Since 2014 the US imposed different sanctions on Russia because of the Crimea conflicts and more recently the accusations of meddling in the 2016 US presidential elections. One of the most recent rounds of sanctions were signed by President Trump last year and impact the Russian energy sector, including LNG.
The most recent sanctions on Russia were still settling in at the beginning of January when we saw spot gas prices at the Algonquin Citygate skyrocketing because of a cold snap hitting the area.
The pipeline capacity in this area is too limited to bring additional volumes from the neighboring states.
As a result, price arbitrage isn’t possible and the spot price went above 80 $/MMBTU, a price level we haven’t seen in the last 5 years.
To avoid similar problems in the future, additional pipeline capacity would be welcome. But reality shows that there are often objections to the installation of additional capacity, as recently became clear with the Constitution Pipeline project that was rejected by the FERC. At the same moment in time LNG exports are leaving the US from the Sabine Pass terminal around Houston.
By Bart Verest
See Original Article (to E&C website)
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