Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC

Editorial Comment

With Henry Hub (HH) natural gas prices almost twice as high year over year, as of the time of writing in late October, and similarly record-high prices in Europe and Asia driving competition for LNG, the gas market is rife with tension. Below-average storage levels heading into the heating season have boosted demand for U.S. LNG and exacerbated tensions among EU governments.

With electricity prices expected to soar over the 2021–2022 winter, the European Commission is floating the idea of joint purchases of natural gas by EU countries and an overhaul of power markets. Wealthy, climate-driven countries in northern Europe insist that the present crisis is not tied to EU green ambitions, while southern and eastern nations are more skeptical. The EU’s plan to ban new fossil fuel cars by 2035 and slap a carbon tax on home heating could prove tough to sell to consumers if double-digit power price increases materialize over the winter.

Meanwhile, the U.S. EIA expects HH prices to calm after Q1 2022 as LNG production capacity increases, outpacing demand for LNG export supply. HH prices are anticipated to average $4.01/MMBtu in 2022, although the unreliability of weather forecasts make the price outlook for this winter uncertain.

Just as disruption in gas markets is sure to bring new direction, this Editorial Comment marks the end of my leadership of Gas Processing & LNG after 8.5 years. Be on the lookout for a change in the editorial roster in 2022, and thanks for your many years of insightful feedback and readership! GP

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Editorial Comment
-Lee Nichols
Modern society would not be possible without the use of pipelines to transport natural gas, crude oil and finished products to demand centers.

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