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Three US LNG facilities see lower utilization as historic Asian price surge continues

Highlights

One Elba train remains down after 2020 fire

Freeport fluctuations not related to compressor trip

Houston — Kinder Morgan's Elba Liquefaction is working on scheduling repairs to a unit at the 10-train facility in the US state of Georgia that has been offline since a fire eight months ago.

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The operator is coordinating with vendors on the schedule and expects to have details finalized in the "near term," spokeswoman Katherine Hill said in an e-mail Jan. 12.

The terminal near Savannah on the US East Coast has yet to operate at its full capacity of 2.5 million mt/year since shipping its first cargo in December 2019. With Asian spot prices topping $30/MMBtu, extending a historic rally, US LNG exporters are being incentivized to keep facility utilization high.

Related factbox: Asian spot LNG prices hit record highs on supply glitches, demand spike

Feedgas deliveries to Elba, the smallest of the six major US liquefaction facilities, fell to 116.4 MMcf/d on Jan. 12 from 140.1 MMcf/d the day before, S&P Global Platts Analytics data showed. Deliveries were down by more than half from a week earlier. Elba is backed by a 20-year offtake agreement with Shell.

The fire at Elba in May 2020 occurred in a mixed refrigerant compressor of Unit 2. Two adjacent units that were shut as a precaution were later brought back online, while Unit 2 has remained down since the fire. The terminal -- originally built to import LNG and later converted to handle exports after the US shale revolution -- utilizes Shell's Movable Modular Liquefaction System design.

Freeport LNG in Texas was also operating at reduced levels. A spokeswoman, Heather Browne, said Jan. 12 that the feedgas decline was not related to a recent compressor trip involving the terminal's first liquefaction train. She said variability in flows over the next month is part of the terminal's scheduled lifting program.

According to a filing with the Texas Commission on Environmental Quality, the Train 1 compressor trip occurred on Jan. 10 and was caused by the loss of a pressure transmitter.

"This resulted in unavoidable venting to the liquefaction flare," the filing said. "Subsequent flaring occurred with the restart and cooldown of the unit as Train 1 was brought back to operating temperatures that would allow for the cessation of flaring. "

The trip did not result in any impact to customers, Browne said. Freeport LNG has three trains in operation and has proposed building a fourth train. Gas deliveries to Freeport LNG totaled 1.27 Bcf/d on Jan. 12, down from 1.57 Bcf/d the day before.

Cheniere Energy's Corpus Christi Liquefaction facility in Texas was also seeing lower utilization Jan. 12, according to Platts Analytics data. Flows to that facility totaled 1.31 Bcf/d on Jan. 12, versus 1.96 Bcf/d the day before.

Asian spot LNG prices have been buoyed of late by strong winter demand and supply constraints in some producing countries.

The Platts JKM for February was assessed $4.273/MMBtu higher day on day at $32.494/MMBtu on Jan. 12. The benchmark price for spot-traded LNG delivered to Northeast Asia has jumped to a record high from a record low in less than nine months.