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Texas Governor mandates gas to be offered to power producers before leaving state

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Texas Governor mandates gas to be offered to power producers before leaving state

  • Author
  • Luke Stobbart
  • Editor
  • Manish Parashar
  • Commodity
  • Natural Gas

Houston — Texas Governor Greg Abbot has ordered all sourced natural gas in Texas be made available to local power generators before leaving the state, according to an official correspondence sent by the Governor's office and seen by S&P Global Platts.

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A similar message was communicated via a press release on the Governor of Texas' official website. Though the release placed the onus specifically on "natural gas producers," as opposed to "all sourced natural gas," referred to in the first correspondence.

Both sources said the mandate would remain in effect through Feb. 21, 2021.

Texas has seen widespread power outages as a result of heating demand from the recent winter storm gripping much of North America.

Strong demand for gas in Southern Texas has seen daily prices at some south Texas gas hubs climbing into the triple digits -- well above what would be seasonally normal.

Feedgas utilization from LNG plants in the US Gulf Coast had fallen significantly from its normal range of 10-11 Bcf/d since Feb. 10, moving to as low as 2.2 Bcf on Feb. 16, according to data from S&P Global Platts Analytics.

Of the six operating export plants in the US, only two Freeport LNG and Corpus Christi LNG are located in Texas, and had drawn less than 500 MMcf of gas from the grid on Feb. 16.

Feedgas uptake at Freeport LNG fell to nil on Feb. 16, and was nominated at a negligible amount for Feb. 17. Media reports from Feb. 16 said the operators of the plant had been asked to curtail their feedgas utilization. Freeport LNG declined to comment on the matter.

The Cheniere-run Corpus Christi plant also saw its uptake reduced to just 427 MMcf/d on Feb. 16, down from its normal levels of above 2 Bcf/d. On Feb. 17, feedgas flows were nominated at 1.561 Bcf. The actual final gas allocation for the plant for Feb. 17 was not yet available at the time of publishing.