U.S. FERC Says Winter Natural Gas Prices Will Be Higher Than Past Years

Oct 20 (Reuters) – Natural gas prices at major U.S. commercial hubs for the coming winter are expected to remain higher than in recent years, the Federal Energy Regulatory Commission (FERC) said on Thursday.

Even if domestic gas production grows faster than domestic demand, “forecasts predict that continued growth in net exports, including from liquefied natural gas (LNG) export facilities, will put additional pressure on gas prices. natural gas this winter,” the agency said.

Freeport LNG, the second-largest LNG export plant in the United States, shut down for five months by a fire, must receive full approvals before a planned restart in November can begin, regulators said this week.

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In its annual summer assessment, FERC said it expects the Henry Hub natural gas futures contract price to average $6.82 per million British thermal units (MMBtu) for the winter 2022-2023, up 30% from the price set last winter.

U.S. natural gas futures are currently trading at just under $5.3 per mmBtu, their lowest levels in about seven months.

This year, most generation capacity additions will come from solar and wind, while most retirements will come from coal, the commission said.

“In total, the United States will add 43 gigawatts (GW) of net winterizing capacity between March 2022 and February 2023, primarily from solar and wind generation.”

However, several regions could experience coal supply and transportation constraints this winter due to ongoing rail service issues, he said nat gas supply is expected to remain constrained in New England, resulting in a rising gas and electricity prices.

“Gas pipelines in California may also face strain this winter due to ongoing pipeline outages.”

Natural gas storage withdrawals for the 2022-23 withdrawal season are expected to fall 11.1% below year-ago levels, the agency predicted, and projected a 24.3% increase in exports. net of natural gas.

FERC warned that this winter, international markets will likely affect the US market as well, as they sometimes did last winter.

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Reporting by Bharat Govind Gautam in Bengaluru; Editing by David Gregorio

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