Winter Cuts into Cheniere LNG Terminal's Output

Cold weather and burst water mains in Port Arthur, Texas are likely affecting the output at America's biggest LNG facility, Cheniere's Sabine Pass terminal. 

Last weekend, the terminal's gas consumption fell dramatically, reported Platts and Reuters. On January 19, it hit a low of about 0.6 billion cubic feet per day, a small fraction of the average of three billion cubic feet per day it has registered over the past three months. 

The production drop followed after a notice from the city of Port Arthur that residents should boil water due to multiple water main breaks and low system pressure. Freezing temperatures led to damage to the city's water system, and pressures fell below the state's safe minimum of 20 PSI. The advisory was lifted on Friday. 

Sabine Pass, located eight miles south of Port Arthur, was exempt from the boil water advisory. However, city spokesman Risa Carpenter told American Press that "when the pressure becomes an issue, we reduce the flow over to Cheniere." She said that the city is slowly "ramping up" its water supply to the LNG plant. 

The plant's output was high from November through early January, nearly double last year's numbers thanks to the completion and commissioning of two new liquefaction trains. According to Platts, it has exported about 200 bcf of gas over the past three months on roughly 60 ships. 

The rising price of LNG on Asian markets has helped to boost Cheniere's margins, too. China is attempting to cut back on coal and replace it with gas for winter heating, raising LNG demand and lifting prices for the first time in years.