Page 11 - NorthAmOil Week 31

NorthAmOil COMMENTARY NorthAmOil

US LNG exports still booming

despite cargo cancellations

Exports of LNG from the US have still risen year on year, despite a spate

of cargo cancellations over the summer as a result of global oversupply

GLOBAL MUCH has been made of the cancellations over shipments to Latin America in particular tak-
the summer of cargoes due to be loaded from US ing a hit over the summer – deliveries to Asia
WHAT: LNG export terminals. However, the latest data remained 67% higher than they were last year.
US LNG exports are up show that US LNG exports are still up compared Deliveries of US LNG to Europe, meanwhile,
compared with 2019 with 2019, with new liquefaction capacity addi- have shrunk just one cargo, according to Reuters.
despite recent cargo tions helping the country to remain one of the The news service added that total European
cancellations. dominant players on the global market even with LNG imports were lower in June and July, while
the cancellations factored in. Asian deliveries were stable, and that this sug-
WHY: Refinitiv Eikon data reported by Reuters gests the US has increased its market share.
Liquefaction capacity showed that the US exported 26.5mn tonnes More cancellations are due in August, but
additions have offset of LNG in January-July 2020, marking a 41% their pace is reported to be slowing, and there
the cancellations and increase year on year. And the news service also are expectations that US shipments will pick up
are helping the US to cited Rystad Energy’s vice-president of gas and further in September and October.
dominate LNG markets. power markets, Xi Nan, as saying he expects the Traders cited by Reuters expect winter car-
US to produce 55mn tonnes of LNG over the goes to go primarily to Asia as prices there rise.
WHAT NEXT: whole of 2020, which would equate to a 53% However, this depends on how temperatures
A report has expressed increase on 2019. behave over the coming winter, as well as on
scepticism over new While regional price differentials have nar- a limited impact from any new coronavirus
demand for US LNG from rowed recently, in the first half of 2020, prices (COVID-19) spikes.
Chinese buyers. in Europe and Asia made US LNG an eco-
nomically attractive option. This, coupled with Capacity surge
the new additions to US liquefaction capacity, Over 21mn tonnes per year (tpy) of US LNG
allowed the country to remain dominant in the capacity was added in 2019 and more than 16mn
global LNG market, retaining its status as the tonnes in 2020. New capacity is still starting up –
third-largest producer of the super-chilled fuel with more in the pipeline.
in the world. Earlier this month, Kinder Morgan requested
And even with US exports falling – and regulatory permission to bring the seventh

Week 31 06•August•2020 www. NEWSBASE .com P11