Hurricane Beryl barreled ashore early Monday morning (July 8) south of Houston, causing widespread power outages and moderate flooding in southeastern Texas. The storm has wiped out a large amount of gas demand for LNG and power generation and disrupted operations at ship channels supporting LPG exports.
Beryl made landfall as a Category 1 hurricane with winds of 80 miles per hour, toppling trees and power lines and leaving 2.7 million people without power on Monday in the greater Houston area. Centerpoint Energy and Texas officials said Beryl knocked down 10 transmission lines and many more local power lines across the region.
Beryl also has dented the bustling LPG export trade based in southeastern Texas. The Houston Port Bureau reported the Houston Ship Channel closed as vessel transit services suffered significant damage, limiting their ability to monitor ship transits. Activity at the Freeport, Galveston and Texas City ports have also been disrupted, leading to significantly lower tanker traffic.
East Daley Analytics estimates Beryl has cut natural gas demand by a total of ~12.4 Bcf (2.5 Bcf/d) for five days through Thursday (see figure). Freeport LNG shut down on Sunday (July 7) ahead of the storm, and pipeline nominations to the facility have remained at zero since then. The Freeport facility normally receives about 1.9 Bcf/d of natural gas.
Lost gas-fired power burn also has been significant, with 1.2 million residents still without power on Thursday. The Electric Reliability Council of Texas (ERCOT) has reported between 16.5 GW and 19.5 GW of outages so far this week. System-wide electricity demand also has been well below day-ahead forecasts. About 50% of the generation fleet in Texas is fired by natural gas. Assuming the outages uniformly impaired power facilities, we see about 0.8 Bcf/d of lost gas demand for generation starting Monday.
On the supply side, we are monitoring ~0.3 Bcf/d of shut-in gas production, mainly in pipe samples covering the offshore Gulf of Mexico. But on net, Beryl has been bearish for the gas market. We also expect channel disruptions will lead to reduced LPG and ethane exports. – Jack Weixel and Christina Adjiman.
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