TOPIC PAGE: Hurricane Laura impact on energy markets

HOUSTON (ICIS)–As Hurricane Laura made landfall this week, numerous LNG export plant and refinery operations were disrupted as producers made preparations ahead of the storm.

Follow this Topic Page to stay up to date with the latest insights and breaking-news updates on the impact from Hurricane Laura on the oil, gas and LNG markets.

LATEST UPDATES

2 Sep 2020 10:24

SHIPPING ALERT: Sabine pilots attempted to resume traffic with deep draught vessels early this morning but were anchored soon after due to concerns over passing salvaging operations, according to a ship advisory. Feedgas to US Sabine Pass remains at zero today, as well as at Cameron LNG, as operations have been suspended since last week.

1 Sep 2020 22:04

Outages at Sabine Pass, Cameron remain ongoing as waterways stay closed

Ruth Liao

HOUSTON (ICIS)–Market sources continued to monitor reports of when large vessel access could resume to the Sabine-Neches and Calcasieu waterways, which lead up to Sabine Pass and Cameron LNG, respectively.

As of 1 September, both plants remained shut since operations were suspended one week ago in advance of Hurricane Laura.

Operations have not resumed given the amount of debris and damage caused by the hurricane, which made landfall on 27 August.

On 1 September, small vessels have been given limited access to the Sabine waterway but larger vessels are still restricted pending an assessment of deep draft channels, according to the US Coast Guard’s latest marine safety bulletin.

Reports of a sunken drydock obstructing access to Port Arthur were heard, but sources said this appeared to be located north of Cheniere’s jetties at Sabine Pass. However, the Calcasieu waterway remains closed. Earlier marine notices mentioned salvage efforts in Lake Charles for smaller vessels that had become semi-submerged.

SITE IMPACT

Details at both Sabine Pass and Cameron LNG also were not made public, although US operators Cheniere and Sempra each issued statements on 31 August stating that restart efforts were underway.

A Cheniere spokeswoman said on 1 September that the company declined to comment on details at Sabine Pass.

Market sources said lack of general road access to Cameron LNG, located in Hackberry, Louisiana, is also hindering restart efforts.

In the Lake Charles region, widespread power and water supply outages at other facilities have been reported to the US Coast Guard. Data by Louisiana power provider Entergy show ongoing outages in Hackberry and areas north of Cameron.

A Cameron LNG spokeswoman did not respond to requests on power and water supply at the site before publication.

However, sources said since both Sabine Pass and Cameron LNG rely on gas-fired turbine generation, rather than relying on electric drive turbines such as at Freeport, both sites would not necessarily have a great reliance on the local power grid.

1 Sept 2020 12:26

SHIPPING ALERT: Salvaging and recovery efforts continue at the Sabine-Neches and Calcasieu waterways leading up to Sabine Pass and Cameron LNG, respectively. Both LNG plants have remained down as a result of debris and damage caused by Hurricane Laura to the region’s waterways.

31 Aug 2020 21:53

US LNG plants begin restart process following Hurricane Laura

Fauzeya Rahman

HOUSTON (ICIS)–Production at US Sabine Pass and Cameron LNG remained down on 31 August but both operators made statements that plans to resume operations were starting.

US-based Cheniere announced 31 August it has begun its plan to restart Sabine Pass in Louisiana, nearly a week after suspending operations in advance of Hurricane Laura.

Laura made landfall early on Thursday morning in Louisiana, close to the state’s border with Texas. It was a category 4 storm with maximum sustained wind speeds of 150 miles/hour (240 km/hour). Early assessments show that several liquefaction plants in the region experienced very minor damage, but Sabine Pass and Cameron operations were down because of disruptions to related infrastructure.

A shipping notice said approvals are pending from the US Army Corps of Engineers and the US Coast Guard to reopen Sabine-Neches, as cleanup efforts took longer than expected.

The Calcasieu waterway to Cameron LNG also remains closed due to debris. Sources said recovery efforts could take longer at the Calcasieu than at Sabine, as there were reports of downed power lines in the Calcasieu.

PIPELINE UPDATES

Cheniere also said in a 30 August notice its US Creole Trail pipeline, one of the pipelines that feeds into Sabine Pass, will return to service 31 August with 0.9 billion cubic feet (bcf)/day at the Gillis Compressor Station. The developer declared force majeure on the pipeline on 26 August.

Meanwhile Sempra said in a 31 August statement that operations at Cameron would restart as soon as it was safe.

One market source said road access to Cameron LNG also remained limited.

Sempra issued a separate notice stating its force majeure declaration on the Cameron Interstate Pipeline that flows to Cameron LNG has been terminated, effective 1 September. Sempra said operating conditions remained in “alert mode” in the pipeline notice.

CONSTRUCTION RESTARTS

Construction in the US Gulf on expansion and greenfield projects also appeared to be resuming at some sites.

Cheniere also said on 31 August its engineering, procurement and construction (EPC) contractor Bechtel also resumed construction work for its Train 6 at Sabine Pass.

Golden Pass LNG, which is currently constructing a three-train liquefaction plant in Sabine, Texas, said its project construction was back on track 31 August after completing an initial site assessment. The assessment revealed no significant storm-related impact.

Developer Venture Global did not immediately respond to a request for comment on its construction status of the planned 10mtpa Calcasieu Pass project in Lake Charles. Venture Global said on 27 August that the site appeared to have minimal damage from the hurricane.

Sempra also stated that its greenfield Port Arthur site in Texas has been evaluated as well.

31 August 2020 15:05

INFRASTRUCTURE ALERT: US-based Cheniere announced its US Creole Trail pipeline, one of the pipelines that feeds into Sabine Pass, will return to service today with 0.9 billion cubic feet (bcf)/day at the Gillis Compressor Station. The developer declared force majeure on the pipeline on 26 August in advance of Hurricane Laura’s arrival.

31 August 2020 10:08

INFRASTRUCTURE ALERT: Cheniere said in a statement today that the company has started on its plan to restart Sabine Pass. Operations were suspended on 25 August, nearly a week ago, in advance of Hurricane Laura. Sempra also said in a statement earlier today that operations at Cameron would restart as soon as it was safe.

31 August 2020 9:43

SHIPPING ALERT: Waterways to Cameron LNG and Sabrine Pass remain closed this morning. A shipping notice said approvals are pending from the US Army Corps of Engineers and the US Coast Guard to reopen Sabine-Neches, as cleanup efforts took longer than expected. The Calcasieu waterway to Cameron LNG also remains closed due to debris. Sources said recovery efforts could take longer than at Sabine.

28 August 2020 11:02

SHIPPING ALERT: Market sources said some vessels that were originally due to load at Sabine Pass in Louisiana will be diverted to US Corpus Christi while Sabine Pass remains down. The 155,000cbm Gaslog Shanghai and the 139,000cbm Golar Arctic are both heading towards Corpus Christi.

28 August 2020 10:51

SHIPPING ALERT: The 177,000cbm Sohshu Maru has arrived at US Corpus Christi, which would be the first loading from the US Gulf in five days since 23 August. Sources said it is likely that swaps would take place during the outages at Sabine Pass and Cameron.

27 Aug 2020 23:38

Following Hurricane Laura, US LNG shipping delays expected

Ruth Liao

HOUSTON (ICIS)–Shipping delays are expected from Cheniere’s Sabine Pass and Cameron LNG in Louisiana as both US LNG export plants remain down following the passage of Hurricane Laura.

After the hurricane made landfall early on 27 August, preliminary site assessments and early indications showed most facilities did not have any major storm-related damage, although likely more thorough inspections will be required.

As Hurricane Laura moved inland, the storm caused destructive damage to coastal communities and created power outages across the region.

However, reports indicated that Hurricane Laura did not bring storm surge to levels as high as initially expected to the eastern Louisiana coast, which likely protected the US Gulf liquefaction projects in its path from further harm.

Shipping agency Moran Shipping on 27 August said in a notice that pilot service on Sabine Channel remains closed due to highs and seas offshore, but forecasts showed that conditions should allow for marine traffic to resume by 29 August.

Another shipping report stated that the Calcasieu waterway, which leads into Lake Charles, where Cameron LNG is located on the eastern side, remains closed.

On 27 August, feedgas levels for Sabine Pass and Cameron dropped to zero, according to aggregated pipeline data.

Freeport LNG and Corpus Christi were both outside of the path of Hurricane Laura. Feedgas levels were stable at Freeport as of 27 August, while feedgas flows were three times as high into Corpus Christi.

CAMERON

A Cameron LNG spokeswoman said on 27 August that initial reports indicated that the storm surge was less than projected and has mobilised its damage assessment team to conduct a site review.

The spokeswoman said that another statement would be made once an assessment of the facility has been completed.

SABINE PASS

A Cheniere spokeswoman said that the company’s first priority was on the safety and well-being of their local employees and the community.

UNDER CONSTRUCTION

A spokesman for Golden Pass LNG, which is currently constructing a three-train liquefaction plant in Sabine, Texas, said on 27 August that an initial assessment of the site revealed no significant storm-related impact.

Developer Venture Global also issued a statement on its planned 10mtpa Calcasieu Pass project, which also is under construction, in Lake Charles.

“A walk-through inspection of most areas of the site following the storm confirmed that the project site’s robust storm protection system, including a perimeter wall and storm water pumping system, performed as designed,” according to a statement by a spokesperson.

Energy Transfer, which owns the unused Lake Charles LNG import terminal on Lake Charles, said in a statement that there was no major damage to its facility.

Energy Transfer currently is marketing the development of a liquefaction project at Lake Charles but has not made a final investment decision (FID) on the export project yet.

26 August 2020 16:59

NYMEX: US natural gas prices fall ahead of hurricane landfall

Fauzeya Rahman

HOUSTON (ICIS)–US natural gas prices tumbled on 26 August from the prior session as demand from US LNG plants fell ahead of Hurricane Laura’s landfall.

The September ’20 front-month contract settled down about 1% at $2.46/MMBtu.

Hurricane Laura strengthened 26 August before its anticipated landfall near the Texas-Louisiana border. The storm grew to a Category 4 hurricane and was expected to have wind speeds reaching up to 145mph (233km/hour) at landfall near Cameron Parish, Louisiana.

US-based Sempra declared force majeure 26 August on the Cameron Interstate Pipeline hours after starting a controlled shutdown of the three-train Cameron LNG. US-based Cheniere evacuated personnel and suspended operations at its five-train Sabine Pass plant the day before. It also declared force majeure on the Creole Trail pipeline 25 August.

Feedgas into US LNG plants was down 44% on 26 August compared with the start of the week, pipeline data shows, with flows into Sabine Pass down to zero. On 26 August, 1.65 billion cubic feet (bcf)/day of gas production along the US Gulf had been shut in, according to the US Bureau of Safety and Environmental Enforcement.

26 August 2020 14:55

US oil-well shut-ins in Gulf remain stand at 84%

Al Greenwood

HOUSTON (ICIS)–Hurricane Laura has led to companies shutting in 84.3% of US oil production in the Gulf of Mexico, the Bureau of Safety and Environmental Enforcement (BSEE) said on Wednesday.

The percentage is equivalent to 1.56m bbl/day of oil production, the bureau said. For gas, 1.65bn cubic feet/day has been shut in or 60.9% of total US production in the Gulf.

Companies have evacuated 299 production platforms, 46.5% of the 643 manned platforms in the Gulf of Mexico.

Platforms produce oil and natural gas offshore. Unlike drilling rigs, which typically move from location to location, platforms stay in place throughout a project’s duration.

The Gulf of Mexico hosts several offshore oil wells, accounting for 17% of the nation’s crude production, according to the Energy Information Administration (EIA). The region is home to more than 45% of its refining capacity and 51% of its natural-gas-processing capacity.

Crude and gasoline prices changed little on Wednesday as Laura approaches the Gulf Coast.

The storm strengthened into a category 4 hurricane on Wednesday as it continues to head towards the border between Texas and Louisiana, causing several petrochemical plants and refineries to shut down.

Maximum sustained winds are nearly 140 miles/hour (220 km/hour) and further strengthening could take place, according to the National Hurricane Center.

Hurricane-force winds extend up to 70 miles from the centre of the storm. A storm-surge warning has been issued from Freeport, Texas, to the mouth of the Mississippi river.

Laura is 200 miles south-southeast of Port Arthur, Texas, and it is travelling 16 miles/hour, the centre said. Laura should make landfall by Thursday morning.

26 August 2020 14:30

CRUDE SUMMARY: US prepares for Hurricane Laura to strike heart of US refining sector

Richard Price

• Hurricane Laura shuts 84% of Gulf of Mexico output
• Gulf Coast refiners halt over 2.5m bbl/day refining capacity
• US crude, gasoline stocks fall more than expected – EIA

LONDON (ICIS)–All eyes were on Hurricane Laura on Wednesday, as it barrelled towards the Texas-Louisiana coast. Hurricane Laura is wreaking havoc for US suppliers and refiners as it heads north through one of the key US oil hubs. Buying appetite has stuttered as the storm threatens to cripple US Gulf Coast refinery operations for months.

Gulf of Mexico producers have already evacuated over 300 offshore facilities, halting 84% of the regions total output – equivalent to 1.56m bbl/day – according to the Bureau of Safety and Environmental Enforcement (BSEE). Refiners along the US Gulf Coast have taken almost 2.5m bbl/day of refining capacity offline. The region boasts 45% of the total US refining capacity.

On its current path, the hurricane could shut 10-12% of US refining capacity for more than six months, according to reports from disaster modeller Enki Research.

The US Energy Information Administration (EIA) released the latest US stockpile figures showing falls in both crude and gasoline inventories. EIA data released at 15:30 London time showed a 4.69m bbl draw in US crude stocks, while gasoline inventories fell by 4.58m bbl.

API data released on Tuesday suggested crude stockpiles declined by more than 4m bbl, while gasoline stocks fell by 6.4m bbl.

Despite these numbers both outperforming analysts’ expectations, oil prices shrugged off the news.

		Low	High	Open	Settle	Change
Brent	Oct	45.54	46.10	45.97	45.64	-0.22
WTI	Oct	43.00	43.78	43.39	43.39	0.04

26 August 2020 13:46

INFRASTRUCTURE ALERT: US-based Sempra declared force majeure today on its Cameron Interstate Pipeline hours after starting a controlled shutdown of the three-train Cameron LNG plant ahead of Hurricane Laura’s arrival. The notice said evacuation had “become necessary” to ensure safety of on-site staff.

26 August 2020 13:00

LATEST STORM PATH

Hurricane Laura’s latest path according to the National Oceanic and Atmospheric Administration, which shows expected landfall between the border of Texas and Louisiana:

26 August 2020 12:18

INFRASTRUCTURE ALERT: US Cameron LNG started a controlled shutdown of the three-train plant this morning ahead of Hurricane Laura’s expected landfall later tonight, the operator said today. The hurricane will likely bring heavy winds and strong storm surge to parts of Texas and Louisiana along the US Gulf coast.

25 Aug 2020 22:12

UPDATE: US Sabine Pass, Cameron reduce operations in advance of Hurricane Laura

Ruth Liao
HOUSTON (ICIS)–Some US Gulf LNG producers are reducing operations in advance of the arrival of Hurricane Laura, which has strengthened as it remains offshore and is due to make landfall between Texas and Louisiana sometime on 26 August night.

The National Oceanic and Atmospheric Administration has called for a hurricane watch from just south of the port of Galveston to just east of New Orleans, which includes the area where the operational plants of Freeport LNG, Sabine Pass and Cameron LNG are located.

LNG PLANT OPERATIONS

US-based Cheniere has suspended operations from its five-train Sabine Pass LNG plant in Cameron Parish, Louisiana, after evacuating personnel.

Cheniere also declared force majeure on its US Creole Trail pipeline that feeds into Sabine Pass ahead of the expected arrival of Hurricane Laura. The pipeline will cease flows starting 26 August until further notice.

“After consulting with our team of weather, safety, operations and security teams, Cheniere management has decided to activate emergency plans to evacuate personnel and temporarily suspend operations at Sabine Pass as a result of the approaching hurricane,” according to a spokesperson on 25 August.

The three-train Cameron LNG facility in Hackberry, Louisiana, plans to run “at a reduced rate” with a team of essential staff to ride out the event on site, according to a Cameron LNG spokeswoman.

Feedgas nominations for pipelines into Sabine Pass and Cameron LNG fell on 25 August, according to aggregated pipeline data, while nominations into the Freeport LNG plant in Texas remained stable.

Meanwhile, data showed Corpus Christi pipeline nominations were up slightly.

PILOTS SUSPENDED

Pilot operations have both been suspended from Sabine Pass and Lake Charles leading up to the jetties at Sabine Pass and Cameron LNG, respectively.

A spokeswoman for Freeport LNG said on 25 August that the plant is taking steps to secure the site and the operator is actively monitoring the forecast.

The storm was upgraded to a hurricane status earlier on 25 August and outlying communities along parts of the Texas and Louisiana coast were under evacuation orders, including just east of Houston.

Hurricane Laura is predicted to bring 75mph (120km/hour) winds at its maximum strength.

The forecasts for Hurricane Laura have been complex because of the earlier development of Tropical Storm Marco, which made landfall between 24 August and 25 August.

Cheniere’s second US LNG export plant, the three-train Corpus Christi plant in south Texas, is located further south from where Hurricane Laura is predicted to make landfall.

Loadings for the month of August at the Gulf LNG plants have been reduced even before the hurricane as a result of cargo cancellations from offtakers given the low summer spot price spreads to Europe and Asia.

CONSTRUCTION

Construction activity also has been halted from US Gulf LNG expansion projects. This would also include Cheniere’s construction of Train 6 at Sabine Pass.

Qatar Petroleum and ExxonMobil’s Golden Pass, which is currently constructing a three-train 16mtpa expansion of its brownfield import terminal, has closed its site in Sabine, Texas, on 25 August and remain closed through at least 27 August depending on the storm’s progress, according to a Golden Pass spokesman on 25 August.

Golden Pass’ site preparations ahead of the hurricane included clearing barges from its offloading facility, lowering piling rigs and protecting the shoreline around the site.

Developer Venture Global is constructing the greenfield 10mtpa Calcasieu Pass in Lake Charles, Louisiana. Comment from Venture Global was not returned before deadline.

26 Aug 2020 03:48

NYMEX: US gas futures fall on expectation of lower demand ahead of hurricane

Ruth Liao

US natural gas futures fell slightly on 25 August. Hurricane Laura headed towards the US Gulf coast, but showed little immediate impact on futures prices amid long supply.

The Henry Hub September front-month contract closed at $2.49/MMBtu on 25 August, down less than 1% from the previous day’s settlement. The 24 August settlement of $2.51/MMBtu was a nine-month record high.

Demand destruction from the storm is expected with the planned shutdowns of refineries, petrochemical plants and some LNG operations along the US Gulf. Cameron LNG in Louisiana has planned for reduced rates ahead of Hurricane Laura, while Cheniere’s Sabine Pass suspended operations on 25 August.

An estimated 1.7bn cubic feet (bcf)/day of offshore Gulf of Mexico gas production has been shut in, according to the Bureau of Safety and Environmental Enforcement. This represents just under 61% of offshore gas production in US federal waters.

The storm is expected to make landfall overnight between 26 August and 27 August.

25 Aug 2020 15:08

Cheniere evacuates as tropical storm Laura becomes hurricane-strength

Daniel Stemler Ruth Liao

HOUSTON (ICIS)–Tropical Storm Laura has developed into a major hurricane and is expected to make landfall over the northwestern Gulf of Mexico sometime on 26 August, while additional hurricane watch areas have been issued in parts of Texas, according to the US National Hurricane Center.

US-based producer Cheniere said in a statement on 25 August that it is evacuating personnel at its five-train Sabine Pass liquefaction plant in Cameron Parish, Louisiana, and suspending operations.

“After consulting with our team of weather, safety, operations and security teams, Cheniere management has decided to activate emergency plans to evacuate personnel and temporarily suspend operations at Sabine Pass as a result of the approaching hurricane,” according to the spokesperson.

At least four ships that looked likely to arrive at US Gulf coast LNG plants this week appear to be delayed, staying outside the Gulf of Mexico as storms continue to develop, LNG Edge shows.

On 24 August, only the 174,000cbm ballast Bonito LNG vessel appeared in the US Gulf.

Meanwhile the 177,000cbm Sohshu Maru, the 174,000cbm SM Seahawk, the 152,000cbm K. Mugungwha and the 180,000cbm LNG Juno were all positioned southeast off the Yucatan Peninsula as of 25 August.

24 Aug 2020 06:48

Double storms head toward Gulf Coast LNG infrastructure

Ruth Liao

HOUSTON (ICIS)–The states of Texas and Louisiana are bracing for two named tropical storms that are heading toward the Gulf Coast, where four operational LNG plants are located.

As of 24 August, Tropical Storm Marco was downgraded from a hurricane and likely to head toward Louisiana later the day.

However, the movement of Marco may influence the strength of another named storm, Tropical Storm Laura, which was currently near eastern Cuba and Jamaica.

Tropical Storm Laura is expected to make landfall sometime between 25-26 August between central and northwestern Gulf of Mexico, according to the National Hurricane Center, although this storm’s path could likely change, which could have varying impacts between Texas and Louisiana.

The operational US LNG plants along the Gulf Coast are Corpus Christi and Freeport LNG in Texas and Sabine Pass and Cameron LNG in Louisiana.

The brownfield Golden Pass project is under construction in Texas, along with Venture Global’s greenfield Calcasieu Pass in Louisiana.

Both storms appear not likely to have an impact on the Elba LNG plant near Savannah, Georgia.