September's Plant Issues Cause US LNG Export Dip

U.S. LNG Exports: Trends and Global Market Impact

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In a cheerful turn of events, U.S. liquefied natural gas (LNG) exports experienced a slight dip in September compared to August, mainly attributed to intermittent outages at four gas-processing facilities, as per LSEG vessel tracking data.

During the previous month, a total of 7.12 million metric tons of superchilled gas departed from U.S. ports, a minor decrease from the 7.32 million metric tons exported in August, according to LSEG data.

Interestingly, Europe continued to be a prominent destination for U.S. LNG exports in September, receiving a consistent 52% share of the cargoes, mirroring the August figures. Meanwhile, Asia maintained its steady reception of 30%, aligning with the previous month's statistics.

The allure of U.S. gas has been growing in Europe ever since Russia's Ukraine incursion disrupted pipeline supplies and led countries to explore alternatives to Russian energy exports.

September saw a modest upswing in exports to Latin America, accounting for 8% of total exports, compared to 7% in August. This boost was driven by increased purchases from Colombia, as indicated by preliminary data.

Notably, in the first half of this year, the U.S. proudly reclaimed its title as the world's foremost LNG exporter, surpassing competitors like Australia and Qatar, according to recent data from the U.S. Energy Information Administration.

Interestingly, fewer ship owners opted for the Panama Canal route to reach Asian markets in September, choosing instead to embark on longer journeys around South Africa or passing through the Suez Canal, according to the data.

Export volumes experienced a decline due to maintenance outages at key facilities, including Freeport LNG, Cheniere Energy's Sabine Pass and Corpus Christi plants, and Berkshire Hathaway Energy's Cove Point export facility.

During the previous month, Freeport LNG, the second-largest U.S. LNG exporter, was offline for nearly a week, while Cheniere's Corpus Christi operated at reduced capacity for four days. The largest U.S. LNG facility, Sabine Pass, also operated at reduced capacity for one day. Ongoing maintenance at Berkshire Hathaway Energy's Cove Point facility in Maryland further contributed to the decrease in LNG exports in September.

Nevertheless, gas flows to the seven largest U.S. LNG export plants increased to an average of 12.6 billion cubic feet per day (bcfd) in September, up from 12.3 bcfd in August. While this didn't reach the monthly record of 14 bcfd set in April, it's a positive sign of resilience in the industry.

In terms of prices, U.S. spot prices remained relatively stable in September, with the Henry Hub benchmark averaging $2.64 per million British thermal units (mmBtu), a modest increase from $2.58 per mmBtu in August, according to LSEG data.

Asian prices showed signs of upward movement, driven by tightening supply in Europe and increased demand in Asia, as highlighted in a September market update by consulting firm Rystad Energy. Notably, China has steadily ramped up its LNG and coal imports throughout the year, bolstered by positive industrial production figures in August, challenging earlier pessimistic economic forecasts, according to Rystad's analysis.

Source : Reuters (Reporting by Curtis Williams)