As the snow stopped falling along the Gulf Coast on Jan. 22, people in the energy industry got a clearer picture of Winter Storm Enzo’s effects on business.
Port traffic along the Gulf Coast energy corridor was largely shut down beginning on the evening of Jan. 20. Ports had various plans on when to return to business.
The winter storm hit just about every port on the Gulf Coast that handles petrochemical traffic, according to Argus, an analytical firm that tracks the energy industry.
In Texas, the ports of Houston, Galveston, Texas City and Freeport all suspended operations after the storm hit on the evening of Jan. 20.
The Port of Houston announced it would potentially resume operations on the evening of Jan. 22. Other ports had not announced plans.
The Port of Freeport announced it was open, but that limited activity was expected because of the weather. Freeport LNG, meanwhile, reported a shutdown on Jan. 21 due to a power feed problem.
Freeport LNG, thanks to its size and capacity of 16.5 metric tons per annum (mtpa), can affect the global price of LNG. The plant is run on electric power, and power outages can cause major swings in output.
On Jan. 21, the storm also closed the Sabine-Neches Waterway, which makes up the Texas-Louisiana border and provides Gulf access to refineries in Port Arthur, Beaumont and Cheniere’s Sabine Pass LNG export terminal. Louisiana’s Port of Lake Charles closed on Jan. 20, Argus reported.
Hart Energy requests for comment were not immediately answered by port authorities on Jan. 22.
The Port of New Orleans also closed and management announced it would remain shut through at least Jan. 23.
The Port of Corpus Christi, which did receive snow but was on the western edge of the storm, shut operations the evening of Jan. 20 but re-opened the next day.
The overall international effects of the storm are likely to be temporary, Hinds Howard, analyst for CBRE Investment Management, told Hart Energy via email.
“International impacts generally are going to be limited, with the opportunity to catch up when the ports re-open and with domestic demand able to sop up extra supply,” Hinds said.
Staying warm
As far as the domestic market for natural gas, analysts expected a major boost in demand for the week.
“On the demand side, a few interesting things have happened,” said Jack Weixel, senior director at East Daley Analytics (EDA), in an email to Hart Energy.
Power demand for the Electric Reliability Council of Texas (ERCOT), the state’s energy grid regulator, hit 70 gigawatts (GW) on Jan. 21, compared to typical winter loads in the mid-50 GW range, Weixel said. Nationwide, some electric power producers reported they were burning oil to keep up with demand.
“That is a summertime load profile, and you don’t have your solar resources available along with marginal wind generation, so you’re going to lean on gas, coal and anything else you can to generate power,” Weixel said.
“This storm had the potential to be Uri-like, but did not have the stamina,” Weixel said, referring to the winter storm in 2021 that shut down power for days across Texas. This time, the electric grid was more resilient, meaning gas demand remained high as power stations continued running.
The freezing weather also left natural gas production largely unaffected.
EDA’s Alex Gafford said that basins across the Lower 48 had been affected by freeze-offs closing down production. Pipelines in the Anadarko, Appalachia, Permian and Rockies all reported smaller loads. Samples in the Permian were down by about 9%, or 550 MMcf/d, on average since Jan. 18.
However, other plays such as the Haynesville Shale reported boosts in production since December.
“This translates to about 500 MMcf/d of production growth to partially offset freeze-offs elsewhere,” Gafford said.
Howard said producers could generally expect to see a boost in spot prices at different hubs around the U.S.
“This type of thing is generally very bullish for natural gas prices in the short term, with spot prices in certain constrained areas usually spiking for short periods of time,” he said.