Originally published for customers March 20, 2024
What’s the issue?
Within the national natural gas market, dozens of regional markets are ripe with opportunity for growth — by optimizing existing assets and/or expanding through capital projects. These smaller markets vary in size and scope from major shale plays with dozens of pipelines to cities with a handful of delivery points on a single pipeline.
Why does it matter?
Effective business development in these regions requires a deep understanding of the intricate market landscape informed by data from a number of disparate sources. This data must be acquired, aggregated, analyzed, and finally summarized to effectively communicate findings to key stakeholders. This is an exceptionally time consuming process requiring technical and subject matter expertise which can burden teams and organizations with competing priorities and resourcing challenges.
What’s our view?
Arbo provides this service to our market-leading customers, leveraging our team’s technical and analytical capabilities layered with years of industry experience. Our in-depth market studies provide business development teams with actionable insights on the physical transportation capabilities and related costs in any market of interest across the United States.
Within the national natural gas market, dozens of regional markets are ripe with opportunity for growth — by optimizing existing assets and/or expanding through capital projects. These smaller markets vary in size and scope from major shale plays with dozens of pipelines to cities with a handful of delivery points on a single pipeline. Effective business development in these regions requires a deep understanding of the intricate market landscape informed by data from a number of disparate sources. This data must be acquired, aggregated, analyzed, and finally summarized to effectively communicate findings to key stakeholders. This is an exceptionally time consuming process requiring technical and subject matter expertise which can burden teams and organizations with competing priorities and resourcing challenges.
Arbo provides this service to our market-leading customers, leveraging our team’s technical and analytical capabilities layered with years of industry experience. Our in-depth market studies provide business development teams with actionable insights on the physical transportation capabilities and related costs in any market of interest across the United States.
A completed market study summarizes key insights about the natural gas transportation landscape within a specific region or market of interest. These insights create an intimate understanding of the market dynamics at play, capture competitive intelligence, and ultimately identify opportunities for growth.
Understanding the competitive landscape and associated opportunities in a specific area requires a comprehensive analysis of a number of data sources. These sources include geospatial data of natural gas infrastructure, point and segment capacities on pipelines of interest, tariff rates, and long-term transportation contracts. The aggregation and analysis of these data sources provide a comprehensive overview of the existing competition in the selected region.
Examples of previous market-related analyses performed by the ArboIQ team include:
The cornerstone of any market study lies in identifying the natural gas infrastructure within the selected market of interest. This step involves extracting granular information ranging from pipelines passing through a particular market area to the specific receipt and delivery points within that same area. Once the infrastructure of interest has been identified, it can be mapped to understand the full picture of the chosen market, as seen below.
It is possible to identify other infrastructure within a certain radius of the pipelines of interest. These facilities can range from incumbent storage and power generation facilities to emerging opportunities like data centers and landfills.
Another key aspect of a comprehensive market study is information pertaining to both point and segment capabilities in the identified market of interest. Identifying point capacities within and segment capacities in and out of the selected market allows for an understanding of the current capabilities of existing infrastructure. It is also possible to analyze short-term utilization at the point and segment level to better understand the capacity constraints and demand-supply dynamics at pipeline receipt and delivery points. An effective means for visualization of this information is shown on the following map.
The above map visualizes information from a number of sources in an easily digestible format, making it easy to determine flow direction, point and segment capacities, and existing interconnects in the region of interest.
Evaluating existing tariff rates allows for the assessment of cost implications for the transportation of natural gas across existing pipeline routes. As the number of pipelines of interest in a specific analysis grows, so does the number of data sources required to aggregate this key source of information. The ArboIQ team has the ability to automatically crawl these sources and extract tariff information for pipeline routes of interest. An example of this is shown below.
Our customers are most often interested in competitive analysis of the firm transportation rates out of or into a particular market. Depending on the scope of the analysis, it is possible to analyze a variety of rate schedules on a particular pipeline or compare the offerings for something like no-notice service across several pipelines in a particular market. We discussed no-notice and peaking services in depth in Filling the Demand Gaps with (Little to) No-Notice Gas Service.
Knowing the tariff rates on particular pipelines provides only one piece to a regional market puzzle.. The amount of capacity that is contracted on a firm basis provides a more complete picture of contract pricing for service out of or into the market of interest. By examining long-term shipping contracts, we can dive even deeper into the existing transportation commitments in a market area of interest. This analysis provides insight into shippers’ identification, volume commitments, contract durations, and tariff rate schedules. Long-term transportation contracts can be viewed through a variety of general or very specific lenses and the nature of a particular analysis depends on the goals of the market study being completed.
If the goal of a market analysis is simply to gain a better understanding of the contracted transportation volumes out of a particular region, for example, the result may look like the chart below, which demonstrates the long-term capacity on Transwestern from all receipt points in San Juan County, New Mexico.
The examples provided in each of the above sections are just a few of the many ways the ArboIQ team can conduct in-depth analyses of a particular market that you may be interested in. By examining shipping routes, throughput utilizations, tariff rates, and long-term shipping contracts, companies can gain valuable insights into competitive market dynamics, identify growth opportunities, and formulate effective strategies to achieve their business objectives.
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