NATGAS: NFE’s Altamira Fast LNG Onshore Plans Dashed by Mexican Regulatory Body
Mexico’s National Energy Commission (CNE) denied New Fortress Energy’s Mexico Fast LNG Onshore project a critical pipeline permit, citing technical inconsistencies in the application that did not meet regulatory standards, per Mexico Business News
- This setback affects the onshore liquefaction component of NFE's expansion plans, putting the integration of its gas supply and land-based logistical planning on hold. It does not, however, affect the status of Fast LNG 1, NFE’s FLNG already in operation and holding a valid US export authorization.
- The action introduces uncertainty for investors and reflects a stricter regulatory environment in Mexico as the country attempts to balance natural gas expansion with increased domestic availability.
- The delay occurs as Mexico becomes a critical transit corridor for North American LNG as it tries to turn from dependent importer to a global hub with access to the Pacific and Atlantic Oceans.
- The facility was to be supplied with US gas via Sur de Texas, which interconnects with Valley Crossing in the US. Valley Crossing can be seasonally full but there would have been unutilized capacity to flow more US gas to the LNG facility.
- Valley Crossing originates in Agua Dulce, with interconnects with TETCO, Transco, TGP, and NGPL as well as Texas Intrastates. To the degree that incremental US production was going to supply this facility, it will need to find a new demand source.
- Rio Grande LNG is currently planned for ~4.0 Bcf/d of capacity. The facility will be supplied by the 4.5 Bcf/d Rio Bravo Pipeline, which is expected to interconnect with Blackcomb which is only 2.5 Bcf/d. Potentially some of the gas that would have supplied Altamira could instead flow to Rio Grande.
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NEW ZEALAND: Unemployment Rate Forecast To Rise Again, Nov Easing Likely
The key event in NZ this week is the Q3 labour market and wages data released on Wednesday. Filled jobs for the quarter signal a stabilization but employment is likely to have remained weak with consensus forecasting it to rise only 0.1% q/q to be still down 0.2% y/y. The unemployment rate is expected to rise 0.1pp to 5.3%, in line with the RBNZ’s August projections. Soft labour demand is likely to weigh on private wage growth which is forecast to rise around 0.4% q/q after 0.6%.
- The RBNZ’s biannual financial stability report is also published on Wednesday. It is likely to be concerning if it shows an increase in mortgage arrears despite recent easing.
- In terms of housing data, October Cotality home values and September building permits are released Monday. The construction sector has lagged the rest of the economy but the ANZ business survey is showing some recovery.
- October ANZ commodity prices are released on Wednesday. They fell 1.1% m/m in September.
AUSSIE 10-YEAR TECHS: (Z5) Returns Lower
- RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
- RES 2: 95.960 - High Apr 7 (cont.)
- RES 1: 95.900 - High Oct 17
- PRICE: 95.670 @ 16:16 GMT Oct 31
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures slipped lower Wednesday on the back of hotter-than-expected Australian inflation. This returned prices lower despite nascent signs of a technical recovery as recently as last week. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.
AUSSIE 3-YEAR TECHS: (Z5) Struck by Strong CPI
- RES 3: 97.796 - 1.618 proj of the Sep 3 - 12 - 15 price swing
- RES 2: 96.780 - High Jun 26 (cont)
- RES 1: 96.700 - High Sep 12
- PRICE: 96.375 @ 16:13 GMT Oct 31
- SUP 1: 96.280 - Low May 15 (cont.)
- SUP 2: 95.900 - Low Jan 14 (cont.)
- SUP 3: 95.760 - Low 14 Nov ‘24
Having bounced well on the back of the mild US CPI print, Aussie 3-yr futures reversed course Wednesday on strong domestic inflation data containing RBA cut pricing through 2026. This keeps prices well below prior resistance at 96.615, the Sep 12 high, and refocuses attention on 96.280 as the next major support.
