural gas?
I blew out of a position in UNG earlier this year in the $10 range. Seeing it around $18.50 now surely does make me chuckle… NOT!


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white perch
Northwestern St. Fan
the bright, happy side of hell
Member since Apr 2012
6431 posts

re: Anybody watching natural gas?
Time to mortgage the house and put it all in UGAZ


supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

re: Anybody watching natural gas?
Henry Hub is $5.30 today


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evil cockroach
LSU Fan
27.98N // 86.92E
Member since Nov 2007
5761 posts

re: Anybody watching natural gas?
If you want another play, ChampionX (CHX) owns like all the patents on non-triazine scavengers and flooded towers. When triazine can’t be supplied , CHX will see significant in flows of orders for their patented chemistry.

TL;DR CHX to $50/share . Hop on the train now, don’t get left behind.


bayoubengals88
Wisconsin Fan
LA
Member since Sep 2007
15904 posts

re: Anybody watching natural gas?
Someone always told me that BOIL is predictable...


Enfuego
Tulane Fan
Uptown
Member since Mar 2009
9733 posts

re: Anybody watching natural gas?
Great insight.
This post was edited on 9/15 at 9:11 am


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Douglas Quaid
TBD Fan
Mars
Member since Mar 2010
3764 posts

re: Anybody watching natural gas?
Beat me to it.


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supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

re: Anybody watching natural gas?
quote:

owns like all the patents on non-triazine scavengers and flooded towers.


ehhhh, not really

most non-MEA triazine alternatives are older than triazines, there are very few currently patented options that work in the same manner (injection into flow). None of the alternatives are capable of stepping in and replacing the MEA triazine market in a timely and cost effective manner in a normal market. Most are likely going to try to use Hydroxides, Amines, Glyoxal or most likely MMA Triazines to make up the shortfall, but those can cause problems and can be expensive.

cost effective alternatives like Amines, Sodium Hydroxide, Potassium Hydroxide have been around forever and typically require installing a vessel (bubble tower).

the issue is transporting sour wet field gas from well head through gathering systems into transmission systems to the gas plants for processing for distribution.

Most of those pipeline transmission systems have strict contracts and DOT ratings that require <4ppm H2S. An acid gas rated pipeline has a different set of DOT regulatory accountability requirements.

So producers can't just put natural gas with >5ppm H2S in the pipeline without penalty. Most Gas Plants are not set up for high H2S gas coming in anyway.

It's a mess that will be resolved with using higher priced products or simply shutting in production until the MEA Supply Chain clears up

what will most likely happen is high H2S Gas wells are being shut in first, then some oil/gas wells in high H2S areas will follow. So look for natural gas prices to continue to go up quickly, and Oil prices to go up more slowly.

Henry Hub up to $5.46 today
This post was edited on 9/15 at 1:58 pm


evil cockroach
LSU Fan
27.98N // 86.92E
Member since Nov 2007
5761 posts

re: Anybody watching natural gas?
quote:

ehhhh, not really

most non-MEA triazine alternatives are older than triazines, there are very few currently patented options that work in the same manner (injection into flow). None of the alternatives are capable of stepping in and replacing the MEA triazine market in a timely and cost effective manner in a normal market. Most are likely going to try to use Hydroxides, Amines, Glyoxal or most likely MMA Triazines to make up the shortfall, but those can cause problems and can be expensive.

cost effective alternatives like Amines, Sodium Hydroxide, Potassium Hydroxide have been around forever and typically require installing a vessel (bubble tower).


way newer technologies out there than what you posted.


supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

re: Anybody watching natural gas?
Yeah I know there are new “technologies”

that are too expensive

Or cause terrible scale problems

Or cause crap loads of dithiazine solids

If these new wonder drugs can’t find a foothold in this current market they probably won’t

But that is not the point of this thread, this is about sour gas shutting in production because it can’t be treated at a cost effective level and the resulting commodity pricing opportunities this presents


thejudge
USA Fan
Westlake, LA
Member since Sep 2009
11611 posts

re: Anybody watching natural gas?
It blows. We eat 185 million cubic feet of gas a day. That shite gets up to 10/12 it'll be ugly .
This post was edited on 9/15 at 7:12 pm


TigerDog83
LSU Fan
Member since Oct 2005
7680 posts

re: Anybody watching natural gas?
Going to be a great run for producers the next few months. Best times we have seen in likely ten years on the gas side. Hopefully the sub 3.00 gas is a thing of the past now that Wall Street has cut the funding to 80% of the indebted shale drillers.


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supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

re: Anybody watching natural gas?
quote:

TL;DR CHX to $50/share . Hop on the train now, don’t get left behind.


on another note, CHX could be a good play because of other factors going on in the O&G chemicals business


CHX is one of a few O&G Chemicals companies that is basic (have their own reactors) and can make some of their most important raw materials for their products.

O&G chemicals raw materials are very short, silicons, acids, surfactants, amines, glycols specifically.

There is a LOT of US market share held by smaller to mid-sized O&G Chemical companies that rely on other companies for their products manufacturing. Inflation, disrupted supply chains, shortage of materials is causing costs to go through the roof, if you can get materials and products at all. The small to midsized companies are running out of products to sell and their scope has put them on the bottom of the allocations lists.

Soon the market will be divided into those that have products to sell to the O&G Producers and those that don't.

CHX will be one of those that are in the HAVE column, they should gain market share by default


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DabosDynasty
Clemson Fan
Member since Apr 2017
2999 posts

re: Anybody watching natural gas?
CNBC - European LNG Shortage

quote:

“People are starting to throw the ‘crisis’ word around” when it comes to Europe, said John Kilduff, partner with Again Capital. He said natural gas in storage in Europe is 16% below the five-year average, and the level in storage is a record low for September.

“Europe is squarely behind the eight ball going into the winter season. It’s going to put the focus on this commodity that’s been overlooked for the last several years,” said Kilduff.

The tipping point could come in several months when it becomes clear what type of winter is ahead for Europe, and also the U.S. Some analysts say in an extreme scenario, U.S. prices could double if there is an extended cold spell, particularly in Europe where shortages could get severe.

“If the winter is mildly cold, it’s going to be problematic for sure,” said Francisco Blanch, head of commodities and derivatives strategy at Bank of America.



LNG shortage + uranium shortage + winter


supatigah
LA-Lafayette Fan
Sheriff of Banned Town
Member since Mar 2004
82441 posts

re: Anybody watching natural gas?
On the treatment side, an indicator in the US will be the Gas Storage number.

Once we reach an equilibrium between the clean gas Natural Gas and the sour gas we can treat for CO2/H2S (with available chemical supplies) and the gas we consume, we should see the gas to storage number indicate where we are.

If the gas we can treat is below the gas we consume number, then we will see the gas in storage volume number fall as we pull treated gas out of the caverns.

If the gas we can treat is at the gas we consume number volume then the gas to storage volume will zero out.

I suspect that Gas Producers will shut in more than they actually need to relative to treatment capabilities, so they can drive the gas price up even more and take some profits. I also suspect they will push more US treated gas to LNG for sale to Europe to pull as much profit from that market as well.

an early winter or an especially cold winter here or in Europe will mess us the US Economy pretty bad, but be VERY profitable for the Gas producers


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