US LNG activity rises sharply as two terminals resume production after outages

Houston — Utilization at US liquefaction terminals surged Oct. 12 as Dominion Energy's Cove Point terminal and Sempra Energy's Cameron LNG resumed production.

Cove Point in Maryland ramped up after completing maintenance that began Sept. 21, while Cameron LNG in Louisiana escaped any damage from Hurricane Delta and restarted operations after shutting down ahead of the storm. It could be several more weeks before Cameron LNG is at full operations, after a lengthy shutdown because of damage from Hurricane Laura in late August.

The activity comes as prices for LNG delivered to key end-user markets in Asia and Europe continue to recover from a significant downturn during the spring and summer at the height of global demand shocks from the coronavirus pandemic.

With positive spreads between US Henry Hub and the S&P Global Platts JKM in northeast Asia and the Dutch TTF, the rise in US LNG export terminal utilization should gain steam in the near term, especially with all six major terminals producing LNG simultaneously for the first time since Aug. 25. The JKM for November was assessed steady at $5.538/MMBtu Oct. 12, versus $2 in April.

Feedgas deliveries to US LNG terminals totaled about 7.5 Bcf/d Oct. 12, up from about 6 Bcf/d Oct. 11 and 5.5 Bcf/d Oct. 10, Platts Analytics data show. Cameron LNG resumed production Oct. 11 and Cove Point returned from maintenance Oct. 12, according to the operators of both facilities.

Annual maintenance at Cove Point lasted about the same number of days as in 2019.

At Cameron LNG, in Hackberry south of Lake Charles, officials began assessments Oct. 10 and determined it was safe to restart production on Oct. 11, spokeswoman Anya McInnis said in an e-mailed statement.

"We have resumed work to execute our plans toward achieving full production," she said. "Additionally, we are working closely with the Port of Lake Charles to assess the condition of the Calcasieu Ship Channel to confirm accessibility to our jetties."

Utility Entergy was still working on assessing total damage to power infrastructure in the area and did not know when service that Hurricane Delta disrupted would be restored to all affected customers. But power to Cameron LNG does not seem to have been affected, as feedgas ramped up to 600 MMcf/d Oct. 12.

The Calcasieu waterway was undergoing assessments to see how much damage was done by Delta; As of Oct. 12, draft restrictions were preventing large vessels such as LNG tankers from moving through the channel. The storm made landfall east of the area, leaving Cheniere Energy's Sabine Pass facility out of the main path of the storm and allowing it to remain online during the storm, albeit at a reduced level.

Prior to shutting down ahead of the most recent storm, Cameron LNG's three trains shut Aug. 26, the day before Laura caused widespread damage in southwestern Louisiana. It remained offline for more than a month largely because of damage to power infrastructure operated by Entergy that the terminal relies on to run its trains.