U.S. exports of LNG fell to an average of 3.1 billion ft3/d in July 2020, according to the U.S. Energy Information Administration (EIA). The announcement followed a record high of 8 billion ft3/d in January 2020.
The EIA expects U.S. LNG exports to remain at low levels for the next few months. According to trade press reports, 45 cargoes have been cancelled for August shipments and an estimated 30 cargoes have been cancelled for September shipments.
It said: “Global natural gas demand has declined in response to COVID-19 mitigation efforts. High natural gas storage inventories in Europe and Asia and an ongoing expansion of global LNG liquefaction capacity have also contributed to international natural gas and LNG prices reaching all-time historical lows.”
It added that because most U.S. LNG exports are traded in the global spot market, low global spot and forward prices for natural gas and LNG made exports from the U.S. uneconomical.
July exports were similar to LNG exports in May 2018, when the available liquefaction capacity was about one-third of the current capacity. During the week of 12 – 18 July 2020, LNG weekly exports were loaded by only four vessels for a total of 2 billion ft3/d — the same levels as the second week of December 2016.
Based on the number of cargoes loaded in June and July and the available liquefaction capacity in operation, EIA estimates that about 46 cargoes were cancelled in June and about 50 cargoes were cancelled in July 2020, exceeding the reported number of expected cancelations in both months. The most affected LNG terminals were Sabine Pass in Louisiana and Corpus Christi and Freeport in Texas, where the utilisation of liquefaction capacity in July averaged 33%, 28%, and 6%, respectively.
In the August Short-Term Energy Outlook, EIA forecasts that U.S. LNG exports will return to pre-COVID levels by November 2020 and remain relatively high (at about 8 – 9 billion ft3/d) through this coming winter and into 2021.
For more information visit www.eia.gov