As a brutal cold front sweeps across Texas and Louisiana, it has thrown a spanner in the works for U.S. liquefied natural gas (LNG) plants. This frigid onslaught has caused the lowest flow of LNG exports in a year, with energy companies being forced to divert fuel to the domestic market and encountering mechanical problems at Freeport LNG’s facility in Texas.
The data from LSEG revealed a significant impact on gas flows to the seven largest U.S. LNG export plants, which have plunged to an average of 13.9 billion cubic feet per day (cf/day) so far in January. This is a noticeable drop from the monthly record of 14.7 billion cf/day in December. Reuters reported this development on Thursday.
There was a slight improvement in LNG feedgas over the past two days, with an increase by 4.2 billion cf/day to reach 13.5 billion cf/day on Thursday. This came after a severe drop by 5.8 billion cf/day from January 13-16, hitting a one-year low of 9.2 billion cf/day on Tuesday, according to LSEG.
The ramifications of the freeze were also felt in the cancellation of at least one scheduled shipment from the Cameron LNG export plant in Louisiana, as reported by Bloomberg. Moreover, several planned deliveries from Cameron and Cheniere Energy’s Corpus Christi facility in Texas were delayed.
Notably, Freeport LNG’s liquefaction train 2 malfunctioned on Tuesday, and train 3 tripped on Wednesday. As a result, its loading schedule was also disrupted this week due to the inclement weather.
With next-day gas prices at the Henry Hub benchmark skyrocketing to a 22-month high of $13 per million British thermal units (MMBtu) earlier this week, some analysts conjecture that energy companies may have opted to sell gas supplies into the U.S. spot market rather than liquefying it for sale overseas, according to Reuters.
However, analysts believe the global market impact is likely to be contained, given the surplus gas inventories across Europe and Asia. Even as the U.S. grapples with supply disruptions, European Title Transfer Facility (TTF) benchmark gas futures plummeted this week to approximately $9 per MMBtu, marking a five-month low.