U.S. Natural Gas Prices Hit 14-Week High Following Hurricane Helene’s Disruption

Hurricane Helene disrupted gas production in the Gulf of Mexico, leading to a 5% rise in U.S. natural gas prices and affecting key energy infrastructures across the U.S. Southeast.

Partagez:

Hurricane Helene triggered an immediate reaction in U.S. natural gas markets, causing prices to rise by 5% to reach a 14-week high. The storm led to the suspension of 17% of gas production in the Gulf of Mexico, equating to roughly 313 million cubic feet per day (bcfd). This pressure on supply heightened uncertainty about future production capacities. Simultaneously, massive power outages affected approximately 4.6 million homes and businesses in Florida, Georgia, and the Carolinas, impacting local energy consumption and straining the region’s power grid.

This supply disruption comes amidst an already strained natural gas market. Injection levels into storage have been exceptionally low in recent months, a trend attributed to reduced production by operators due to the lower price levels earlier this year. Current gas storage volumes are at 3.49 trillion cubic feet (tcf), a level that remains 5.8% above the five-year average but may not be sufficient if further storms disrupt the region’s supply.

Plaquemines LNG Project in Louisiana Under Scrutiny

Simultaneously, liquefied natural gas (LNG) facilities like Venture Global’s Plaquemines LNG project in Louisiana are under close observation. This project is on the verge of starting its initial production tests, with a current gas flow of 35 million cubic feet per day, far from its maximum capacity of 1.8 billion cubic feet per day. Analysts expect this project could stabilize LNG exports, but its short-term operational status remains uncertain.

Although Helene did not directly impact LNG facilities, any disruption in Gulf production indirectly affects U.S. gas competitiveness on the global market. Ports in the region, notably Port Tampa Bay, have temporarily halted operations, potentially leading to further delays in the movement of petroleum and gas products.

Regional Price Fluctuations and Global Implications

Regional prices varied significantly in response to the hurricane. In Florida, the FGT Citygate gas price surged by 54 cents to $3.42/mmBtu, while in Northern California, PG&E Citygate prices increased by 45 cents. In Southern California, SoCal Citygate prices jumped by 50 cents, settling at $2.43/mmBtu. This volatility reflects rapid supply adjustments due to climate disruptions and increased demand from power plants compensating for reduced renewable energy production under adverse weather conditions.

Internationally, gas prices remained relatively stable. In Europe, Title Transfer Facility (TTF) in the Netherlands reached $11.54/mmBtu, while in Asia, LNG prices for Japan and Korea dropped to around $13.03/mmBtu. These levels remain high compared to historical trends, but potential impacts on U.S. export flows could disrupt this stability as winter approaches and global demand rises.

Uncertain Outlook for U.S. Gas Production

Dry gas production in the Lower 48 states recently fell to 99.1 bcfd, a 2.3% year-on-year decrease. Meanwhile, domestic gas demand remains robust, particularly for exports to Mexico and Canada and for filling LNG storage facilities. Analysts predict that any further disruptions in the Gulf could exacerbate the situation, especially since storage levels, though above the five-year average, might not suffice if sudden demand spikes occur during the colder months.

The outlook for the U.S. natural gas market is therefore heavily influenced by weather events and operators’ ability to quickly restore disrupted production. Rapid recovery is crucial to avoid short-term price pressure as the U.S. aims to maintain its competitiveness in the global LNG market.

TotalEnergies and QatarEnergy have won the Ahara exploration licence, marking a new stage in their partnership with SONATRACH on a vast area located between Berkine and Illizi.
After four years of interruption due to regional insecurity, TotalEnergies announces the upcoming resumption of its liquefied natural gas project in Mozambique, representing a $20bn investment.
The French group has acquired from PETRONAS stakes in several licences covering more than 100,000 km² off Malaysia and Indonesia, consolidating its Asian presence and its exposure to the liquefied natural gas market.
In response to rising summer electricity consumption, Egypt signs import agreements covering 290 shipments of liquefied natural gas, involving major international firms, with financial terms adjusted to the country’s economic constraints.
Egyptian fertilizer producers suspended their activities due to reduced imports of Israeli gas, following recent production halts at Israel's Leviathan and Karish gas fields after Israeli strikes in Iran.
A report identifies 130 gas power plant projects in Texas that could raise emissions to 115 million tonnes per year, despite analysts forecasting limited short-term realisation.
Japanese giant JERA will significantly increase its reliance on US liquefied natural gas through major new contracts, reaching 30% of its supplies within roughly ten years.
Sustained growth in U.S. liquefied natural gas exports is leading to significant price increases projected for 2025 and 2026, as supply struggles to keep pace with steadily rising demand, according to recent forecasts.
Shell is expanding its global Liquefied Natural Gas (LNG) capacities, primarily targeting markets in Asia and North America, to meet rising demand anticipated by the end of the decade.
Above-average summer temperatures in Asia are significantly boosting demand for American liquefied natural gas, offsetting a potential slowdown in Europe and opening new commercial opportunities for U.S. exporters.
Duke Energy plans a strategic investment in a natural gas power plant in Anderson, marking its first request for new electricity generation in South Carolina in over ten years.
Adnoc Gas commits $5bn to the first phase of its Rich Gas Development project to boost profitability and processing capacity at four strategic sites in the United Arab Emirates.
The European Commission aims to prevent any return of Russian gas via Nord Stream and Nord Stream 2 with a total transaction ban, part of its 18th sanctions package against Moscow.
Argentina expands its capacity around Vaca Muerta as Mexico explores the prospects of exploiting unconventional resources to meet its 2030 energy targets.
Petredec Group begins construction of a gas terminal in Chongoleani, Tanzania, scheduled for commissioning by 2027, to strengthen LPG import and logistics across East Africa.
The liquefied natural gas (LNG) terminals market is projected to grow 67% by 2030, driven by global energy demand, liquefaction capacity, and supply diversification strategies.
Subsea7 has secured a subsea installation contract awarded by Shell for the Aphrodite gas project offshore Trinidad and Tobago, with operations scheduled for 2027.
Chinese ethylene producers are betting on a surge in US ethane arrivals in June as Beijing upholds tariff exemptions and bilateral talks resume.
With trading volumes five times higher than all other European markets combined, the Dutch gas hub TTF asserts itself in 2024 as a global benchmark, attracting traders, investors, and speculators far beyond Europe.
Slovakia is calling on the European Commission to regulate gas transit fees as the EU moves toward a ban on Russian imports by 2027.