Blue Lacy Advisors, LLC – Early December Market Commentary
Minneapolis, MN | December 12, 2022 | By: Steve Sinos, Blue Lacy Advisors, LLC
Freeport announced another in a series of delays in its liquid natural gas (“LNG”) facility’s restart on the US gulf coast (“USGC), leaving ~15% of the USGC’s LNG export capacity offline. The company’s announced delay pushes the restart back by at least two weeks, with an optimistic target of initial startup by year end. They maintain their goal of having 2 Bcf/day of capacity online by January to early February and reaching the full 2.3 Bcf/day by the end of the first quarter. Traders in my network remain skeptical, especially those tracking regulatory filings that suggest a restart would not happen until at least February. Meanwhile, pipeline deliveries into LNG facilities reached 12.8 Bcf/day without Freeport in recent weeks, according to scraped data. That puts LNG pipeline flows at their highest since Freeport went offline in June and represents 4% growth YoY. US LNG plants, ex-Freeport, are now running at ~96% capacity, a reliable source of demand for US gas producers after a slow start to winter. Europe continues to invest in LNG import capacity. Recent announcements of long-term contracts suggest it will continue to be a source of demand even in a post-war world without Russian sanctions. The US’s EIA estimates that the EU+UK will expand their combined LNG import capability by >1/3, adding ~7 Bcf/day over the next two years.
*This summary is based off December 2, 2022
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Meet the Author!
Steve has spent his career in strategy, risk, trading, and investment. He works with investors to source investments in opportunistic or high growth sectors, with particular interest in early-stage companies solving clearly defined problems.
He is currently a Managing Partner with Blue Lacy Advisors LLC, giving management teams and investors confidence in their decision making by supporting strategic planning and execution, risk management, commodity trading, and market analysis.
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