2018 Southeast Agenda

•Natural gas exports outlook – LNG and Mexico
•US Natural gas exports will support US production growth
•LNG export utilizations will be driven by seasonal demand & price
•Mexican market growth driven by substitution and displacement
•Mexican natural gas infrastructure developments – or lack thereof

Natural gas prepayments have re-emerged as a viable gas purchasing strategy for municipal LDCs. After a hiatus of several years where market conditions made economic gas prepayment transactions difficult to complete, we have seen several successful closings in the last 9 months, including most recently the Black Belt Energy prepayment with J. Aron/Goldman Sachs that closed on March 9. An expert panel of experienced gas industry professionals who were involved in that transaction will discuss gas prepayments, what they are, how they work, who the joint action agencies are who do them, who the prepaid gas suppliers are in the market, how they work to help customers lower their gas costs while achieving long-term, reliable supplies, how customers have approached these opportunities, and what a customer needs to know if it is considering participating in one.

•Case study discussion of the structure of the deal with Greenville Utilities Commission. (GUC). Discussing the structure of the deal including pros/cons, risks, upsides, etc. and why GUC thought it made sense for them and whether other utilities should consider it.
•Pre-payment allows municipal utilities to use tax-exempt bond proceeds to prepay for natural gas.
•Savings are generated by the spread between the gas suppliers taxable discount rate and tax-exempt cost of capital, he said.
•The program creates a long-term gas supply with monthly price discounts and annual rebates and no bond or financial swap obligations.

The U.S. natural gas market has recently experienced a period of relatively low volatility, given its historically cyclical nature. As export capacity via LNG and pipelines to Mexico continues to increase, will we see the market enter a new paradigm of volatility, or will robust supply growth ensure the status quo?  A few key questions to consider: How has the relationship between rigs and production changed? As U.S. linkage to the global market increases, what other markets will impact global balances? As coal retirements continue and renewables generation increases, will power market responsiveness to price be impacted? 
 
Through all of this, the one thing that remains critical is the need for a robust risk management program, to weather these changing market dynamics.

This panel will examine the current and forecast supply/demand balance for the Southeast region, including price determination. Panelists will discuss influences contributing to market volatility and challenges to forecasting such as aging infrastructure, delays in new pipeline construction, pipeline capacity constraints, regulatory impacts, as well as economic and environmental constraints. The Panel will also discuss impacts from other regions and the role the Marketers play in creating market efficiencies.

We spend a lot of time contemplating the future, especially when that future seems to deviate demonstrably from our present. As new sources of natural gas supply have developed, the “center of gravitational productivity” has also geographically shifted to favor low-cost supply for that region. As we continue to watch the evolution of higher demand through exports, new industries, and shifts in the power stack, there is a strong likelihood that the tomorrow we envision might look quite different from what we’ve imagined. More importantly, through diligence and long hours, the long-term planning we’ve put in place might take an inconvenient shift. Regardless, let’s take another opportunity to “unsnap” our brains and look objectively at where we are and what might our future look like. The emergence of natural gas as a truly global fuel. The abundant supply that continues to provide surety of supply. The strategic advantage of having a Southeast US address, when that address is at the crossroads of rivers of supply streams. Finally, will we all have flying cars that fold up into a briefcase?

•Dominion Energy (Atlantic Coast Pipeline; Dominion Carolina; Cove Point; etc.)
•CenterPoint will discuss LNG and CNG as a temporary natural gas supply during gas interruptions, gas curtailments, new developments and critical winter peak demand coverage
•Kinder Morgan (Elba Island LNG & supporting pipeline infrastructure; etc.) 
•NextEra (Sabal Trail; Mountain Valley; Florida Southeast Connection; etc.) 
•Liberty Energy Trust & Northstar Industries has three major LNG Projects structured to provide LNG pretreatment, liquefaction, storage, vaporization, and liquid delivery services. LNG is available NOW

Please join our hosts, the Corporate Sponsors, at a cocktail reception in your honor. Don’t make your dinner plans too early as hors d’oeuvres and an open bar will be the highlight of this extremely well attended session!

-Mexico energy reform: What does it mean for the US?
-The evolving pricing fundamentals of the Mexican market.
-Political considerations, Mexico elections and Nafta.
-Updates on key export infrastructure projects.
-Near to mid-term demand outlooks for US exports to Mexico

Our gas buyer panelists will give you solid and valuable insight into what is currently working, what they have learned from volatility and what they will do differently next time.
1.Were there any developments this winter that caused you to look at commodity purchases, storage or firm transportation differently? Discuss how and why.
2.What kind of impact on the US natural gas market do you anticipate associated with residential, commercial, industrial, and/or power generation demand in the next 12-18 months?
3.How have exports impacted the current natural gas market?
4.Are the planned pipeline projects sufficient for the projected SE demand?
5.What do you expect the current FERC membership to mean for the development of interstate pipeline capacity and storage?
6.What buying or pricing strategies are you currently employing, for instance what if any long-term purchases are you making or how are you managing hedging activities? 
7.What are the important issues/challenges for your LDC/company/industry in both the short-term and the long-term? How will your LDC/company/industry meet these challenges?
8.How has the recent low-cost commodity environment impacted expectations of and communications with end-users and regulators?
9.What factors, other than price, influence your decision to choose one supplier over another?