With the rise of U.S. LNG exports in recent years, southern Louisiana has become a focal point for natural gas demand, pulling in gas supply from near and far and all directions. That market was severely disrupted this summer as COVID-19 decimated global LNG demand and hammered the economics of U.S. LNG exports. Pipeline flows into southern Louisiana during those months went from record-breaking highs that pushed the limits of the area’s infrastructure capacity to levels consistent with 2018, when the Bayou State’s LNG export capacity was just 2.65 Bcf/d, compared with 4.9 Bcf/d now. More recently, an active hurricane season has also curtailed exports. But demand for U.S. LNG is rebounding, and as LNG feedgas heads back to its previous highs and beyond, a new flow dynamic is emerging along the Gulf Coast, driven by the 1.35 Bcf/d of new export capacity in Texas that came online this year. Flows between Louisiana and Texas are reversing as an increasing amount of gas is needed on the western side of the Sabine River to feed the Corpus Christi and Freeport LNG facilities. The incremental gas demand and flow reversal will create new challenges and constraints for the region’s pipeline infrastructure as steady exports resume. Flows into Louisiana will be higher than ever, but so will flows out of Louisiana heading west to serve additional LNG demand. Today, we begin a series discussing how LNG demand is changing gas flows along the U.S. Gulf Coast.
Down by the Water – Rising LNG Exports From Texas Reshapes Gulf Coast Gas Flows
