US LNG Feedstock Gas Flows Fall to Six-Month Low
Natural gas deliveries to US liquefaction facilities fell to 5.6bn ft³/day May 24 having averaged 6.7bn ft³/d from May 1 through May 26, according to data by IHS Markit. "This was the lowest level of LNG feedgas deliveries since October 2019, despite 2bn ft³ baseload liquefaction capacity that was commissioned over this period," said the US Energy Information Administration in its weekly note May 28.
US wholesale prices are low, averaging around $1.75/mn Btu over the week; but after liquefying and shipping the LNG to Europe or Asia they are loss-making on a cash basis, leading to a slew of cargo cancellations. Most of the liquefaction capacity has however been presold to the shippers on term contracts, who pay regardless of the use. Total gas supply from all sources was roughly the same year on year in the week May 21-27, at 93.5bn ft³/d.
Twelve LNG vessels (five from Sabine Pass; two each from Cameron, Corpus Christi, and Cove Point; and one from Freeport) with a combined LNG-carrying capacity of 43bn ft³ departed the US May 21-28, 2020, according to shipping data provided by Marine Traffic.
The EIA expects US LNG exports to continue through the summer as buyers have cancelled as many as 20 cargoes for June delivery and up to 45 cargoes for July delivery, according to trade press reports.
Before the pandemic led to lockdowns worldwide, LNG feedgas and exports set new records in the winter. In January, a record 74 LNG export cargoes were loaded; this was down to 66 in February, up again at 71 in March but an estimated 61 cargoes in April.
EIA also estimates that 40 cargoes were loaded between May 1 through May 24, which amounted to an estimated 5.8 bn ft³/d of LNG exports, compared with 7.0bn ft³/d exported over the same period in April. The Sabine Pass, Corpus Christi, and Cameron terminals had the largest reductions in vessel loadings in May. Announced cancellations of 20 LNG export cargoes in June and up to 45 cargoes in July could reduce LNG exports by an estimated 2.3bn ft³/d in June and more than 5.0bn ft³/d in July.