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First Look: Iraq won't agree to further OPEC cuts | Golden Pass LNG reportedly in contractual dispute with construction contractor

May 13, 2024

Oil is trading higher, around $78.85, extending some gains from last week
- China announced plans to sell long-term bonds to support growth and energy consumption within the country
- Two key inflation reports will occur this week, with April PPI on Tuesday and April CPI on Wednesday
Iraq won't agree to further OPEC cuts (BBG)
- Iraq’s oil minister, when asked about the prospects of further cuts to supply, said, “No, I think Iraq has cut enough and will not agree to any other cut”
- OPEC is set to meet on June 1 to discuss the future of their production cuts and whether to extend them into the second half of the year
- Iraq continues to overproduce its OPEC quota, with the country exporting 3.4 MMBbl/d this month, 100 MBbl/d more than their agreed-upon quota
China increases its presence in Iraqi oil bidding (BBG)
- Iraq’s oil ministry awarded 12 blocks and fields with oil and gas potential across the country, with mostly Chinese companies participating
- Seven out of eight Chinese companies participating won the rights to drill in a total of 10 blocks

Natural gas prices trade modestly lower despite warm forecasts expected to keep demand high
- June ’24 Henry Hub is down 0.2c this morning to trade around $2.25/MMBtu
- The Summer ’24 strip is down 0.2c to $2.483 and Winter ‘24/’25 strip is down 0.3c to $3.354
- Today’s 00z model confirmed last week’s pattern, with the Euro Ensemble confirming a warmer South Central pattern; temperatures will rise this week and then hover around the 10-year average in late May (Criterion)
- Permian Highway flows will be restricted to 2.45 Bcf/d (93% of capacity) from May 13-17 for maintenance, a minor 0.14 Bcf/d reduction compared to last week
Golden Pass LNG reportedly in contractual dispute with construction contractor (NGI, Criterion)
- Golden Pass LNG is reportedly facing near-term delays due to contractual disputes with Zachry Industrial Group
- 12News Now confirmed that workers at the Golden Pass LNG construction site were furloughed last week
- Zachry instructed employees not to report to the work site on May 9 or until further notice, citing temporary constraints
- The impact on the commissioning timeline is unclear, but initial feed gas flows are expected by 4Q24, with T1 ramping up near year-end or into 1H25
Sempra doubling LNG export capacity ahead of forecast demand surge (NGI)
- Sempra aims to double its LNG export capacity in response to anticipated global demand growth despite regulatory uncertainties over the future of U.S. exports
- The company is developing nearly 40 mmty of LNG export projects on the U.S. Gulf Coast and Mexico’s Pacific Coast
- CEO Jeffrey Martin said Sempra’s LNG growth forecasts are based only on projects that have reached final investment decision (FID) and are under construction, excluding potential upside from projects still in development
- He added that 16 mmty of new export capacity is under construction, expected to double Sempra's existing LNG footprint
- Construction of Energía Costa Azul LNG Phase 1 in Mexico and Port Arthur LNG Phase 1 in South Texas is on schedule, with ECA Phase 1 set to start in summer 2025 and Train 1 and Train 2 of the Port Arthur LNG facility in 2027 and 2028

First Look: Iraq won't agree to further OPEC cuts | Golden Pass LNG reportedly in contractual dispute with construction contractor

May 13, 2024

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First Look: Iraq won't agree to further OPEC cuts | Golden Pass LNG reportedly in contractual dispute with construction contractor

May 13, 2024

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