General frost woke up. Winter in America starts with Russian gas

© AP Photo / Michael DwyerЖенщина on one of the streets of Boston during a snowstorm. Archival photoGeneral frost woke up. Winter in America starts with Russian gas© AP Photo / Michael Dwyer

Due to cold weather in the northeast U.S. liquefied natural gas last week rose on the American network from 40%. As a result, on the verge of profitability was not only exports to Europe and Asia LNG is not profitable to sell, even within the country. How sustainable is this trend and why LNG plant on the Yamal overload to send overseas in the material RIA Novosti.

Time to sell the last

Disappointing weather forecast — winter in the United States will be as cold as last year — has spurred the growth of wholesale prices for LNG. And apparently, the reserves of gas in underground gas storages (UGS) will not last long.

Now the volume pumped in American gas storage of fuel is at its lowest level since 2005: a total of 90.5 billion cubic meters. This is 15% less than a year ago, and 16 percent than the average for the five years.

Acute need for additional volumes of natural gas affected the price. If in October on the main American marketplace Henry hub gas cost an average of 3.28 dollars per mBtu (million British fuel units), November 14 — 4.8 dollars.

Particularly hard on the gas reserves was affected by the boom in the Asian market: last summer, for mBtu fuel they gave me about seven dollars, and this year — more 11.

Therefore, despite the fact that gas production in the U.S. rose approximately 12%, fuel for their needs in the country practically does not remain — all contracted and sold to Asia.

Now exporting unprofitable: the average price in the Asian markets is now about 10.38 USD per mBtu and us gas, taking into account current quotations for Henry hub and transportation will cost at least 10.35 USD.

Such was the case last winter. In January, when the North-East of the country hit abnormal frosts Americans Engie had chartered the ship to carry a shipment of Russian LNG from the UK. This year acts the same scheme.

«With all this visible public stream of negativity from Washington back to successfully routed, ironically, the Russian liquefied natural gas. For the last time at least three tankers filled with liquefied natural gas from the Yamal LNG has reached American shores,» — said this week the official representative of the foreign Ministry Maria Zakharova.

The fourth tanker will travel across the ocean very soon. According to media reports, in the coming days, NOVATEK will hold a TRANS-shipment with ice class Arc7 tanker «Vladimir Rusanov» tanker «Pskov» in Norwegian Honningsvag.

It is highly likely that after that Russian LNG will overload on one of the tankers the same Engie (which, in addition to its own courts, has the right to power for the regasification of Boston in Everett) and will deliver to American consumers.

Someone needs to stay in the red

Experts predict a worsening climate in the United States: winter will be colder, summer — hotter. The demand for electricity and, accordingly, gas will increase in the winter for heating, in summer — for powerful air conditioners and refrigerators.

Analysts have expressed doubts that the us gas industry in the foreseeable future will be able both to satisfy growing domestic needs and to increase exports. Therefore, many of the announced today projects for LNG exports will likely remain on paper.

Among the first victims will be Poland. Recently Warsaw and Washington signed a joint Declaration on energy security and two major contracts for the supply of LNG. The first gives the Polish PGNiG right to buy fuel at the factory in Louisiana, and then send to any customers. The second provides for delivery to the terminal «Swinoujscie» in Poland for domestic consumption.

© RIA Novosti / Alexei Vitvitskiy in fotolanciay terminal in świnoujścieGeneral frost woke up. Winter in America starts with Russian gas© RIA Novosti / Alexei Vitvitskiy in fotolanciay terminal in świnoujście

The cost of gas under both contracts tied to prices Henry hub, so that higher prices automatically increases the costs of PGNiG. If the winter gas shortage in the United States will be repeated from year to year, poles will have to buy LNG at a loss, without a chance to recoup the costs.