Global natural gas benchmarks relaxed once again as cargoes from Freeport LNG Development LP returned to the market and the pace of worldwide imports of the super-chilled fuel heated up along with the temperatures.
Feed gas flows to the South Texas liquefied natural gas facility have ticked up since July 17 after the 2.1 Bcf/d capacity facility was shut down in response to Hurricane Beryl’s impact on the Gulf Coast. Since then, flows to Freeport LNG have increased to around 13% of capacity, according to Wood Mackenzie pipeline data, indicating that at least one train may be online.
A ship controlled by Glencore plc departed from Freeport over the weekend, while another cargo left Monday for Japan, according to Kpler ship tracking data.
While the state of healthy LNG storage in Europe and Asia and limited impacts to the rest of the Gulf of Mexico from former Hurricane Beryl capped volatility, Rystad Energy analyst Wei Xiong said Freeport’s outage helped weigh on supply concerns last week.
Similar concerns were not expected to boost prices this week, but the trend of extended outages at Freeport have obscure estimates of when all three trains may return to service, Xiong added.
“Given its record of impacts, the prolonged restart this time and uncertainty about its full resumption have raised fresh concerns over US LNG supply risk,” Xiong said.
The Dutch Title Transfer Facility natural gas futures contract for August dropped to near $10.16/MMBtu Monday. August prices had hovered above $10.70 for most of last week before beginning to dip Friday.
Analysts with trading firm Energi Danmark noted Europe’s natural gas and power markets were likely to be bearish at the beginning of the week, with trading seemingly influenced more by Friday’s worldwide informational technology issues and dry weather over the continent impacting hydroelectric output than supply worries.
Asian LNG prices also edged down near the $12 mark.
While prices have continued to dip, LNG trade volumes have ticked up after more than a month-long slump. The pace of shipments began ramping up last week, with gas buyers importing more than 8 million metric tons (mmt) between July 15-21, according to Kpler data. It was the highest weekly total volume since late April.
Heading into this week, LNG trade volumes are expected to skyrocket to more than 9.4 mmt by July 28, according to Kpler predictive data. The majority of those volumes, around 6.5 mmt, are headed to Asia as Japanese and South Korean buyers return to the market.
Elsewhere on the Gulf Coast, a force majeure on TC Energy Corp.’s ANR Pipeline Co. briefly limited feed gas flow to Venture Global LNG Inc.’s Calcasieu Pass. Nominations rebounded Monday, with utilization on the TransCameron pipeline rising to 56% Monday, according to Wood Mackenzie data.
Overall, LNG feed gas demand in the United States reached 11.45 million Dth/d Monday, the highest point since before Beryl passed through the Gulf Coast.
Farther down the coast, the first shipment of Texas natural gas liquefied at a Mexican export terminal could be headed to a destination. The Energos Princess, a tanker owned by New Fortress Energy Inc. (NFE) and Apollo Global Management’s shipping joint venture, docked at the Fast LNG terminal offshore Altamira last week.
As of Monday, the ship left Altamira’s anchorage with at least a partial cargo and was passing between Florida and Cuba, according to Kpler data.
Kpler’s Charles Costerousse, senior gas market data analyst, told NGI the vessel spent 12 hours docked near NFE’s floating storage unit and likely took on at least a partial load. However, “the volume is yet to be determined.”
In other LNG development news, Woodside Energy Group Ltd. made headlines Sunday evening with a deal to acquire Tellurian Inc. and its Driftwood LNG project.
Woodside agreed to pay around $900 million for the company in a deal expected to close by the end of the year, according to Tellurian. Woodside disclosed it was targeting a final investment decision on the first phase of Driftwood by March of next year.
Along with the sale agreement, Woodside agreed to loan Tellurian up to $230 million until the middle of December, or until the deal is complete, to continue work on Driftwood LNG.
