Cheniere's Sabine Pass receives first LNG tanker since Harvey

Houston (Platts)--6 Sep 2017 344 pm EDT/1944 GMT

Cheniere Energy was preparing Wednesday to ship its first LNG export cargo from its Sabine Pass terminal in Louisiana since Harvey came ashore along the Gulf Coast as a powerful hurricane almost two weeks ago.

The Rioja Knutsen tanker was allowed to dock at the terminal in Cameron Parish after being held in a holding pattern with numerous other vessels in the Gulf of Mexico due to strong currents and high water levels in the Intracoastal Waterway that feeds the facility.

"We managed to sneak her in today, barely," said Daniel Dubois, chief dispatcher for Sabine Pilots, which navigates vessels along the channel. "We're probably not going to do another one until she sails. The conditions aren't exactly favorable."

Extra tugboats were required to guide the Rioja Knutsen to the Cheniere dock safely, Dubois said. If loaded immediately, it could depart as early as Thursday, he said. A Cheniere spokesman, Eben Burnham-Snyder, confirmed the arrival of the tanker but said he had no update on timing.

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"It is gradually easing," Dubois said of the vessel restrictions. "We've had some diversions when they found out it was going to be a while."

The tanker would be the first to depart Sabine Pass since August 24, the day before Harvey came ashore and delivered five days of strong wind and punishing rain to the Houston area, before moving on to East Texas and southwest Louisiana. The Neches River, which feeds the Intracoastal Waterway, rose to record levels, making it dangerous for tankers with a deep draft to pass under bridges.

According to S&P Global Platts' trade flow software, cFlow, as of Wednesday three LNG vessels near Sabine Pass listed the terminal as their destination, while another three vessels farther out in the Gulf also listed Sabine Pass as their destination.

Estimates for Sabine pass implied LNG storage rose to capacity on September 1, and have remained there since, as Cheniere continued to produce LNG during the storm but was unable to export it, data compiled by Platts Analytics' Bentek Energy show. As capacity is likely maxed out at the facility, feedgas volumes have declined significantly, averaging just 0.3 Bcf/d since September 1 compared to 1.8 Bcf/d in the 30 days prior, Platts Analytics data show.

Feedgas volumes are expected to begin returning to previous averages in the days ahead, now that the vessel restrictions are easing. Continued strength in netbacks suggests Sabine Pass would be fully utilized if operationally possible.

Cheniere became the first US exporter of LNG produced from shale gas when Sabine Pass launched its first cargo in February 2016. To date, it has exported 179 cargoes to two dozen countries, Platts Analytics data show.

Mexico, which is heavily reliant on US gas supplies for power generation, has been a key recipient of LNG from Sabine Pass.

Besides LNG cargoes, pipeline flows from the US to Mexico also were disrupted due to the storm, though several operators reported Wednesday that their systems and flow levels were returning to normal.

--Harry Weber,

--Kyle Gatton,

--Edited by Richard Rubin,

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