(S&P Global, 11.Sep.2024) — Oil and natural gas producers, refiners and power companies were preparing Sept. 11 for the impacts of Hurricane Francine.
According to the US National Hurricane Center, the storm was making landfall in the early evening as a Category 2 Hurricane.
“After landfall, Francine is expected to quickly weaken while also losing tropical characteristics. Transition to an extratropical cyclone is expected to be complete” by the morning of Sept. 13, the agency said Sept. 11.
Prices
Oil
— NYMEX October WTI climbed $1.56 to $67.31/b and ICE November Brent ended the session up $1.42 at $70.61/b as Gulf of Mexico production shut-ins overshadowed a surprise US inventory build .
— NYMEX October RBOB settled 2.72 cents higher at $1.8972/gal and October ULSD climbed 3.37 cents to $2.0917/gal.
— The impact on spot crude price differentials has been modest so far, suggesting a well-supplied prompt market, with US Gulf Coast sour Mars crude edging down 5 cents to a 75 cents/b discount to WTI Sept. 11.
Natural gas
— Despite weakening energy demand, wholesale power and gas prices have remained strong.
— Platts, part of S&P Global Commodity Insights, assessed the Gulf Coast Marker for US FOB LNG cargoes loading 30-60 days forward at $10.58/MMBtu on Sept. 11, up 26 cents on the day.
— Henry Hub trading on Sept. 11 priced spot gas at $2.14/MMBtu for Sept. 12 delivery, up from Sept. 11’s $2.125/MMBtu and Sept. 4’s $1.985/MMBtu.
— Transco Zone 4 spot gas, important for GTC and Soco power, averaged $2.37/MMBtu for Sept. 12 delivery, down from Sept. 11’s $2.49/MMBtu but up from Sept. 4’s $2.145/MMBtu.
Power
— MISO Louisiana Hub day-ahead on-peak locational marginal prices for Sept. 11 delivery averaged $27.30/MWh, up $2.88, or 11.8%, from Sept. 4’s real-time on-peak LMP of $24.42/MWh.
— Into GTC day-ahead on-peak bilateral power for Sept. 11 delivery was assessed by Platts at $30.50/MWh, up $5.25, or 20.8%, from Sept. 4’s $25.25/MWh.
Trade flow
Oil
— The Louisiana Offshore Oil Port suspended all marine operations Sept. 11. Crude exports from LOOP have slipped to around 2 million barrels in August from 7 million barrels in June, S&P Global Commodities at Sea data shows.
— Texas ports were returning to normal operations Sept. 11 while the Cameron and Lake Charles, Louisiana ports remain shut.
— The Port of New Orleans has closed all operations at its ports, with no vessel movement allowed and additional restrictions on portions of the Lower Mississippi River, according to the US Coast Guard Sept. 11.
— The Brownsville port at the Port of Corpus Christi, Texas remained closed to all traffic Sept. 11, while other Texas ports were closed only to inbound traffic.
Natural gas
— Operators of the three US LNG export terminals in Louisiana that were closest to the forecast storm track as of Sept. 11 — Cheniere’s Sabine Pass LNG, the Sempra-led Cameron LNG and Venture Global’s Calcasieu Pass LNG — said they were monitoring the storm, which was tracking to the east of the facilities.
— Total feedgas demand for the three LNG export plants — Cheniere’s Sabine Pass LNG, the Sempra-led Cameron LNG and Venture Global’s Calcasieu Pass LNG — was about 6.8 Bcf/d on Sept. 11, compared with an average of about 8.1 Bcf/d in the first ten days of the month, according to Commodity Insights data, based on nominations for the morning cycle subject to revision.
— Scheduled feedgas deliveries declined Sept. 11 to the Cameron LNG plant in Hackberry, Louisiana and to the Calcasieu Pass facility farther south.
— A Cheniere spokesperson said production at Sabine Pass remained uninterrupted as the operator continued with storm preparations.
— Venture Global said it was securing its Plaquemines site nearing startup on the Mississippi River south of New Orleans, closer to the storm’s latest projected path, with small deliveries of natural gas for commissioning activities halted on Sept. 10.
Power
— Hurricane Francine weakened Southeast Gulf Coast energy demand Sept. 11. In the Midcontinent Independent System Operator’s South Region, which includes almost all Louisiana plus most of western Mississippi, MISO forecast load to peak at barely 21 GW on Sept. 11, down 4.1 GW, or 16.2%, from Sept. 4’s 25.1 GW.
— S&P Global Commodity Insights said MISO’s gas power burn would total less than 3.8 Bcf on Sept. 11, down about 3.8% from Sept. 4’s 3.9 Bcf.
— New Orleans-based Entergy utilities said in a Sept. 11 release that based “on historical restoration times, customers in the direct path of a Category 1 hurricane can experience outages for up to seven days, up to 10 days for a Category 2 and up to two weeks for a Category 3.”
Infrastructure
Oil
— Upstream producers had shut in 674,833 b/d of oil production Sept. 11, or around 38.6% of the US Gulf’s total crude output of 1.85 million b/d, and also 907,000 Mcf/d, or about 49% of the Gulf’s total gas production, according to the US Bureau of Safety and Enforcement.
— Some 171 US Gulf platforms have been evacuated, which account for 46% of total platforms in the region, BSEE said.
— As Francine has shifted east, the storm is threatening roughly 2 million b/d of refinery capacity .
— Calcasieu Refining shut its 135,500 b/d plant in Lake Charles, Louisiana, on Sept. 9, according to a company spokesperson, reducing the parish’s operating refinery capacity to 719,000 b/d.
— ExxonMobil’s 522,500 b/d Baton Rouge refinery is one of the larger plants more at risk by Francine’s shift.
— “Operations continue at our Baton Rouge facility. We’re closely monitoring and preparing for severe weather that may impact our Baton Rouge operations,” said Lauren Kight, in an emailed statement on Sept. 11, adding, “We continue to meet customer commitments.”
Power
— The Midcontinent Independent System Operator on Sept. 9 issued a severe weather alert and initiated conservative operations procedures for its Louisiana and Mississippi members effective 7 pm CT Sept. 10 through 7 pm CT Sept. 13.
— Louisiana Governor Jeff Landry on Sept. 9 declared a state of emergency in preparation for the storm.
— Entergy’s nuclear plants in Louisiana and Mississippi have initiated severe weather procedures, including walk-downs, securing equipment and making plans for contingency staff. The company noted it does not expect the storm to impact its 992-MW River Bend and 1,222-MW Waterford-3 plant in Louisiana or 1,498-MW Grand Gulf-1 plant in Mississippi.
— The Nuclear Regulatory Commission is monitoring Francine’s path from its regional office in Texas, spokesman Victor Dricks said Sept. 10. “We are maintaining close communication with four plants in its projected path — River Bend, Grand Gulf, Waterford and South Texas Project,” Dricks said.
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