Extensive damage slows utility's efforts to restore electricity to Freeport LNG area

CenterPoint's efforts to restore power to the area that includes the Freeport LNG export terminal, which remained offline for a third consecutive day Sept. 16 following Hurricane Nicholas' landfall in Texas, were being slowed by significant localized damage, the utility said.

The extended outage pushed total US LNG feedgas demand down to its lowest level in more than three months, according to S&P Global Platts Analytics data.

The disruption comes amid extremely robust global LNG fundamentals that are being buoyed by strong demand in Asia and Latin America. Netbacks on deliveries from the US Gulf Coast have strengthened, even with higher input costs driven by elevated US Henry Hub prices.

Freeport LNG, located on a small island in Brazoria County along the Gulf of Mexico, uses electric motors instead of natural gas turbines to drive the liquefaction compressors on its three trains, which have combined capacity of 15 million mt/year.

"Our crews from the Brazoria service center have made significant progress in the area's power restoration, restoring nearly 41,000 customers since the storm began with less than 14,000 customers remaining without power," CenterPoint said in an e-mail to Platts. "However, the remaining outages are more localized and may take longer to address."

The utility said that its Brazoria service area had significant damage caused by the storm, including multiple poles down in streets and easements, downed trees, downed wires, and damaged service drops.

A service drop is an overhead electrical line running from a utility pole to a customer's building or other structure. CenterPoint's outage tracker on its website showed three locations at or around the Freeport LNG terminal without power as of mid-afternoon on Sept. 16.

While dozens of crews were working to restore power to remaining impacted customers, the utility could not provide a timeframe for completing repairs. A spokesperson for the LNG terminal could not provide a timeframe for when service would resume.

Nicholas hit the Texas Gulf Coast early Sept. 14 as a Category 1 hurricane, bringing 75 mph winds and heavy rain. At the height of the storm, CenterPoint reported more than 400,000 customers across its service area, which includes the greater Houston area, without power. As of mid-afternoon on Sept. 16, that total was down to 32,000 customers without power, almost half of which were in CenterPoint's service area that includes Freeport LNG.

US LNG feedgas demand totaled 9.06 Bcf/d on Sept. 16. That included nominations of about 275 MMcf/d to Freeport LNG for the morning cycle. Those flows were likely to be revised downward for the evening cycle, as occurred for the previous two days that the terminal was offline. The 8.88 Bcf/d in total US LNG feedgas demand on Sept. 15 was the lowest level since June 7, Platts Analytics data showed.