Ida's track spares US Gulf Coast LNG facilities mindful of Laura's 2020 disruptions

A year after Hurricane Laura shut down US liquefaction facilities in southwest Louisiana, knocking out power to Sempra's Cameron LNG for more than a month, the terminals were able to keep operating through a similar intensity Ida.

Production continued at Cameron LNG and at Cheniere's Sabine Pass, though some shipments along the US Gulf Coast faced disruptions.

Together, the two facilities have the capacity to produce over 40 million mt/year of LNG from eight liquefaction trains.

Related content

US LNG cargo shipments to Japan may be delayed from hurricane: METI

Bulk of oil, gas production remains offline as E&Ps anticipate platform inspections

Ida shuts Entergy's Waterford-3 nuclear plant because of off-site power loss

Feedgas levels remained relatively steady during the time period surrounding Ida's Aug. 29 landfall near Port Fourchon, south of New Orleans. Total US LNG feedgas demand stood at 10.2 Bcf/d on Aug. 30, down only about 200 MMcf/d from a week earlier, S&P Global Platts Analytics data shows. Fluctuations during the week were more likely due to lifting schedules or scheduled pipeline maintenance than the storm.

For days, forecasts showed that Ida would possibly impact Cameron LNG and Sabine Pass with storm surge caused by what turned out to be 150 mph maximum sustained winds. Eventually, Ida tracked too far eastward to cause any wind or storm surge damage at the facilities.

It was a much different story during the same week in 2020 when Laura, also packing 150 mph winds, came ashore close to the two facilities.

Cameron LNG's three trains were shutdown Aug. 26, 2020, the day before Laura caused widespread damage in southwest Louisiana. Following that storm, Cameron LNG did not ship another cargo until Oct. 5, 2020. The facility remained offline so long largely because of damage to power infrastructure operated by utility Entergy that the terminal relies on to run its trains.

Sabine Pass also shut down ahead of Laura, though a week later it began to put in plans to restore operations after finding no significant damage at the facility.

Both operators monitored Ida closely, though neither appears to have ultimately reduced production because of it. The channels that feed both facilities also stayed open over the weekend, and were both operating normally Aug. 30, according to notices to shippers.

While US Gulf Coast LNG production kept going during Ida's march to Louisiana, some shipments were expected to be delayed. Tankers waiting in the Gulf of Mexico to come in to load and others leaving the facilities with loads had to wait for Ida to pass before heading east into the Atlantic or south through the Panama Canal and West to Asia.

Due in part to those supply uncertainties, spot LNG prices in the Asia-Pacific region rose further Aug. 30, with the Platts JKM for October assessed at $18.675/MMBtu. US LNG cargo shipments from Cameron LNG and Freeport LNG, south of Houston, to Japan may see "some delays" from Ida, an official from the country's Ministry of Economy, Trade and Industry told Platts.

Cflow, Platts' vessel-tracking software tool, showed one tanker moored at Sabine Pass on Aug. 30. The LNG tanker La Seine left Cameron LNG on Aug. 28, cFlow showed. The LNG tanker Golar Snow departed Sabine Pass on Aug. 29. Five LNG tankers departed Freeport LNG in the week surrounding Ida's landfall.

Henry Hub

The resilience in US Gulf Coast LNG feedgas demand has helped keep regional spot gas prices elevated, despite widespread power outages in central and southeast Louisiana.

In the week leading up to Ida making landfall, spot gas prices in the US Southeast soared as offshore rigs in the Gulf of Mexico were evacuated and LNG feedgas demand continued unabated. Platts Analytics data shows that offshore gas production plunged more than 2 Bcf/d to around 850 MMcf Aug. 27 from 2.95 Bcf on Aug. 24, while LNG feedgas demand remained above 10 Bcf/d. Cash Henry Hub gained 42 cents over those four trading sessions to reach a six-month high of $4.32 on Aug. 27.

With offshore gas production down at 236 MMcf/d on Aug. 30, Southeast spot gas prices retained most of their recent gains in that day's trading for next-day flows. Cash Henry Hub shed 13.50 cents to reach $4.205/MMBtu, according to preliminary settlement data. Despite the downward movement, most Southeast spot gas prices remained above $4/MMBtu.