Freeport LNG will reduce the number of loadings at the 15 million mt/year capacity liquefaction facility through up to early November due to a planned maintenance outage on a segment of pipeline that feeds gas to the Texas terminal, a person familiar with the decision said Oct. 22.
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North to south capacity on a segment of Boardwalk Pipeline Partners' Gulf South pipeline will cut flows by up to 650 MMcf/d during the work that will occur from Oct. 26 to Nov. 9, according to a notice from the operator to market participants. That work will be along its main 30-inch line from Goodrich, a compressor just northeast of Houston, to South Texas. The operator will be conducting maintenance from Nov. 10-12 that will limit capacity by 400 MMcf/d from Brazos, a station just downstream of Goodrich, to South Texas.
Gulf South gathers gas from basins in Texas and Alabama and delivers it to the US Northeast, Midwest and Southeast.
Freeport LNG declined to comment.
Freeport LNG has options to get gas from other pipelines, including the Texas Eastern Transmission Gas Pipeline operated by Canada's Enbridge. Because of that, it was not clear exactly how many LNG loadings would be reduced or for how long, the person said.
Feedgas deliveries to the terminal totaled 1.8 Bcf/d on Oct. 22, down from about 2 Bcf/d the day before, based on nominations for the morning cycle. Earlier in the week, flows fell to below 1.5 Bcf/d, S&P Global Platts Analytics data showed.
There was one unladen tanker, Maran Gas Alexandria, moored at the facility on Oct. 22, according to Platts cFlow trade-flow analytics software. It arrived Oct. 21. Ten tankers have departed Freeport LNG month to date as of Oct. 22 -- the last one, the Bushu Maru, on Oct. 20, cFlow showed. There were nine tankers that departed Freeport LNG during the same period in September, cFlow showed.
Freeport LNG has offtake commitments with Japanese utilities JERA and Osaka Gas, each of which also hold 25% stakes in an entity that controls the terminal.
During an interview from Tokyo with Platts earlier Oct. 22, Sunao Nakamura, a senior managing executive officer at JERA, said the 20-year liquefaction tolling agreement that it has with Freeport LNG helps it optimize its portfolio during periods of high demand and volatile price movements.
Strong prices in end-user markets in Asia and Europe have been incentivizing near full dispatch of US liquefaction terminals for months.
The price volatility peaked earlier in October, with the Platts JKM spot Asian LNG price hitting a record high of $56.33/MMBtu on Oct. 6, while the TTF day-ahead contract in Europe reached a high of $39.50/MMBtu on Oct. 5. Platts JKM for December was assessed at $33.642/MMBtu Oct. 22, while Platts assessed TTF for December at $29.829/MMBtu.
The US FOB Gulf Coast Marker was assessed Oct. 22 at $27/MMBtu, the same level as the day before. That was based on elevated freight rates for shipments through the Atlantic and Pacific affecting FOB USGC cargoes loading 30 to 60 days forward, in conjunction with price movements in the major destination markets.
Both sections of Gulf South that will be undergoing maintenance include the delivery location to send feedgas to Freeport LNG, which is fed by the Coastal Bend Header pipeline. Month to date, Gulf South's Coastal Bend line has averaged 1.2 Bcf/d of feedgas deliveries to Freeport.
While the initial reduction will significantly limit flows along Gulf South's 30-inch line, roughly 500 MMcf/d of Gulf's South's deliveries to Freeport are supplied from the 30-inch line, with other pipeline deliveries from Tennessee and Enterprise mainly, delivering the remaining feedgas volumes into the Coast Bend Header line.
Therefore, while the maintenance activities from Oct. 26 through Nov. 12 will reduce Gulf South deliveries into Coastal Bend, increased deliveries from Kinder Morgan's Tennessee Gas Pipeline and Enterprise Products Partners' intrastate system could help to offset some of those losses, according to Platts Analytics.