Temperatures plummeted across the U.S. over the Martin Luther King Jr. holiday weekend and the cold weather continued into this week. U.S. LNG feedgas, which was above 14 Bcf/d prior to the cold snap, dropped as low as 8.5 Bcf/d. Feedgas to all U.S. terminals fell, with the bulk of the impact seen on January 15 and 16. Feedgas to most of the U.S. Gulf Coast terminals has since rebounded to at least full-utilization, if not winter peak-operating levels. Freeport is still operating below full utilization, although flows to the terminal are recovering. Flows to Freeport began dropping on January 14 and were below 1 Bcf/d from January 15 to 19. Trains 2 and 3 both tripped offline briefly during the cold weather, according to filings with Texas State regulators, which potentially explains why Freeport feedgas has been slower to rebound compared to other Gulf Coast terminals. Additionally, flows are still below full utilization at the two U.S. East Coast terminals, Cove Point and Elba, where the cold weather lingered longer than on the Gulf Coast. Temperatures are expected to rise considerably this week, which should allow normal operations to resume at the terminals.
Featured Articles
Better Days - U.S. LNG Feedgas Rebounds as Spring Maintenance Season Rolls Off
Global gas prices have had a record-breaking year so far, with JKM in Asia hitting all-time seasonal highs in spring, and TTF in Europe last week reaching the highest level since 2008. Prices have been spurred on by a global LNG market that is undersupplied and hunting for additional cargoes. If you were just looking at U.S. feedgas levels over the past several weeks, though, you would never know that we are in the middle of an incredible bull run. U.S. LNG feedgas deliveries have trailed below full-utilization levels for more than a month due to a combination of spring pipeline maintenance, LNG terminal maintenance, and operational issues. The reduced availability of pipeline and liquefaction capacity led feedgas deliveries in June to average 9.35 Bcf/d, or about 85% of full capacity. However, this was just a small and short-lived setback before what is likely to be a breakthrough summer for U.S. LNG. Feedgas demand is already back above 95% utilization and is poised to head even higher over the next few months both from new liquefaction capacity coming online and potentially from spot market cargo production. In today’s blog, we take a look at the impact of spring maintenance on U.S. LNG production and potential feedgas demand growth in the months ahead.
Dizzy - U.S. LNG Feedgas Volumes Swing Wildly Ahead of Peak Winter Demand
Total U.S. LNG export capacity is around 12 Bcf/d, including the still-commissioning-but-nearly-complete Calcasieu Pass. About 13.5 Bcf/d of U.S. natural gas supplies, or feedgas, is required to produce that much LNG, but feedgas demand has averaged just 10.5 Bcf/d over the past week despite still-soaring global gas prices and an undersupplied global LNG market. Two U.S. terminals are currently offline: Freeport LNG, which has been out of service since an explosion and fire in June, and now Cove Point LNG, which shut for annual maintenance October 1. Beyond those outages, which have taken about 2.75 Bcf/d of demand out of commission, LNG feedgas volumes have been extremely volatile, swinging as much as 2 Bcf/d within a week. Don’t expect this to last, however — with winter approaching, the return of both Freeport and Cove Point on the horizon, and the full startup of Calcasieu Pass in sight, feedgas demand will likely rise to new heights and soon consistently top 13 Bcf/d. In today’s RBN blog we take a closer look at the recent volatility in LNG feedgas and the potential demand coming this winter.
