The Trump administration's big push to export more U.S. natural gas to Europe, Asia, and beyond may prove impervious in the aftermath of Hurricane Harvey's wrath, as the country's leading exporter of the gaseous fossil fuel on the Gulf Coast was able to continue business as normal during the storm.
Amid the chaos that typically accompanies the aftermath of such a record-breaking storm, the Cheniere liquefied natural gas terminal at Sabine Pass was virtually overlooked. Located on a river where Louisiana borders Texas, it sustained minimal damage and continued operating even as refineries in nearby Port Arthur, Texas were shutting down due to flooding.
Cheniere's second site that's under construction in Corpus Christi, Texas, directly in the path of the storm, sustained only minimal damage as well.
"[W]e are pleased to report that Corpus Christi saw no major impacts, and no interruption of LNG production at Sabine Pass has been experienced," said Jack Fusco, president and CEO of Cheniere, in a statement earlier this week.
"Moving forward, Cheniere will focus on helping our hometown of Houston recover and the communities around Corpus Christi rebuild," Fusco added. The company diverted market and trading activity from its hub in Houston to its offices farther north in Dallas, where it kept up with its contract activity "to ensure obligations are met to continue producing LNG at Sabine Pass."
A spokesman for the company told the Washington Examiner on Friday that the site may have been lucky in some ways, but primarily it was "lots of design and operation advantages and preparations" that made it resilient.
The Sabine Pass facility owned by Cheniere is the largest exporter of natural gas in the U.S., and is often touted by the administration as part of President Trump's pro-growth "Energy Dominance" agenda that holds energy exports as its cornerstone.
On Friday, Energy Secretary Rick Perry issued a proposal to streamline the permitting process on some shipments of natural gas to Latin America. "The Trump Administration is focused on finding ways to unleash American energy and providing a reliable and environmentally friendly fuel to our trading partners who face unique energy infrastructure challenges," Perry said in issuing the new plan. "The Department of Energy and this Administration are wholeheartedly committed to strengthening the energy security of the United States and our allies."
Sabine Pass is the first in an emerging fleet of export facilities slated to be opened in the next year or two.
On Aug. 25, Reuters reported that one of Cheniere's terminal facilities serving a delivery contract for a South Korean utility had been closed for maintenance, but would not impact its obligations to the customer, said a spokesman. The terminal is rated to withstand hurricane force winds up to 150 miles per hour, and 180 mph gusts, and is rated to withstand storm surge.
Traders said the Sabine facility was balancing demand between servicing areas at the site, called trains, to meet the shortfall in capacity during the maintenance event, which the company would not provide further details in describing. Sabine has four trains built to turn natural gas from its gaseous state to a liquid for shipment on large, specially-designed liquefied natural gas, or LNG, tankers. It plans to have between five and six trains opened at the site by the end of the decade, with an additional three at Corpus Christi once that facility is open.
Even though Sabine wasn't directly in the path of the storm, one reason it can sustain operation, even amid more severe weather, is based on how it supplies itself with natural gas, which the natural gas industry said during the storm is typically more resilient to flooding than oil and liquid fuels facilities.
Natural gas distribution utilities say gas lines tend to be underground and virtually impervious to hurricanes. Cheniere also buys all of its natural gas using a number of different pipelines that ship natural gas from both regional sources and those east of the Rocky Mountains. The diversity of supply helps to ensure that it can meet customers' export demands even if there are outages.
"As a result, Cheniere is expected to become one of the largest buyers of natural gas in the U.S. once all of the trains are operational," the company's website said.
It added: "We have built a world class operation to advantageously acquire feedstock for the terminal. Our gas procurement business has secured long-term transportation capacity on many pipelines to ensure reliable gas deliverability and diverse access to multiple producing basins. We have also entered into several supply arrangements to purchase natural gas from suppliers at prices discounted to applicable market indices."