• 6 minutes U.S. Shale Oil Debt: Deep the Denial
  • 12 minutes Knoema: Crude Oil Price Forecast: 2018, 2019 and Long Term to 2030
  • 17 minutes WTI @ $75.75, headed for $64 - 67
  • 15 mins Trump vs. MbS
  • 2 hours Nuclear Pact/Cold War: Moscow Wants U.S. To Explain Planned Exit From Arms Treaty
  • 1 hour Why I Think Natural Gas is the Logical Future of Energy
  • 6 mins Merkel Aims To Ward Off Diesel Car Ban In Germany
  • 5 hours Get on Those Bicycles to Save the World
  • 1 day The Dirt on Clean Electric Cars
  • 11 hours Can “Renewables” Dent the World’s need for Electricity?
  • 11 hours Satellite Moons to Replace Streetlamps?!
  • 7 mins A $2 Trillion Saudi Aramco IPO Keeps Getting Less Realistic
  • 1 day Owning stocks long-term low risk?
  • 14 hours Closing the circle around Saudi Arabia: Where did Khashoggi disappear?
  • 5 hours Can the World Survive without Saudi Oil?
  • 1 hour Long-Awaited Slowdown in China Exports Still Isn’t Happening
Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Trending Discussions

This Major Natgas Development Is Moving Quickly

I wrote a few weeks back about U.S. exports of natural gas to Mexico. And how they could be the major driver pushing North American natgas prices higher.

That movement gained a little more strength this week.

Export project developers NET Midstream announced they have secured bank financing for their NET Mexico project.

A consortium of banks led by Mitsubishi UFJ Financial Group will lend $665 million to the project. The cash will be used to build the 120 mile pipeline from the Eagle Ford natgas basin in Texas to the Mexican border.

This is potentially one of the most significant developments in North American natural gas markets for some time. The NET Mexico pipeline is by far the largest Mexican export project currently on the books. With a planned capacity of 2.1 billion cubic feet per day.

This alone could start sending a few percent of overall U.S. natgas output south of the border. Combined with other planned pipelines, we could see up to 7 billion cubic feet per day--or some 10% of U.S. production--being shipped to Mexico.

And we won't have to wait long for it to happen. This week's financing is the second big announcement for the NET Mexico project in as many months. In November, the pipeline was granted full presidential approval by the Federal Energy Regulatory Commission.

The company also announced this week that procurement of all major pipeline and compression equipment for the project has been completed. Meaning that the development appears to be on schedule to meet its planned commissioning date of late 2014.

This could be one of the most critical factors affecting natural gas prices during the coming year. If exports on the order of several Bcf per day do materialize, it will put significant upward pressure on U.S. prices. Especially in southern plays like the Eagle Ford.

Might be time to start thinking about long positions in this space.

Here's to laying pipe,

By. Dave Forest


x


Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News