News<\/p>\n
11\/02\/26<\/p>\n
US LNG becomes domestic swing supply during storm<\/p>\n
Feedgas supplies to LNG terminals dropped significantly, but overall exports
\nfell only marginally, writes Tray Swanson London, 11 February (Argus) \u2014 Freezing
\nweather across the US last month resulted in firms tapping feedgas flows to
\nliquefaction facilities and existing LNG stocks intended for exports in order to
\nmeet gas demand from domestic users \u2014 a dynamic exacerbated by a decade-long
\nmismatch between rapidly rising LNG production and a comparative lack of growth
\nin underground gas storage. An arctic blast hit much of the US over 23-27
\nJanuary, boosting heating demand while also causing freeze-offs at some gas
\nproduction facilities. Gas suppliers drew on stocks to meet demand, marking the
\nlargest weekly storage withdrawal on record. But even this was not sufficient to
\nrebalance the domestic market, and domestic spot prices soared to all-time
\nhighs. This led the US market to tap into its supply of last resort \u2014 gas
\nintended for export. Gas producers and LNG exporters with the flexibility to do
\nso were able to cede gas molecules back into the domestic market at attractive
\npremiums. Freezing temperatures caused operational problems and production
\nlosses at upstream and midstream infrastructure, with lost output amounting to
\nan estimated 93.2bn ft\u00b3 (2.6bn m\u00b3) over 25-31 January. Alongside this, gas
\ndemand for heating soared, leading to a record-high stockdraw of 360bn ft\u00b3 in
\nthe week ending 30 January, Energy Information Administration (EIA) data show.
\nThe stockdraw was highest in south-central US, where six operating LNG export
\nterminals are spread across Louisiana and Texas. Withdrawals in the region
\nreached a record-high 159bn ft\u00b3 in the week to 30 January. Even so, Henry Hub
\nday-ahead prices still rose to a record high above $28\/mn Btu over 23-26
\nJanuary, more than double the value of spot LNG delivered to northwest Europe.
\nPrices were even higher at nearby trading hubs, giving liquefaction capacity
\nholders a strong incentive to sell their gas domestically. Aggregate feedgas
\nflows to the US’ eight liquefaction facilities fell by at least 7bn ft\u00b3\/d, or
\n39pc, at the peak of the cold snap, compared with a 30-day average of 17.9bn
\nft\u00b3\/d before temperatures plummeted. The aggregate reduction in gas available
\nfor export amounted to about 26bn ft\u00b3 in the week ending 30 January, equivalent
\nto eight LNG cargoes. Among Gulf coast LNG facilities, the slowdown in feedgas
\nnominations was most pronounced at the 33mn t\/yr Sabine Pass and 15mn t\/yr
\nCameron terminals in Louisiana, and the 28.9mn t\/yr Corpus Christi and 17.3mn
\nt\/yr Freeport facilities in Texas. Cheniere procures and holds title to the gas
\nat Sabine Pass and Corpus Christi until it is loaded as LNG onto a ship, whereas
\nCameron and Freeport are tolling-based terminals. For whom the bell tolls Yet
\naggregate US loadings fell by only 107,000t in January compared with the
\nprevious month, and exports from Sabine Pass, Cameron and the 27.2mn t\/yr
\nPlaquemines terminal even increased on the month. Cheniere has the advantage of
\nsignificant LNG storage, with tanks capable of holding eight LNG cargoes across
\nits two terminals. This likely allowed Cheniere to meet its contractual
\nobligations with offtakers while also selling feedgas into the domestic market.
\nCheniere’s feedgas supply fell by 9.8bn ft\u00b3 over 24-28 January, pipeline data
\nshow. This volume is equivalent to three LNG cargoes and could easily be offset
\nby supplies from Cheniere’s sizable storage capacity. And customers with LNG
\ntolling arrangements have considerable flexibility because they control their
\ngas supply and are not obligated to liquefy it. In fact, tolling LNG terminals
\non the Atlantic coast not only cut their feedgas flows during the late-January
\nfreeze but they also imported cargoes. Firms in the east coast region withdrew
\n74bn ft\u00b3 of gas from storage in the week ending 30 January, just 2bn ft\u00b3 shy of
\nthe record set in January 2018, EIA data show. This propelled day-ahead prices
\nto a record high of $133.85\/mn Btu on 26 January at Transco zone 5, a bellwether
\nmarket for demand between the Georgia-South Carolina and Virginia-Maryland
\nborders. Trading firms imported LNG to Georgia’s 4mn t\/yr Elba Island and
\nMaryland’s 5.75mn t\/yr Cove Point terminals for the first time in more than five
\nyears, with BP shipping two cargoes to Cove Point and Shell sending one to Elba
\nIsland, data from trade analytics firm Kpler show. Last month’s events may have
\nexposed the limits of a market that has seen its flexibility eroded over the
\npast decade, as the US’ rapid rise to the rank of top global LNG exporter has
\nnot been matched by comparable investment in storage. Underground storage
\ncapacity has remained flat over the past decade, during which time the US has
\ntransformed from a net gas importer into the world’s largest LNG producer. That
\nprocess has left the US with little slack in its gas system, particularly on the
\nGulf coast during periods of weather-related supply disruptions. Aggregate US
\nstorage capacity stood at 4.67 trillion ft\u00b3 in November, the most recent data
\nmade available by the EIA show. This compares with 4.66 trillion ft\u00b3 a decade
\nearlier, when the country was on the cusp of shipping its first domestically
\nproduced LNG cargo from the lower 48 states. Storage capacity available at
\npresent likely equates to approximately 14pc of the overall size of the US
\nmarket, compared with 17pc a decade earlier. The imbalance is even more striking
\nin the key exporting states of Texas and Louisiana, where total designed storage
\ncapacity has remained flat at 988bn ft\u00b3 over the past 10 years, while feedgas to
\nGulf coast LNG facilities has risen to 16.5bn ft\u00b3\/d at the end of 2025 from
\nvirtually zero a decade earlier, before the Sabine Pass facility had been
\ncommissioned. Up to speed Differences across storage withdrawal ratescan also
\nadd to price volatility. The south-central region has the highest technical
\nwithdrawal capacity of about 51.8bn ft\u00b3\/d, in part because almost a third of its
\nstorage sites consist of salt caverns, according to the EIA. Salt caverns can
\nsend out gas much faster than storage at depleted reservoirs and aquifers, which
\nmake up the majority of capacity in other regions and have withdrawal speedsof
\naround 4.3bn-28.2bn ft\u00b3\/d. Narrow seasonal spreads in US gas prices have caused
\ninvestments in storage capacity to dry up since the beginning of the last
\ndecade. Nymex futures contracts for delivery at the Henry Hub this summer
\ncurrently hold a 86\u00a2\/mn Btudiscount to corresponding contracts for delivery in
\nwinter months, having slightly expanded from last year’s average of 55\u00a2\/mn Btu.
\nTighter spreads reduce the intrinsic value of storage capacity \u2014 or the ability
\nfor capacity holders to lock in margins months or years in advance because of
\nthe seasonal spread in gas prices. But the volatility caused by growing LNG
\nproduction is increasing the extrinsic value of storage \u2014 the ability to benefit
\nfrom short-term price volatilitybecause of the additional optionality gas stocks
\nprovide \u2014 resulting in renewed interest in investing in such capacity. Extreme
\nweather will continue to threaten price volatility until more underground gas
\nstorage is built. Projects comprising 262bn ft\u00b3 of capacity have been proposed
\nin the US in recent years. If all are built, the country’s capacity would
\nincrease by nearly 6pc, after holding flat at around 4.7 trillion ft\u00b3 since
\n2015. Even so, liquefaction capacity is expected to grow at an even faster pace,
\nfollowing a banner year for investments in US LNG in 2025. US liquefaction
\ncapacity is predicted to increase by 80pc over 2026-30, reaching nearly 225mn
\nt\/yr, or 28bn ft\u00b3\/d, by the end of the decade. Feedgas flows to LNG plants
\ntrillion Btu Henry Hub implied seasonal spreads $\/mn Btu LNG vs key TX\/LA
\nday-ahead prices $\/mn Btu Send comments and request more information at
\nfeedback@argusmedia.com Copyright \u00a9 2026. Argus Media group . All rights
\nreserved.<\/p>\n","protected":false},"excerpt":{"rendered":"News 11\/02\/26 US LNG becomes domestic swing supply during storm Feedgas supplies to LNG terminals dropped significantly, but…\n","protected":false},"author":2,"featured_media":57752,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[155,157,156],"class_list":["post-161314","post","type-post","status-publish","format-standard","has-post-thumbnail","category-corpus-christi","tag-corpus-christi","tag-corpus-christi-headlines","tag-corpus-christi-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/161314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=161314"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/161314\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/57752"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=161314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=161314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=161314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}