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6/14 Watchlist: COGT CLVS SQQQ UVXY KOLD
- Thread starter KCalhoun
- Start date
HOUSTON — Ever since Russia invaded Ukraine in February, Europe has desperately tried to find new sources of natural gas, including from the United States, to reduce its dependence on Russian natural gas supplies.
Those efforts took a hit on Tuesday when an American gas company announced that it would take several months before it could repair a Texas export terminal that suffered a fire and explosion last Wednesday.
The suspension — which would affect roughly 14 percent of U.S. liquefied gas exports — was compounded by news that the Russian energy giant Gazprom would reduce its gas shipments to Germany via the Nord Stream pipeline.
The two announcements sent European gas prices 16 percent higher on Tuesday, since Europe’s prices are set regionally, not globally like oil. Natural gas prices in the United States moved in the opposite direction, plummeting more than 16 percent.
When an explosion damaged part of the Freeport LNG terminal this month, officials said it would probably take three weeks to return the plant to normal functions. Gas prices, which had more than doubled since last year, dropped modestly.
But on Tuesday, the company changed its public outlook and announced that it hoped a partial restart in 90 days was feasible.
“At this time, completion of all necessary repairs and a return to full plant operations is not expected until late 2022,” the company said in a statement.
The Freeport facility is one of seven active export terminals that send supercooled gas around the world in supertankers.
Those efforts took a hit on Tuesday when an American gas company announced that it would take several months before it could repair a Texas export terminal that suffered a fire and explosion last Wednesday.
The suspension — which would affect roughly 14 percent of U.S. liquefied gas exports — was compounded by news that the Russian energy giant Gazprom would reduce its gas shipments to Germany via the Nord Stream pipeline.
The two announcements sent European gas prices 16 percent higher on Tuesday, since Europe’s prices are set regionally, not globally like oil. Natural gas prices in the United States moved in the opposite direction, plummeting more than 16 percent.
When an explosion damaged part of the Freeport LNG terminal this month, officials said it would probably take three weeks to return the plant to normal functions. Gas prices, which had more than doubled since last year, dropped modestly.
But on Tuesday, the company changed its public outlook and announced that it hoped a partial restart in 90 days was feasible.
“At this time, completion of all necessary repairs and a return to full plant operations is not expected until late 2022,” the company said in a statement.
The Freeport facility is one of seven active export terminals that send supercooled gas around the world in supertankers.
The explosion at the Texas plant, on Quintana Island, did not cause any injuries. The fire ignited in some pipes between gas storage tanks and dock facilities used to transport the gas abroad. Experts say it appears that the explosion occurred because of a rupture of piping and the ignition of a gas vapor cloud.
Various state and federal agencies are investigating the explosion and fire, including the Pipeline and Hazardous Materials Safety Administration, better known by its acronym PHMSA. PHMSA has wide discretion in deciding whether a facility can come back on line, sometimes overriding an operator’s assessment.
Energy experts warned that problems at the Texas plant could take a long time to fix. A fire at the Kinder Morgan terminal in Georgia took part of its operations off line for about 18 months because of difficulties with finding parts.
The Freeport plant has had problems over the last year with delayed maintenance and intermittent outages that were thought to be connected with impurities in some of its gas supplies.
The United States has long exported gas to Canada and Mexico by pipeline, while liquefied natural gas exports have gradually grown over the last decade as domestic production has increased in shale fields around the country.
In recent years most of the liquefied gas exports have gone to Asia, but since the Russian invasion of Ukraine, there has been a shift in sales to Europe, which has relied on Russia for 40 percent of its gas supplies.
Four new American export terminals are under construction, while more than a dozen are waiting for the go-ahead from regulators and investors.
The temporary closing, by reducing how much gas can be exported, will add natural gas supplies in the United States, bringing some relief to residential electricity customers as well as to refineries and other industrial plants that use gas for power and as a vital raw material. Gas that otherwise would have been exported will go into storage for use next winter since households in the United States will use less natural gas for heating during the summer months.
@ckrausss
Various state and federal agencies are investigating the explosion and fire, including the Pipeline and Hazardous Materials Safety Administration, better known by its acronym PHMSA. PHMSA has wide discretion in deciding whether a facility can come back on line, sometimes overriding an operator’s assessment.
Energy experts warned that problems at the Texas plant could take a long time to fix. A fire at the Kinder Morgan terminal in Georgia took part of its operations off line for about 18 months because of difficulties with finding parts.
The Freeport plant has had problems over the last year with delayed maintenance and intermittent outages that were thought to be connected with impurities in some of its gas supplies.
The United States has long exported gas to Canada and Mexico by pipeline, while liquefied natural gas exports have gradually grown over the last decade as domestic production has increased in shale fields around the country.
In recent years most of the liquefied gas exports have gone to Asia, but since the Russian invasion of Ukraine, there has been a shift in sales to Europe, which has relied on Russia for 40 percent of its gas supplies.
Four new American export terminals are under construction, while more than a dozen are waiting for the go-ahead from regulators and investors.
The temporary closing, by reducing how much gas can be exported, will add natural gas supplies in the United States, bringing some relief to residential electricity customers as well as to refineries and other industrial plants that use gas for power and as a vital raw material. Gas that otherwise would have been exported will go into storage for use next winter since households in the United States will use less natural gas for heating during the summer months.
@ckrausss