What follows is a discussion in which I will post/share industry related articles that I believe to be of general interest to some who frequent this site.

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For Putins plans to work he needs us to become as unstable as possible. Anyone look around lately? We're not as dysfunctional as some, but we don't look like one nation, under god, indivisible, with liberty and justice for all.
I have said it before and I will say it again. A band of young investigative journalists (TRUE JOURNALISTS) could blow the lid off of all of these hamstringing groups and politicians if they only would take up the cause and dig up and expose the bones.
Let's get real....who profits most by our demise? IMO the veil is pretty thin. Can we say Putin?

Agreed, not really looking like that these days.

Need to start taking care of business here at home and maybe that will change.

Looks to me like the rest of the world's countries are doing it.

Why do we think we need to do it for them ?

Source: http://www.bloomberg.com/news/2014-09-19/surging-gas-supply-masks-r...

Surging Gas Supply Masks Risk of Winter Price Shock

JS,

Very informative as usual.

I think we are seeing the lull before the storm; the storm of continual price increases for Natural gas. More and more industrial users are converting to natural gas. The chemical and plastics industries are moving manufacturing capacity back to the U.S. Overall, there will be an increasing demand for natural gas. It's all about supply and demand. As the demand grows the price rises.

Yes, rising prices will hit the homeowner in the wallet. But we will also see new jobs and more tax revenue.

Thanks again for an informative post.

   Amazing, Jack Straw !    Thank you, again !

Source: http://www.reuters.com/article/2014/09/25/us-natgas-henryhub-marcel...

Henry Hub, king of U.S. natural gas trade, losing crown to Marcellus

A Natural Gas rig operated by Chesapeake is pictured in Bradford County, Pennsylvania just outside the town of Wyalusing on January 13, 2013.

Credit: Reuters/Brett Carlsen

(Reuters) - For nearly a quarter-century, traders around the world have looked to a spot in Louisiana for the best price of U.S. natural gas. Now they're looking east.

The Henry Hub in southern Louisiana, which connects to more than a dozen on- and offshore pipelines from Texas and the Gulf of Mexico, has been surpassed as the most active place for trading physical U.S. natural gas by hubs in shale-rich Pennsylvania.

"How important is the Henry Hub as a price proxy for the Eastern U.S.? My thinking is that, before long, it won’t be very important at all," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas in New York.

Only about 240,000 million British thermal units (mmBtu) per day of natural gas have traded in the day-ahead Henry Hub market this year, down 70 percent from an average of more than 825,000 five years ago, according to IntercontinentalExchange data.

The Dominion South hub, a key supply point in the Marcellus shale in southwest Pennsylvania, has averaged nearly 400,000 mmBtu per day so far this year, up sharply from about 290,000 in 2009, the ICE data show.

The switch reflects the boom in shale gas production, as well as a growing recognition that pricing all U.S. gas at a single hub no longer makes sense. The industry is struggling to build new pipelines and infrastructure quickly enough to even out growing price discrepancies in regions like the Northeast.

A decade ago, the Gulf of Mexico pumped about 20 percent of all U.S. natural gas, much of which flowed through the Henry Hub. Now it produces just 4 percent of the nation's total.

Five years ago, the Marcellus produced barely 2 billion cubic feet of gas per day. Now it pumps 16 Bcfd, a fifth of America's gas. It is at the heart of the U.S. shale gas revolution, where the combination of hydraulic fracturing, or fracking, and horizontal drilling technologies have brought massive volumes of gas inexpensively out of once-ignored fields.

The Henry Hub's long-time role as the primary point for pricing contracts for future and prompt gas delivery is beginning to shift.

"Physically, we are buying a lot more supply indexed to the Marcellus pricing points than we did historically," said Kate Trischitta, director of trading at ConEdison Energy, a unit of energy holding company Consolidated Edison Inc.

MORE PIPES COULD NARROW SPREAD

The shale revolution has also pushed prices for gas from the Northeast much lower than gas from the Gulf Coast. Next-day gas at Dominion South went from 21 cents per mmBtu over Henry Hub during the summer of 2009 to 30 cents under in the summer of 2013.

This summer, Dominion South, one of the most-watched price points in the East, was at a discount of $1.50, five times the year-ago discount.

Next-day Dominion South, which hit a 13-year low of $1.72 per mmBtu last week, averaged $2.66 this summer, the lowest since at least 2001, according to Reuters data. Henry Hub spot averaged $4.15.

Some analysts think the spread will narrow as more pipelines are built. Energy companies expect to build pipelines capable of carrying 16 bcf per day out of Northeast fields by 2017, which could double the amount of gas flowing out of the region.

Others question whether prices will converge soon.

"The cost is steep to build new pipelines," Citigroup analyst Anthony Yuen said in a report. "Not all of the pipeline takeaway capacity proposed would be fully subscribed; some may be delayed or canceled."

The Northeast price spreads are likely to "remain challenged" into 2015, Domenic Dell'Osso, CFO at Chesapeake Energy Corp, a major U.S. gas producer, said during the company's August earnings call.

Analysts agree that Henry Hub will remain a benchmark for U.S. gas futures, at least in the U.S. Gulf and West and in international markets.

And with the global acceptance of NYMEX prices, it is likely to keep setting rates for U.S. liquefied natural gas (LNG) when the country starts exporting the fuel in a few years.

"Henry could still be king ... but (gas pricing) is going to be based on location, more than anything else," said Aaron Calder, analyst at Gelber & Associates in Houston.

(In paragraph 10, makes clear Consolidated Edison is a holding company)

(Editing by David Gregorio)

Again... Jack Straw.... Thank you for this Great Information !

Jack,  thanks always for the informative articles.   I especially appreciate this one on the Henry hub.   I have been thinking about the Clarington hub in Monroe County Ohio which was established just prior to the shale boom and now many of the large pipelines lead to the Clarington hub and onward to processing plants and delivery points.   Recently I am unable to google Clarington and find volume and price listings.

From your perspective can you comment about the significance of the Clarington hub in the scheme of the shale play.   How is the volume increasing, pricing etc and any expected build out of processing near the site     And will it become a significiant hub?   Thanks in advance for your comments.

I am not sure that I can say anything intelligent regarding the Clarington Hub; but, at least I’ll try to say something intelligible.

The investing community (especially those less sophisticated … and that includes very many) know only one price …. and that is the price of the Natural Gas passing on the hub located on the outskirts of Henry. Louisiana.

That is the only commonly quoted hub, that is the price that makes it to Bloomberg … the problem is that it is not representative of the realities of 2014; it meant something in 2014 …. not much now.

What should be quoted today is a WEIGHTED average of U.S. regional hubs (weighted by how much Natural Gas passes through them). The World needs to catch up with today’s realities.

I dearly wish that the various Hubs and City Gates associated with the Marcellus and Utica were able to realize those Henry Hub prices.

We (citizens of the Marcellus and Utica) live in our World; Henry Hub is a completely different World … someday we will have to meet (perhaps in the middle).

JS

Source: http://www.ft.com/intl/cms/s/0/c3828aae-4573-11e4-ab86-00144feabdc0...

US shale oil and gas producers are victims of their own success

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

An interesting COYRIGHTED article; to read, please follow the above link.

JS

Jack,

Great article - thanks for posting.

It will be many years until the market becomes favorable to the E&P companies and the Landowners.

I'm in an XTO unit (Marburger B, Forward Township, Butler County, PA) held by two Marcellus wells and I'm in no hurry to see them drill the remaining 5 or so Marcellus wells or go to the Upper Devonian layers or Utica anytime soon.

Prices from July 2014 check stub: propane $0.91/gallon, ethane $0.19/gallon, methane with some ethane left in $3.07/Mcf.

Phil

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