US LNG feed gas demand rebounds above 11 Gcf / d amid high prices for end users
US LNG feed gas demand peaked in more than three weeks on June 23, as deliveries to Cheniere Energy’s Sabine Pass terminal rebounded and maintenance appears to have ended. completed at Sempra Energy’s LNG facility in Cameron, according to data from S&P Global Platts Analytics.
Both facilities are in Louisiana. A spokeswoman for Cheniere declined to say whether Sabine Pass – the largest liquefaction facility in the United States – had been subject to scheduled work.
The large differentials between the price of LNG in end-user markets in Asia and Europe and feed gas prices based on the US Henry Hub have encouraged robust export activity from the US Gulf and Coast coasts. Atlantic. Platts Analytics expects these trends to persist through the rest of the summer.
Feed gas deliveries to the six major US liquefaction facilities totaled 11.04 Bcf / d, based on nominations for the morning cycle. This is an increase of 1.6 Bcf / d from June 22 and the highest level since June 1, according to data from Platts Analytics.
The day-to-day jump is largely due to the rebound in flows towards the Sabine Pass. Flows to Cameron LNG were stable above 1.8 Gcf / d for the fourth day in a row, suggesting that maintenance to the facility, which a spokesperson had previously confirmed, was completed after about two weeks .
According to data from Platts Analytics, US Gulf Coast net LNG revenues now strongly favor JKM during the rest of the summer, which should encourage record trade flows from the Atlantic Basin to the Pacific Basin, and will likely require a strong resumption of eastward travel around the basin. Cape of good hope.
The momentum was fueled in part by continued strength in Chinese imports, strong demand for LNG driven by South Korea’s power sector, and stagnant Asian LNG supply year-over-year. .
Latin America is another source of strong LNG demand. Massive hydropower shortages in Brazil due to the country’s worst draft in nearly a century and a poor upstream recovery in Argentina have created additional strain on global LNG spot markets this summer, the data showed. by Platts Analytics.
In the United States, feed gas demand could see a further surge by the end of the year, when Venture Global’s Calcasieu Pass terminal in Louisiana and Sabine Pass’s sixth liquefaction train are expected to begin production. production. This timeline would be about a year earlier for both.
Elsewhere, commercial activity has recently resumed for some developers of new liquefaction terminals proposed for construction in the United States.
Tellurian will soon be signing a long-term lease with the Port Authority where its proposed Driftwood LNG facility is to be built in Louisiana so that it can begin preparing the site for full construction. NextDecade continues to target a final investment decision on an initial two-train phase of its Rio Grande LNG project in Texas by the end of 2021.
After a two-year lull in trading activity, Tellurian signed buy and sell agreements – one week apart in late May and early June – with commodity traders Gunvor and Vitol for a total of 6 million tonnes / year of driftwood supply. NextDecade has not announced any long-term drawdown agreement related to Rio Grande LNG since a 2019 agreement with Shell.