Gulf Coast liquefied natural gas (LNG) export operations were again near a standstill on Thursday as plants were working to comply with Texas Gov. Greg Abbott’s order banning out-of-state gas sales and handling issues related to an Arctic blast that’s still gripping the region.
Just one LNG vessel has been loaded on the Gulf Coast this week, according to ClipperData. The Seri Balhaf departed Freeport LNG on Quintana Island, TX, Wednesday headed for Mexico, which is dealing with an energy crisis of its own due to a lack of gas supplies from Texas. The last time LNG loadings were disrupted for days in the region was in October after Hurricane Delta touched down, said ClipperData’s Matt Smith, director of commodity research.
Data intelligence firm Kpler said 12 LNG vessels were floating in the Gulf of Mexico at midday Thursday, up from nine on Wednesday. Two vessels have diverted away from the Gulf Coast. The Gaslog Gibraltar is now headed for Bonny LNG in Africa and the Patris is headed for Atlantic LNG in Trinidad and Tobago, Kpler economist Reid I’Anson told NGI.
Cheniere Energy Inc., the largest U.S. exporter and natural gas buyer, said its Corpus Christi LNG terminal in South Texas is currently offline in an effort to curb power and natural gas consumption. The Sabine Pass LNG terminal in Louisiana is operating, said spokesman Eben Burnham-Snyder.
“Cheniere is working with state and local officials, monitoring real-time information, and working with our partners to manage operations through this severe weather event, while moderating our electricity consumption and seeking opportunities to provide natural gas to utilities and others to help our neighbors in the region,” he said.
Cameron LNG in Louisiana was also still waiting to restart operations after losing power earlier in the week that’s since been restored. Freeport LNG is operating just one of three trains.
When asked about how Abbott’s order might impact Cheniere, the company had no comment, but it moved to curtail energy use prior to the order. Gulf Coast LNG terminals receive feed gas from dozens of pipelines that move natural gas from various producing regions across the United States.
Feed gas deliveries to U.S. terminals stood at 5.52 Bcf early Thursday. Those could fall, however, as feed gas volumes on Tuesday and Wednesday were revised lower after late-cycle nominations, according to NGI data.
Matthew Lewis, senior director of research at East Daley Capital Advisors, said pipeline nominations out of Texas show significant flows into Mexico. Jack Weixel, senior director for the Gas, Power and Energy Futures practice at IHS Markit said Thursday on Enelyst that some gas is also still flowing from Texas to the Midcontinent. It wasn’t immediately clear Thursday what types of gas customers might be able to transport out of the state, Lewis told NGI.
While some have questioned the legality of Abbott’s order since he issued it late Wednesday, most will likely comply given that it only lasts until Sunday, said Michael Krancer, principal at consultancy Silent Majority Strategies LLC and a former secretary of the Pennsylvania Department of Environmental Protection, who also practiced energy law.
“It’s a legal question and it could violate the commerce clause, but I think it’s more of an academic question unless it goes on beyond Sunday,” he told NGI.
“There’s a lot of things governors can do and entities in the state will comply with the request and not put any gas out, Krancer added. “It’s an interesting move by the governor, I can understand where he’s coming from.”
More than 400,000 people were still without power in Texas on Thursday and over 100,000 were without it in Louisiana, according to Poweroutage.us. Temperatures along the Gulf Coast are expected to move above freezing by the weekend, when natural gas demand is expected to fall.
Both the Port of Freeport and the Calcasieu Ship Channel that feeds Cameron LNG are open. Pilot Service was also expected to resume Thursday at the Sabine-Neches waterway feeding Sabine Pass LNG.
The Port of Corpus Christi wasn’t sailing vessels Thursday due to limited visibility caused by fog. Fog is also expected to impact the port over the weekend, Moran Shipping said in a notice.
Prices in North Asia stopped falling on Wednesday and held Thursday as traders continued to assess the impacts of U.S. LNG outages. Meanwhile, prices were up in Europe Thursday.
“A tighter LNG market outlook continues to prop up European gas markets during today’s trading,” said Schneider Electric analyst Balint Balazs in a note Thursday.
He said six U.S. cargoes will arrive at UK ports over the next week. But he added that deliveries going forward are likely to drop sharply from the U.S.
“At this point, it is unclear how fast U.S. LNG exports will be able to return to previous levels. Forecasts indicate temperatures should improve to normal within a week, but there are concerns around possible damages in infrastructure.”
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 | ISSN © 1532-1266 |