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U.S. LNG export plants to ramp up natural gas use as Gulf Coast fog clears

(Reuters) - Natural gas flows to U.S. liquefied natural gas export terminals were expected to increase in coming days after collapsing to their lowest level in almost a year as fog clears along the Gulf Coast, according to analysts.

Analysts said the drop was due to maintenance work at the LNG terminals and the pipelines feeding them, and fog, which forced several vessels to drop anchor in the Gulf of Mexico.

Now that the fog is clearing, the tankers are starting to move, according to Refinitiv’s shipping data.

There are three LNG export terminals in the United States - Cheniere Energy Inc’s Sabine Pass in Louisiana and Corpus Christi in Texas, and Dominion Energy Inc’s Cove Point in Maryland.

Those three pulled just 1.5 billion cubic feet per day of gas from pipelines on Thursday, down from a record 5.5 bcfd on Jan. 5, according to Refinitiv.

One billion cubic feet of gas is enough to supply about five million U.S. homes for a day.

That was the lowest amount of gas going to the LNG terminals since late February 2018.

Most of the pipeline flow declines were at Sabine, which dropped from a record 3.9 bcfd in early January to 0.7 bcfd on Thursday, with most of that decrease in February, according to Refinitiv.

“Heavy fog, high winds and rough seas have been occurring along the Gulf Coast since Feb. 1, and many ports are experiencing traffic suspensions due to the weather conditions,” said Rishi Iyengar, senior analyst natural gas markets at IHS Markit’s OPIS PointLogic.

“With vessel traffic at a standstill, liquefaction activity appears to have been ramped down drastically,” Iyengar said.

In a notice to customers, Sabine Pilots said they expect to resume work on Thursday after suspending service from Feb. 1-6 due to fog.

Those suspensions left seven LNG tankers stuck in the Gulf of Mexico, according to Refinitiv’s map.

Cheniere said it does not comment on operations.

Flows into Corpus, meanwhile, dropped to near nothing since reaching 0.75 bcfd in mid-January. Energy data provider Genscape said deliveries to Corpus are starting to recover after a three-week outage.

“While we aren’t sure the reason for the (Corpus) shutdown, it’s not uncommon for LNG facilities to shut shortly after they begin service,” Genscape said. Corpus started up in December.

Flows into Cove Point, meanwhile, have mostly held around 0.75 bcfd since November, according to Refinitiv.

Reporting by Scott DiSavino; editing by Dan Grebler and Lisa Shumaker

Copyright © 2019. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

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