16 Sep 2020 | 20:01 UTC — Houston

Power could be restored to Cameron LNG export facility by Sept. 30: Entergy

Highlights

Three trains have been offline since Aug. 26

Hurricane Laura damaged La. transmission system

Houston — Sempra Energy's Cameron LNG could see power restored at its US Gulf Coast export facility by Sept. 30 provided the terminal is able to safely receive electricity, according to utility Entergy.

Cameron LNG, in Hackberry south of Lake Charles, relies on power purchased from Entergy. The utility was making progress repairing transmission infrastructure in southwest Louisiana severely damaged when Hurricane Laura came ashore Aug. 27 packing winds up to 150 mph. As of Sept. 16, 37,565 customers in Calcasieu and Cameron parishes remained without power, down from a peak of approximately 93,000 in the region following the storm, Entergy said in a notice.

The operator of the liquefaction terminal has not said whether on-site connections were damaged by the hurricane and may take longer to repair. Assuming everything was ready to go once power was restored, ramp-up could occur relatively quickly. As for cargoes, deep-draft vessels should be able to traverse the channel that serves the terminal without restrictions by Oct. 8, following a dredging operation, according to a shipper notice to customers.

A Cameron LNG spokeswoman declined to comment Sept. 16. The operator's last substantive update was Sept. 4, when it said Laura's impact on the local resources Cameron LNG depends upon has been significant.

The uncertainty over the timing of Cameron LNG's return to service has amplified concerns about US gas storage levels in October, as feedgas deliveries to the facility, which have been at zero since the three trains were shut down the day before Laura hit, are a critical piece of demand.

Gas balances will be tight come the winter due to a massive decline in US production year-over-year. However, end-October inventories are trending towards 4 Tcf and as a result there is some concern about storage availability at that time. Hence, the Jan-Oct spread is close to $1, which is well above the five-year average for this time of year, S&P Global Platts Analytics data show.

Cheniere Energy's Sabine Pass terminal, in a different part of Cameron Parish, produces its power on-site, helping it get back up and running more quickly. It resumed production Sept. 9.

Overall US LNG feedgas demand has rebounded in recent weeks amid improving market fundamentals. Gas deliveries to the five other major liquefaction terminals besides Cameron LNG totaled 7.32 Bcf/d Sept. 16, down slightly from 7.36 Bcf/d the day before, Platts Analytics data show. Prior to the recent ramp-up, the last time total US flows were above 7 Bcf/d was in May, when the worst of the market impacts from the coronavirus pandemic had not yet taken hold.


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