Houston — Several natural gas infrastructure companies on Thursday said they were slowing or ceasing infrastructure construction projects and taking other safety measures at their sites in preparation for the arrival of Hurricane Florence.
Hurricane Florence was forecast to make landfall near the border of North Carolina and South Carolina, either late Thursday night or in the early morning hours of Friday, "kicking off an agonizing crawl through the Southeast," according to a Weather Channel report Thursday afternoon.
After drenching much of the southeastern US with torrential rains, which are expected to result in a destruction of demand for gas, the storm's forecasted path could take it into the gas-producing region of southwestern Appalachia within the next several days.
INFRASTRUCTURE IMPACTS
Kinder Morgan will cease construction activities at its $2 billion liquefaction plant project at the Elba Island LNG Terminal in Georgia in advance of the arrival of Hurricane Florence, the company said in a statement Thursday. The Elba Island LNG Terminal itself will remain in operation, the company said.
Kinder Morgan said other company assets in Florence's path that are likely to experience partial or temporary shutdowns during the storm include its liquids and bulk terminals along the coasts of South Carolina, North Carolina, Virginia and Georgia.
Pipeline assets expected to remain operational include the Elba Express pipeline, the Southern Natural Gas system and the Plantation Pipe Line system.
Construction on the 2.5 billion mt/year Elba Liquefaction Project, which will add liquefaction capability to the existing LNG import and regas terminal, began on November 1, 2016. Kinder Morgan said in July that initial in-service of the export facility was expected in the fourth quarter, with final units slated to come online by the third quarter of 2019.
The company's hurricane preparations include securing buildings and warehouses, isolating power systems and removing operations personnel to ensure their safety and to ensure that qualified personnel are able to resume operations following the storm.
At its LNG exporting terminal at Cove Point, Maryland, Dominion Energy said it "has activated its severe weather preparation and response plan in anticipation of high winds and heavy rain expected this week."
In addition, Dominion, which is building the 1.5 Bcf/d Atlantic Coast pipeline to carry gas from the Appalachian Basin to North Carolina, "is preparing for heavy rainfall across the region and taking all necessary precautions," spokesman Aaron Ruby said in a statement.
The company has "reinforced environmental controls and stabilization measures at our worksites, and we'll continue monitoring them closely throughout the storm," he said.
The 600-mile pipeline will originate in West Virginia, travel through Virginia with a lateral extending to Chesapeake, Virginia, and then continue south into eastern North Carolina.
The developers of the 300-mile Mountain Valley Pipeline "have halted the advancement of construction in Virginia until the storm passes and are focused on stabilization of the right-of-way, and maintenance and enhancement of erosion controls," according to a Mountain Valley Pipeline statement.
"Welding of pipe, lowering of pipe into existing open trenches, and backfilling of trenches will continue as long as possible in order to maintain and enhance overall stabilization," a spokesman said.
The 2 Bcf/d capacity project, which will run from northwestern West Virginia to southern Virginia, is being built by a joint venture led by EQT Midstream.
PRICES
When large storms such as Florence make landfall, demand destruction typically follows, which in turn leads to a decline in natural gas prices.
That was seen Thursday at pricing points that would feel the biggest impact of the storm, according to Platts pricing data.
Transco Zone 5 North and South were each trading at $2.93/MMBtu after dropping about 7 cents.
SUPPLY AND DEMAND
Overall demand in the Northeast was estimated by S&P Global Platts Analytics to drop by 373 MMcf/d to 15.121 Bcf/d Friday. For the weekend, demand was forecast to average 14.588 Bcf/d.
Based on evening cycle nominations for gas day 13, the initial blows to demand from Hurricane Florence have been relatively minimal, with total sample demand across North Carolina, South Carolina, Virginia and Georgia falling a combined 300 MMcf/d to average 6.2 Bcf/d on the day.
Declining temperatures will likely remain the main driver for initial declines this week as power plant deliveries made up 200 Bcf/d of declines for Thursday, Platts Analytics data shows.
