Page 14 - GLNG Week 29 2020

GLNG AMERICAS GLNG

Pace of US LNG cargo cancellations slows

PERFORMANCE LNG buyers are continuing to cancel cargoes cancellations at up to 25-26 and some suggested
of the super-chilled fuel that are scheduled that it could be more than 26. However, even the
for loading from the US, but the pace of these upper end of these estimates is lower than the
cancellations is reported to be slowing. This 40-45 cargoes thought to be cancelled for loading
comes as demand remains depressed as a in each of July and August.
result of the coronavirus (COVID-19) pan- Two of the sources attributed the September
demic, while the market also struggles with cancellations primarily to low prices in Europe,
oversupply. where storage tanks are full after the region
The nature of US contracts means that it is became a leading destination for excess gas
generally cheaper for buyers to cancel a cargo on the market earlier this year. But the sources
from the US, while still paying a tolling fee to the added that fewer cargoes might be cancelled in
LNG producer. And while LNG exporters and September because traders could be betting on
their customers do not typically publicise their prices rising by November and December, with
commercial arrangements as far as individual some tankers already holding cargoes at sea for
cargoes go, media regularly report estimates sale later in the year.
from their market sources. In line with this, Reu- Such sales would be expected to target Asia.
ters reported three different estimates for cancel- The sources warned, however, that it was not yet
lations of cargoes scheduled for September from clear that Asian demand would rise significantly
eight industry sources on July 21. this winter. Cold weather normally pushes up
The news service said one source estimated demand, but there are concerns that next win-
15-20 cargoes for September had been can- ter could be milder than usual again, and the
celled, while another agreed it was less than 20. impact of coronavirus (COVID-19) in the com-
Two of Reuters’ sources estimated the number of ing months remains uncertain.™

Kinder Morgan ready to start

up seventh Elba Island train

PROJECTS & US infrastructure operator Kinder Morgan
COMPANIES has requested regulatory permission to put the
seventh liquefaction train into service at the
Elba Island LNG export terminal in Georgia.
According to the company’s July 13 regulatory
filing with the US Federal Energy Regulatory
Commission (FERC), Train 8 was ready to enter
service the same day the request was made.
The company noted that the trains at Elba
Island had not all been brought into service in
sequential order, and that Train 7 was still in the the end of the summer, according to comments
commissioning process. made to Reuters last week.
The Elba Island facility, which is being devel- Although the start-up of the remaining Elba
oped at a cost of roughly $2bn, is the smallest of Island trains is adding more capacity – however
the US’ new crop of LNG export terminals, with little – to an oversupplied market at a period of
a total capacity of 3mn tonnes per year (tpy). It low demand, no cargoes have been exported
is comprised of 10 modular trains, each with a from the facility since January.
capacity of 300,000 tpy. For comparison, trains Royal Dutch Shell is the sole offtaker from
at several of the other LNG terminals that have the terminal under a 20-year contract. Kinder
started up in the US since 2016 each have a Morgan owns a 51% in the facility, with EIG
capacity of 5mn tpy. Global Energy Partners holding the remaining
Kinder Morgan brought the first train at Elba 49% stake.
Island online in October 2019 after a number of Total US LNG export capacity is expected
delays during the commissioning process. Prior to rise from 9.7bn cubic feet (274.7mn cubic
to Train 8 becoming ready to enter service, Train metres) per day currently to 9.8 bcf (277.5 mcm)
6 was started up in April. The company antici- per day by the end of 2020 and 10.5 bcf (297.4
pates bringing the remaining units online before mcm) per day by the end of 2021.™

P14 www. NEWSBASE .com Week 29 24•July•2020