U.S. liquefied natural gas (LNG) exports are set to continue declining through the summer, with reductions estimated above 5 billion cubic feet per day (Bcf/d) in July.
According to the U.S. Energy Information Administration (EIA), U.S. exporters are already facing headwinds from a seasonal decline in LNG demand in major consuming markets (Europe and Asia).
But the outlook has been worsened by lower global LNG demand due to the Covid-19 pandemic and historically low global LNG spot prices, which make U.S. LNG exports less economically viable.
The federal agency said on Thursday that the 20 reportedly cancelled U.S. cargoes for June delivery would reduce exports by an estimated 2.3 Bcf/d next month. If the 45 other cancellations materialize in July, the loss could be of more than 5 Bcf/d, Kallanish Energy reports.
It also estimates that May exports have declined month-on-month, with the Sabine Pass, Corpus Christi and Cameron terminals having the largest reductions in vessels loadings this month.
Between May 1 through May 24, some 40 cargoes were loaded – which amounted to an estimated 5.8 Bcf/d of LNG exports in May. That’s a 17.14% reduction compared to 7 Bcf/d exported over the same period in April.
The EIA also noted that natural gas deliveries to U.S. LNG exporting facilities fell to the lowest level since Oct. 2019 this month. On May 24, LNG feedgas dropped to 5.6 Bcf/d.
From May 1 through May 26, LNG feedgas averaged 6.7 Bcf/d, according to data by IHS Markit. The seven-month low happened despite 2 Bcf/d of new baseload liquefaction capacity, commissioned over the period.
This post appeared first on Kallanish Energy News.