Louisiana’s liquefied natural gas industry and the Haynesville Shale play are now inseparably linked as they move in tandem toward a future where natural gas, not oil, is the state’s big moneymaker, reports 10/12 Industry Report in its latest issue.
Things look promising, from a purely economic standpoint at least. U.S. natural gas prices are much cheaper in the U.S. than Europe, and that has revitalized a lagging LNG export market. Haynesville rig counts are on the rise, too—mostly because of the burgeoning exports.
Current prices and relatively low service costs make production economics the best in years. And firms are investing more as they estimate that higher prices will be more than adequate to cover the rising costs of labor and equipment. Natural gas prices are in the “sweet spot” for both upstream producers and LNG owners.
The mood in Washington, D.C., has also softened somewhat. Until February, the Biden administration seemed intent on delaying, not accelerating, the approval of new projects, says Eric Smith, director of the Tulane Energy Institute.
The Russian invasion of Ukraine, however, brought about calls for increased supply to Europe, and in March the U.S. Department of Energy authorized additional exports. Read the entire story.