S&P Global Platts analysis: Rising Gulf Coast LNG demand could boost Haynesville production


Rising feedgas demand from Gulf Coast LNG terminals are expected to offer an incremental outlet for Haynesville production, an S&P Global Platts analysis concludes.

Rig counts and gas production in the Haynesville Shale are on the rise, S&P reports, driven by stronger winter forwards prices and an anticipated uptick in LNG demand.

In September, rig numbers in the Haynesville reached their highest since March when activity fell to a 41-month low amid a selloff in the energy commodities markets. On Sept. 23, rig count in the Texas-Louisiana play was estimated at 35—down from levels in early September but still four rigs above an annual low in May, S&P Global Platts says, citing data from Enverus DrillingInfo.

In October and November, cargo-lifting cancellations at U.S. export terminals are projected to number fewer than 10 per month—down sharply compared with July and August when some 45 loadings per month were cancelled, data recently reported by S&P Global Platts shows.

Following the recent completion of new liquefaction capacity, U.S. feedgas volumes could reach new record highs by late fourth quarter or early next year. According to a recent forecast from Platts Analytics, volumes could top 11 Bcf/d this winter, eclipsing prior single-day records around 9.6 Bcf/d.

According to the S&P Global Platts analysis, the Haynesville’s proximity to Gulf Coast terminals in Louisiana and Texas, where much much of this winter’s incremental LNG demand is expected, could offer producers there competitive price-spreads to the coast.

Read S&P Global Platts’ full analysis.