First Look - Construction begins on GTN XPress as company pitches rate settlement

• Oil is trading higher after two days of losses
  • WTI prices are up nearly $1 to $77.90 as of 8:20 AM
  • Chinese data came in weak, showing a decline in crude consumption, with apparent oil demand down 8% year-over-year in July (BBG)
    • Weak demand in Asia may make it difficult for OPEC to bring back supply in the fourth quarter
  • Global jet fuel demand averaged 7.5 MMBbl/d through July this year, a 0.5 MMBbl/d increase over the same period last year (Reuters)
    • However, US airlines and travel companies are concerned that slowing consumer spending on leisure travel could impact demand in the second half of the year
• Israel continues to anticipate an Iranian attack (BBG)
  • Tensions in the Middle East continue to drive the geopolitical risk premium in crude prices as the region watches for signs of an Iranian attack on Israel
  • The last attack by Iran on Israel in April was mostly thwarted, with most drones and missiles shot down, but the next attack is expected to be larger, threatening a potential Israeli response
  • Regional leaders, along with the US and EU, have been attempting diplomatic solutions in an attempt to avoid a wider regional conflict

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Interest Rate Charts and Tables

• Gas trades modestly higher ahead of today’s storage report
  • Prompt gas was 0.6c higher to $2.225/MMBtu (As of 8:13 AM)
  • Winter ‘24/’25 strip is down 0.9c to $3.208 and the Summer ’25 strip is down 0.8c to $3.164
  • Today's European Ensemble showed colder trends on East and West coasts, lowering Lower 48 temps by 8 F, keeping them below normal next week with slight warming in the 11-15 day period, returning to the 10-year average (Criterion)
• Construction begins on GTN XPress as company pitches rate settlement (S&P Global)
  • Construction on the GTN XPress Project has begun. The project aims to add 150,000 Dt/d capacity to the Pacific Northwest and Northern California by winter 2024
  • Partial service of 50,000 Dt/d started in July, while full construction was delayed due to rate litigation, with work now ongoing at the Starbuck Compressor Station in Washington
  • Legal disputes continue over rate treatment, with a consolidated court case now pending in the 5th Circuit
• Kinetik ups outlook as natural gas processing volumes climb, Permian opportunities grow (NGI)
  • Kinetik Holdings is expanding its Permian Basin operations with the acquisition of Durango Permian, increasing processing capacity by 2 Bcf/d
  • Projects underway include the Kings Landing I processing complex in Eddy County, expected to add 200 MMcf/d capacity by Spring 2025, and a 20-inch pipeline to connect Durango assets to Kings Landing
  • Despite low Waha hub natural gas prices, which averaged $1.365 in June after falling to negative $4.595 in May, Kinetik saw a 7% Y-o-Y increase in processing volumes during 2Q2024, reaching 1.58 Bcf/d
  • The company updated its price outlook for 2024, with natural gas expected to average $2/MMBtu at the Houston Ship Channel and 60c/gal for NGLs