Nuts Question – Understanding the Erratic Dating Anywhere between LNG and you may Internationally Energy Avenues

It’s been an incredibly wild year for U.S. LNG exports. In the past year, global gas prices have seen both historic lows and highs, as markets swung from extreme demand destruction from COVID-19 for much of last year, to supply shortages by late 2020 and into early 2021 due to maintenance outages, weather events, Panama Canal delays, and vessel shortages. The U.S. natural gas market has also dealt with its share of anomalies, from a historic hurricane season in 2020 to the extreme cold weather event last month that briefly triggered a severe gas shortage in the U.S. Midcontinent and Texas and left millions of people without power for more than a week. Given these events, U.S. LNG feedgas demand and export trends have run the gamut, from experiencing massive cargo cancellations and low utilization rates to recording new highs. Throughout this incredibly tumultuous year, U.S. LNG operators have had to adjust, managing the good times and bad and proving operational flexibility in ways that will serve them for years to come. Here at RBN we track and report on all things LNG in our LNG Voyager report, and we’ve been hard at work enhancing and expanding our coverage to capture the rapidly evolving global and domestic factors affecting the U.S. LNG export market, including terminal operations, marginal costs and export economics, and international supply-demand fundamentals. S. LNG has changed in the past year and trends to watch this spring. Warning! Today’s blog is a blatant advertorial for our revamped LNG Voyager Statement.

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To fully master how much cash brand new You.S. LNG export markets changed in past times season, we have to go back in the one year in order to , through to the pandemic consequences got set in. It may be difficult to consider those people pre-COVID days now, so help us place the brand new phase. The newest U.S. got merely finished including twenty five MMtpa (step 3.34 Bcf/d) out of liquefaction and you will export skill during the period of 2019 and very early 2020. Feedgas deliveries and you can LNG exports during this period were predictable to possess by far the most region, ramping up due to the fact liquefaction trains have been done and then continuously performing near full utilization of capability because devices was in fact put online and commercial deals banged in. Very, when you look at the March off this past year, feedgas request is actually near just what were upcoming list levels, with little sign of volatility away from regimen fix incidents. They seemed like most of the LNG you will would are grow – that has been a narrative LNG designers had been willing to provide.

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Then COVID-19 hit, decimating global demand, sending global gas prices to all-time lows and turning the economics for exporting U.S. LNG upside down for the first time since early 2016 when the first train at Cheniere Energy’s Sabine Pass terminal began exporting. We discussed the unraveling of the U.S. LNG export market that followed in a number of blogs last spring and summer, including Split They in my opinion Gently, Undone and LNG Disruption. The upshot is that offtakers of U.S. LNG began cancelling cargoes and, by summer, feedgas demand plummeted (dashed blue oval in Figure 1). Feedgas deliveries in July and August averaged just 3.66 Bcf/d, or about 40% of where they were in the first quarter of 2020 and just 42% of capacity at the time. Cancellations lessened by late summer as pandemic lockdowns eased, first in Asia and later Europe, and global prices improved. But just as U.S. LNG exports were poised to begin a recovery, a record-setting hurricane season wreaked havoc on the operations of Gulf Coast LNG terminals, particularly in Louisiana (see Your Spin Myself Bullet). Throughout the fall, nearly every U.S. LNG terminal faced some kind of outage, port closure, or shut-in for maintenance.