Maintenance Curbs U.S. LNG Activity

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

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Summary

Regular maintenance has curbed the feedstock available for LNG exports. This comes as global markets are tightening in response to war in the Middle East.

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A Slump in U.S. Feed Gas

Though U.S. natural gas markets are largely insulated from the war in Iran, an uptick in pipeline maintenance is curbing the export potential for liquefied natural gas (LNG), data show.

Rich in shale natural gas, U.S. markets are beholden more to recent weather events than war in the Middle East. The price for Henry Hub, the U.S. benchmark for the price of natural gas, was trading relatively flat before the start of trading Tuesday on Wall Street. The price at the Dutch Title Transfer Facility (TTF), the European benchmark, was up 5.3% in pre-market action amid a regional supply crunch.

Qatar, one of the largest exporters of LNG in the world, has idled production because of the war. In the U.S., production estimates showed slight declines in output because of limitations in midstream networks, data from Industrial Info show.

On Tuesday, Industrial Info in its NATGAS Today report showed feed gas down about 1.1 billion cubic feet per day (Bcf/d) from the five-day average of about 19 Bcf/d.

"Creole Trail pipeline, a key header system serving Sabine Pass, is conducting one-day pigging maintenance," the report read.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can learn more about Sabine Pass--including capacities, investment values and necessary equipment--from a detailed project report.

Sabine Pass, operated by Cheniere Energy, is the largest export terminal for LNG by volume. Feed gas levels were about 4.3 billion cubic feet on Tuesday, compared to a five-day average of about 5 Bcf/d. As a result of lower feed gas volumes and routine pipeline maintenance, Industrial Info revised its production estimate down about 3% from the inland five-day average to around 108 billion cubic feet on Tuesday.

The U.S., which is the largest exporter of LNG in the world, has been supporting global energy security at least since 2022, when the onset of the war in Ukraine saw legacy supplier Russia sidelined by international sanctions. While export levels are above federal estimates, the U.S. can't make up for the loss of Qatari molecules alone.

By the Numbers

• 1.1 Bcf/d slump in feed gas
• 20% expansion slated for Elba Island

More Help on the Way?

Golden Pass is the latest LNG facility to enter the commissioning phase. Natural gas to the facility started at a trickle earlier this year.

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 eventually will churn out 5.2 million metric tons per annum (MTPA) of LNG, considered relatively small when compared to Sabine Pass with its 49.9 million MTPA.

Elsewhere, federal regulators on Friday gave Kinder Morgan permission to expand operations at the Elba Island export facility for LNG off the coast of Georgia by about 20%.

"At a time when global energy supply routes face disruption, the United States remains a reliable energy partner to our allies and trading partners," said  Kyle Haustveit, the DOE's Assistant Secretary of the Hydrocarbons and Geothermal Energy Office.

Elba Island is designed for 2.5 million MTPA. No timeline was offered for the expansion.

Subscribers can learn more about Elba Island from a detailed plant profile.

Key Takeaways

• Maintenance limiting LNG export potential
• Elba Island slated for expansion

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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 News Intelligence) 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 more than 250,000 current and future projects worth $30.2 trillion (USD).