US LNG export terminal utilization falls from recent high, though still robust

Utilization was reduced Dec. 30 at the biggest US liquefaction facility, S&P Global Platts Analytics data showed, as fog forced pilots that direct tankers along the channel feeding the terminal to suspend service.

Outbound traffic at Cheniere Energy’s Sabine Pass export terminal in southwestern Louisiana was expected to resume once the fog lifts, according to a notice to shippers.

Overall US LNG export activity remained robust, with FOB cargo values almost four times higher than at the same time a year ago even after recent sharp declines in prices in destination markets. Shipping rates to Europe and Asia have fallen dramatically over the last month, keeping netbacks to the Gulf Coast strong. Cheap US feedgas also was benefiting FOB cargoes.

Platts assessed the Gulf Coast Marker for February at $26.000/MMBtu Dec. 30, down $3.85 day on day and nearly $29 below the all-time high set just nine days earlier Dec. 21. While the current value is the lowest since Nov. 22, it is up sharply from $7.195/MMBtu the same day a year ago.

Panama Canal congestion heightened slightly day on day, with the maximum wait Dec. 30 for unreserved LNG tankers at two days northbound and four days southbound, according to the Panama Canal Authority. The NYMEX Henry Hub prompt-month contract dropped 37 cents after the January contract rolled off the board Dec. 29, with NYMEX February trading at $3.65/MMBtu as of the afternoon of Dec. 30. The NYMEX Henry Hub prompt-month has had a tumultuous year, spending the first five months of 2021 below $3/MMBtu before kicking off a rally that saw prices rise into the $4-$6/MMBtu range. A mild start to the winter demand season punctured the run of higher prices, with the prompt-month falling below $4/MMBtu for most of December.

Near term in Asia, buyers from China, Japan, and South Korea remained on the sidelines, while cargo availability was reported to be high for prompt deliveries across the late January to early February period. In Europe, meanwhile, mild early winter weather was outweighing the impact of reduced Russian pipeline gas flows to the Continent on already sapped inventories.

Based on nominations for the morning cycle, total US LNG feedgas demand stood at 11.75 Bcf/d Dec. 30, down about 275 MMcf/d versus Dec. 29 and down 1.35 Bcf/d from the record high of 13.1 Bcf/d set Dec. 19, Platts Analytics data showed. The latest decline was driven by a dropoff in utilization at Sabine Pass. Pilots reported that service was suspended along the channel that feeds the terminal during the evening of Dec. 29 because of fog and remained suspended as of midday Dec. 30. The fog was expected to last through Jan. 1, the notice to shippers said.

Aside from Sabine Pass, the other five major US liquefaction facilities appeared to be operating at or near full capacity Dec. 30, based on feedgas deliveries. A seventh terminal, Venture Global LNG’s Calcasieu Pass, continued commissioning equipment ahead of startup. Feedgas deliveries to the terminal stood at about 25 MMcf/d Dec. 30, nearly flat with the day before. While still too low for production, deliveries have crept up over the previous week.

According to Venture Global, the Louisiana terminal was about 91% complete as of the end of October. All 18 liquefaction modules have been received from Italy and set on foundations.
Source: Platts