US LNG exports stagnate in July despite higher LNG price
The 'July rally' in gas prices was not able to be seized by American LNG producers as maintenance and a seasonally lower output kept export volumes virtually unchanged.
According to preliminary data, U.S. liquefied gas exports fell to 10,48 million metric tonnes (MT) from 10,6 MT in the previous month.
The summer is a time when exporters do maintenance because the warmer temperatures make it harder to supercool gas into liquid form. The year 2018 was no different, as plants, including the third largest export facility in the country, Freeport LNG, took the opportunity to perform maintenance.
Buyers in Asia and Europe both paid significantly higher prices for LNG. According to LSEG, the Asian benchmark Japan Korea Marker averaged?million British Thermal Units at $19.10 in July. This was a significant premium over Europe's Dutch TTF Benchmark, which averaged?million British Thermal Units at $18.07, according to LSEG. In June, JKM averaged 17.33 per mmBtu while TTF averaged 13.19.
Jason Feer is the head of business intelligence for?Poten and Partners. He told reporters on Monday that "U.S. Projects in the past year or two were running above their nameplate capacity and, although they'd like to produce even more, they don't want to risk unscheduled repairs down the line."
Europe? remained the top destination for U.S. cargoes, as the continent continued replenishing gas inventories in preparation for winter. The U.S. exported nearly half its LNG to Europe, with shipments to Europe increasing to 4,76 MT from 4,41 MT.
Asia remained the second largest market for LNG with 3.32 MT, up from 3.25 MT in the previous month. The higher JKM premium usually encourages traders and shippers to divert cargoes to Asia. However, the limited growth of exports indicates that sellers have little uncommitted LNG to take advantage of the arbitrage opportunity.
Latin America was one of only a few regions to see a stronger increase in U.S. purchases?in July. Exports to Latin America grew to 1.07 MT, up from 0.96 in June. Winter demand?in Southern Hemisphere?was increasing. Brazil led the buying activity.
According to LSEG's ship tracking data, the increase was despite increased competition from Trinidad and Tobago. Atlantic LNG Train 4 returned to operation and shipped over 0.5 MT?? of LNG to Latin American market during the month.
Egypt, which is a major purchaser of U.S. gas, as it tries to relieve domestic shortages this year, has continued to be a top destination. Imports fell, however, from a record 1.06 MT in June, to 0.63MT?in?July, although Egypt remained one of the biggest?individual buyers of U.S. goods.
According to LSEG, a cargo of LNG was shipped to Senegal. However, several ships carrying a total of 0.63 MT were still at sea and had yet to declare a destination at the end July. Curtis Williams, Houston; Nathan Crooks, Deepa Babington and Deepa Crooks edited the report.
(source: Reuters)
