Hurricane Beryl weakened after coming ashore in Texas early Monday and was downgraded to a tropical storm after it disrupted some LNG feed gas demand along the U.S. Gulf Coast.
Beryl made landfall as a Category 1 hurricane between Houston and Corpus Christi, bringing with it storm surge, damaging winds and flooding rainfall. Ahead of its arrival on Sunday, Freeport LNG Development LP shut down its export facility, cutting feed gas demand there from 1.6 Bcf/d to nearly zero before Beryl made landfall about 40 miles to the northeast.
Spokesperson Heather Browne said the facility would return to service when it’s “safe to do so.” Unlike other liquefied natural gas facilities along the Gulf Coast, neither Freeport nor Sempra Infrastructure’s Cameron facility have their own power supply and instead rely on the grid. In the Houston area alone, CenterPoint Energy Inc. said Monday that power service for more than 2 million people had been impacted by the storm.
Overall, U.S. LNG feed gas demand was estimated at 11.2 Bcf/d on Sunday and 11.1 Bcf/d on Monday, down from 12.9 Bcf/d on Saturday, according to Wood Mackenzie.
Cheniere Energy Inc. spokesperson Stephanie Knapik said the company implemented its severe-weather preparedness plan at the Corpus Christi LNG terminal in South Texas, which was also in the path of the storm.
Knapik said Monday morning that LNG production was not interrupted at the terminal, but non-essential personnel had been sent home. She added that there was nothing to report at the company’s Sabine Pass plant in Louisiana despite tropical storm and storm surge warnings issued by the National Hurricane Center (NHC) for the area.
NHC said Beryl would move over eastern Texas on Monday, then move through the Lower Mississippi Valley into the Ohio Valley on Tuesday and Wednesday. The storm is expected to continue weakening and become a post-tropical cyclone on Tuesday.
The U.S. Coast Guard declared “Zulu” condition along parts of the Gulf Coast on Sunday, which prompted the ports of Corpus Christi and Freeport to close, along with others in Texas. Kpler vessel-tracking data showed Monday morning that there were no LNG tankers anywhere along the Texas Gulf Coast. Three vessels were floating offshore Louisiana away from the storm’s path, while another three were docked at Sabine Pass.
The passing threat to U.S. LNG supplies tempered international natural gas prices on Monday, but both the Japan-Korea Marker and the Dutch Title Transfer Facility (TTF) remained near $12/MMBtu and $10, respectively. Hotter weather in Asia has increased demand in the region and created more competition for cargoes.
But with a mixed forecast this week in Europe calling for cooler weather in the northwest and heat in the southeast, along with strong exports from Norway and healthy storage stocks, TTF fell nearly 3% to finish just above $10 on Monday.
“The main story is still the fact that Europe is well-supplied, and that the summer has so far not offered any major heat waves to trigger an increase in demand,” said trading firm Energi Danmark.
Meanwhile, in Asia, spot buying was steady over the past week as heat continued to grip most of the region. Bangladesh, India and Thailand all closed spot tenders.
LNG stockpiles in Japan, however, have been strong. Japanese power generators increased volumes by nearly 1% to 2.09 million metric tons (mmt) on June 20 from a week earlier. That’s above the five-year average of 2.01 mmt.
In the United States, August Henry Hub futures gained five cents in trading on Monday to finish at $2.36 as weather forecasts turned hotter and U.S. LNG exports were expected to quickly rebound after Beryl.
“Traders will likely wait to assess damage from Beryl,” EBW Analytics Group analyst Eli Rubin said. “If no lasting damage occurred, a relief rally is overdue for technically oversold [New York Mercantile Exchange] gas.”
Elsewhere last week, the 11.4 mmt/year (mmty) Tangguh LNG export terminal in Indonesia returned its second train to service after it tripped offline late last month.
Tangguh’s return was partially offset by reports that Russia’s 10.8 mmty Sakhalin-2 LNG terminal started maintenance last month and was not expected to be back online until the end of July.
In the United States last week, the Glenfarne Energy Transitions LLC’s 4 mmty Texas LNG project said it signed a tentative agreement to supply an unnamed buyer with 0.5 mmty of the super-chilled fuel. The project is expected to reach financial close and start construction this year. It has signed tentative agreements to supply more than half of its permitted capacity.
