Disruptions in US LNG Shipments due to Freezing Weather

The recent snow storm that hit all parts of Texas and Louisiana disrupted scheduled US liquefied natural gas (LNG) exports, temporarily restricting some supplies of the gas, which is used for heating purposes and as fuel for power plants, according to Bloomberg.

The Cameron LNG export terminal in Louisiana has canceled at least one scheduled shipment, according to people familiar with the matter. Several other planned deliveries from Cheniere Energy's Cameron and Corpus Christi plants in Texas were also delayed, they said.

In a related development, on Tuesday, the Freeport LNG terminal in Texas stopped one of its three production units and then restarted it briefly, according to a disclosure submitted to state authorities. Loading of scheduled shipments at Freeport was also disrupted this week as a result of the weather, according to people familiar with the matter.

Export disruptions are likely to be short-lived, with temperatures expected to rise over the next week. Temperatures are also expected to be milder than usual in most parts of the United States during the period from January 23 to 27, according to the US Oceanic and Atmospheric Administration.

However, it is expected that the impact of the global market from this crisis will be limited, given that gas stocks across Europe and Asia are still high, in addition to the approaching end of the winter season. European gas futures prices fell to their lowest level in five months on Wednesday.

Cold weather in the United States has closed ports and reduced domestic gas production, forcing LNG exporters to rearrange schedules for customers. Gas flows through pipelines to liquefaction facilities on Wednesday were 45% lower than the previous week.