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Pipeline maintenance to impact US LNG feedgas deliveries through early October

Highlights

Pipes serve Sabine Pass, Cove Point terminals

Export activity to remain strong amid Asian demand

Annual maintenance along the pipelines that feed several major US liquefaction facilities will impact gas deliveries to the terminals over the next month-and-a-half, according to notices to customers.

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Exports should remain relatively robust, amid occasional dips, due to strong market fundamentals.

The S&P Global Platts JKM for October was assessed at $16.170/MMBtu on Aug. 23. Even with the US Henry Hub elevated in recent months, the spread between it and the Asian benchmark has widened and translated to higher netbacks on deliveries from the US Gulf Coast. That trend has incentivized near full utilization of US liquefaction terminals.

Peak Atlantic hurricane season and scheduled turnarounds are likely the only factors that could limit US output in the near-term.

As of Aug. 23, there were no storms listed in the National Hurricane Center's five-day outlook that were forecast to impact the US Gulf Coast, where four terminals are located, nor the US mid-Atlantic and Southeast, which are each home to one terminal.

As for maintenance, scheduled work at a meter station along Cheniere Energy's Creole Trail Pipeline that was to begin Aug. 24 and end Aug. 25 will cut capacity from 1 Bcf/d to 600 MMcf/d, according to a notice to customers. However, current flows through the affected Gillis compressor station are only 700 MMcf/d. At most, that would suggest a 100 MMcf/d decline in feedgas flows to Cheniere's Sabine Pass LNG export terminal in Louisiana, with room for that to be made up from other receipt points, S&P Global Platts Analytics data show.

Elsewhere, approximately 400 MMcf/d of current receipts onto Cove Point Pipeline will be taken offline during eight days of scheduled work at the Pleasant Valley compressor station that begins Sept. 20 and ends Sept. 28, according to a notice to customers. The entire station will be offline during that period. Three engines at the compressor station will be unavailable during additional work form Sept. 29-Oct. 10.

The three-week period covering the maintenance coincides with the timeframe when the Berkshire Hathaway-operated Cove Point Liquefaction terminal in Maryland conducted scheduled maintenance on the export facility in 2019 and 2020.

There is likely some flexibility for the LNG terminal to make up for some of the pipeline flows that will be offline or interrupted via Pleasant Valley through increased flows from the Loudoun compressor station, but it would not be able to cover the full amount off from Pleasant Valley, Platts Analytics data show. Maintenance is scheduled at the Loudoun compressor station from Oct. 4-6.

US LNG feedgas demand totaled 10.47 Bcf/d on Aug. 23, down about 290 MMcf/d from 10.76 Bcf/d the day before, Platts Analytics data show. Feedgas demand last topped 11 Bcf/d on Aug. 17.