U.S. LNG DEMAND UP

PLATTS - 02 Nov 2020 - US LNG feedgas demand has topped 10 Bcf/d for the first time as exports surge amid robust Asian end-user prices.

The milestone for gas deliveries to major liquefaction terminals recorded Oct. 31 and Nov. 1, before total feedgas slightly retreated below that threshold Nov. 2, reflects the continuing rebound by the industry from the downturn in activity earlier in the year due to the coronavirus pandemic. Freeport LNG in Texas recently loaded and exported its 100th cargo since starting up in 2019.

As US LNG production continues to recover from a series of unplanned outages and hurricane disruptions, cargoes are likely to increasingly target Asia, thanks to strength in the Platts JKM netback. The JKM for December was assessed down Nov. 2 for the fifth consecutive day, at $6.800/MMBtu, though it is still up substantially from its historic low at $1.825/MMBtu on April 28.

Total US feedgas deliveries stood at 9.85 Bcf/d on Nov. 2, down from 10.02 Bcf/d the day before and 10.37 Bcf/d on Oct. 31, S&P Global Platts Analytics data show.

The strong activity was broad-based across the six major liquefaction terminals. There is still room to grow, once Freeport LNG resumes production from Train 1, shut after a small fire was discovered following a trip of a low-pressure mixed refrigerant compressor on Oct. 21. Repairs were continuing, with the possibility Train 1 could be back online later this week, spokeswoman Heather Browne said Nov. 2.

Freeport LNG shipped its 100th cargo on Oct. 30, 13 months after loading its first cargo in September 2019. The three-train facility began full commercial operations in May.

With US exports incentivized by strong netbacks, the Panama Canal Authority has been working to ease extended wait times first observed during the second half of October for some LNG tankers passing through without a reservation.

The delays for a small portion of vessels transiting the shortest route from the US Gulf Coast to East Asia have been blamed on fog, higher-than-average arrivals and additional safety procedures to prevent further spread of the coronavirus.

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