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- BP and Shell imported LNG from Trinidad amid U.S. winter storm
- Spot gas prices hit all-time highs due to increased demand and frozen wells
- Elba Island and Cove Point received unusual LNG imports for high-price opportunity
HOUSTON/NEW YORK, Jan 28 (Reuters) – Several liquefied natural gas companies took the unusual step of importing natural gas into the U.S. over the past week in an apparent move to capture record prices that occurred as a brutal winter storm brought bitter cold to much of the country, according to analysts and ship tracking data from financial firm LSEG.
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BP (BP.L) and Shell (SHEL.L), which together own 90% of Trinidad and Tobago’s flagship Atlantic LNG plant, brought gas from Trinidad to U.S. plants amid the freeze, LSEG data showed.
Spot gas prices soared in several regions across the country to all-time highs as demand for the fuel rose to near-record levels and homes and businesses cranked up their heaters while output dropped to a two-year low as oil and gas wells froze. Gas futures , meanwhile, surged 124% on Tuesday to a three-year high.
Appearing to take advantage of that high-price opportunity, LNG companies sent cargoes to the Elba Island LNG terminal in Georgia, Cove Point in Maryland, Everett in Massachusetts and Canaport in New Brunswick, Canada, most of which came from Trinidad and Tobago, according to the LSEG data.
Everett and Canaport are import terminals, but it is unusual to send cargoes to Elba Island and Cove Point, which generally export gas from the U.S. to the rest of the world.
The U.S., which is now the world’s largest LNG exporter, usually imports up to three cargoes a year from Trinidad to Everett because of pipeline infrastructure challenges, but very rarely to Cove Point and Elba which are exporters of LNG.
On Wednesday, the Paris Knutsen is expected to arrive at Kinder Morgan’s (KMI.N) Elba Island with a cargo from Trinidad and Tobago, according to LSEG ship tracking data. Elba Island stopped taking in gas from the U.S. grid over the weekend of January 24-25 as the winter storm raged across the U.S. Southeast.
Before the weekend, Elba had been pulling in about 0.4 billion cubic feet per day (bcfd) of gas from the U.S. gas grid. Elba has the capacity to turn about 0.4-bcfd of gas into LNG. The unit of UK oil major Shell (SHEL.L) has contracts to both liquefy gas and regasify LNG at Elba Island.
Shell said it was unable to comment before an earnings presentation due to take place next week.
Cove Point, which also exports LNG, pulled in at least two cargoes so far this winter, one in December and one in January. Both cargoes came from Trinidad, according to LSEG data. The last time Cove Point took in a cargo was in December 2024, according to EIA data.
BP-owned British Listener was nearing the U.S. on Wednesday with the superchilled gas having left Trinidad before dropping off some LNG in Colombia.
BP said it does not comment on trading and shipping movements.
“This shows the problem with the Jones Act because the most efficient thing would be to move LNG cargoes from the Gulf coast to the East coast,” said Jason Feer, the head of business intelligence at shipping company Poten and Partners.
The Act prevents U.S. LNG from being sold between U.S. ports.
It is extraordinary to see the world’s largest LNG exporter importing LNG, but with prices over $100 per mmbtu it made sense to bring in cargoes, said Feer.
One billion cubic feet of gas can supply about 5 million U.S. homes for a day.
Reporting by Curtis Williams in Houston and Scott Disavino in New York; Editing by Nathan Crooks and Deepa Babington
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