U.S. LNG exports and natural gas deliveries to Gulf Coast terminals are ticking up after a slump during June maintenance events, but global demand remains muted.
Deliveries of feed gas to the Gulf Coast have increased since the beginning of the month, indicating that maintenance at Cheniere Energy Inc.’s Sabine Pass liquefied natural gas facility has likely ended. Overall deliveries to U.S. LNG facilities rose from 11.8 Bcf/d on June 26 to 13 Bcf/d on Monday, according to NGI calculations.
Total feed gas deliveries to Sabine Pass averaged 2.91 Bcf/d through June, compared to 4.43 Bcf/d in May, NGI analyst Josiah Clinedinst said. So far in July, Sabine Pass deliveries have averaged 4.12 Bcf/d.
Along with an increase in feed gas, the volume of LNG sent out from U.S. terminals reached 1.69 million tons (Mt) the week beginning June 26, according to data from Kpler. It was a five-week high point after U.S. exports dropped more than 7% between May and June.
U.S. exporters are on track to send out 5.8 Mt of LNG cargoes so far in July, according to Kpler’s predictive data.
Sabine Pass wasn’t the only LNG facility to see declining export volumes during June. Venture Global LNG Inc.’s Calcasieu Pass export terminal in Louisiana hit a 10-month low in shipments, sending out 0.58 Mt to Asia, Europe and South America, according to Kpler.
Kpler analysts attributed the drop to possible repairs to the facility’s heat recovery system. Venture Global reported to regulators in March that it was experiencing operational issues that would require its equipment manufacturer to start an extensive investigation, extending its commissioning phase. The company started selling commissioning cargoes to the spot market last March.
The drop in U.S. exports and prolonged maintenance at key natural gas facilities in Norway helped push Asian and European prices slightly upward during June. The Dutch Title Transfer Facility rose to the high $11/MMBtu range at the end of last month, while a brief spree in purchases from Asian buyers helped drag prices in the Pacific above $12/MMBtu.
However, as supplies increase both from LNG producers and Norway, the prompt TTF has dropped down to the low $10/MMBtu range. Several financial institutions have adjusted their forecasts for global gas prices during the summer after concluding the European Union (EU) may meet its storage goals well before November.
Analysts with Energi Danmark wrote in a note that as EU storage hovers around the 79% mark and pipeline supplies return, spot and front month contracts are being weighed down.
“Longer dated contracts were supported into neutral to slightly firmer price levels as uncertainties around LNG supplies in the coming months ahead of the next winter season continue to linger,” analysts wrote.
