Houston—US LNG feedgas demand rebounded Feb. 19 to levels seen before the lowest temperatures in decades caused disruptions in pipeline flows to Gulf Coast export terminals and reduced services along shipping lanes, S&P Global Platts Analytics data showed.
With warmer weather ahead, the prospect was high for a further ramp-up, as equipment continues to thaw out and access to supplies strengthens.Prior to the freeze that led to widespread power outages in Texas and Louisiana, global LNG supply had gradually recovered since the extremely challenged export levels at the start of the year.
Platts JKM for April was assessed up 16.2 cents/MMBtu day on day at $6.45/MMBtu Feb. 19 on higher pricing indications. Moving through March and into the spring, tightness in Northeast Asia should continue to subside and prices are expected to continue to soften, according to Platts Analytics.
The operational disruptions due to the weather caused US feedgas demand to bottom out at 2.2 Bcf/d on Feb. 16, the lowest level in two years. On Feb. 19, feedgas deliveries totaled 5.9 Bcf/d, up sharply from 4.1 Bcf/d the day before.
The gains were largely driven by higher utilization at Cheniere Energy's Sabine Pass terminal in Louisiana and Corpus Christi terminal in Texas, as well as at Sempra Energy's Cameron LNG facility in Louisiana.
At Freeport LNG, south of Houston, feedgas demand was still very low, after Texas Governor Greg Abbott asked the terminal to pull back operations and limit energy consumption, allowing for more energy to remain on the Texas grid to meet heating demand.
At the height of the freezing weather, pipeline deliveries to the export facilities were hampered as operators declared various force majeures due to horsepower issues at compressor stations. There were also pilot service suspensions along the channels that serve the terminals.
US LNG offtakers such as BP, Mitsui and Pavilion were heard covering shorts for March cargoes due to the US supply disruptions.
The recent dip was not expected to impact feedgas demand in March, with the Platts Analytics forecast at 10.5 Bcf/d. That would still be below the Dec. 13, 2020, record of 11.58 Bcf/d.
Outside of major weather events, North American gas demand growth is being driven primarily by feedgas demand growth for LNG exports.
