Golden Pass LNG Ramping Up During Wartime

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Moving to the commissioning phase just last month, Golden Pass LNG saw feed gas volumes reach a new high on Wednesday. Meanwhile, global volumes are down because of the war in the Middle East.

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New High for Golden Pass

Though total volumes remain somewhat suppressed, data show the newly commissioned Golden Pass terminal for exports of liquefied natural gas (LNG) set a record on Wednesday.

Golden Pass entered the commissioning phase, with feed gas running at around 303 million cubic feet on February 19. Natural gas to the facility started at a trickle earlier this year.

On Wednesday, IIR Energy reported in its NATGAS Today report that Golden Pass had processed 0.3 billion cubic feet, its all-time high so far.

U.S. federal regulators in mid-December gave joint venture partners ExxonMobil and QatarEnergy the green light to start operations from the first liquefaction unit, or train. With a total investment value of $3.8 billion, the facility will eventually churn out 5.2 million metric tons per annum (MTPA) of LNG.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the related project reports.

Total feed gas volumes, however, were below recent peaks above 19 billion cubic feet per day (Bcf/d). IIR Energy's natural gas market analyst Maria Sanchez in her daily report for Wednesday said feed gas was at 18.9 Bcf, up slightly from 18.86 Bcf on the previous day.

Feed gas volumes are recovering following a weekend outage at the troubled Freeport LNG facility, which can handle as much as 2.37 billion cubic feet per day (Bcf/d) in feed gas. Volumes on Wednesday were closer to 1.9 Bcf/d. Freeport LNG was short on specifics, only saying in a filing with the Texas Commission on Environmental Quality that three liquefaction units were taken offline "due to an issue."

Initially developed as an import terminal, the facility was converted for exports in the early 2010s as shale natural gas production picked up. It's been prone to operational issues since exports began.

At home, a week of warmer-than-average temperatures led to a decline in demand. Gas consumption for Wednesday was estimated at 74 Bcf, compared with a recent average closer to 80 Bcf/d for this time of year.

Henry Hub, the U.S. benchmark for the wholesale price of natural gas, was trading at around $3.10 per million British thermal units on Wednesday, only slightly higher than month-ago levels.

War Impacts Global LNG Supplies

The United States is the world leader in LNG exports, helping to ensure European energy security since the war in Ukraine saw Russian products sidelined by sanctions. Over the seven-day period ending March 5, the U.S. federal government said feed gas was around 148 Bcf, up 13 Bcf from the prior week.

That supported deliveries from 39 vessels laden with U.S.-sourced LNG, up four from the previous week. Most of those left the Sabine Pass terminal. Operated by Cheniere Energy, it's the largest facility by volume with a feed gas capacity of around 4.5 Bcf/d.

Those volumes will be needed now that Qatar declared force majeure on its LNG exports due to conflict raging in the Middle East, knocking out the No. 2 supplier behind the United States and creating supply-side challenges for import-dependent Europe.

On Wednesday, various media reports said Shell and TotalEnergies had also declared force majeure, a contractual clause freeing them from obligations due to circumstances beyond their control, on Qatari LNG deliveries.

The Dutch Title Transfer Facility (TTF), which serves as the European benchmark for the price of wholesale natural gas, was trading at $50.34 per megawatt-hour, up 57% since fighting began in the Middle East last week.

By the Numbers

• 1.9 Bcf/d in Freeport LNG feed gas below normal
• 0.3 Bcf for commissioning Golden Pass a new high

Key Takeaways

• U.S. LNG feedstock below recent highs
• Loss of Qatari supplies a growing concern

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).