U.S. liquefied natural gas (LNG) exports again increased last week as terminals along the Gulf Coast have continued to ramp up.
Seventeen LNG vessels, including eight from Sabine Pass, two each from Corpus Christi, Cove Point, Cameron and Freeport, and one from Elba Island, departed with a combined carrying capacity of 59 Bcf during the week ending Dec. 18. That’s up from 14 ships and 51 Bcf in the prior week, according to the Energy Information Administration. The volumes also included the first cargo shipped from Kinder Morgan Inc.’s Elba Island facility.
Exports are poised to continue growing. Sempra Energy said Monday that the second train at Cameron LNG in Hackberry, LA, has started producing the super-chilled fuel. Train 2 and Train 3 are expected to start commercial operations in 1Q2020 and 3Q2020, respectively. The facility’s first liquefaction train started operations last August. The three trains make up Phase 1 of Cameron, while Phase 2 could include up to two more trains.
Sempra’s announcement came days after Freeport LNG exported the first cargo from its second train. Train 3 is also currently under construction at the facility located on Quintana Island on the Texas coast and is slated to come online in 1Q2020.
The flurry of activity at the terminals has helped push feed gas deliveries to record volumes this month. Pipeline volumes flowing to the facilities peaked at 8.59 Bcf/d on Friday, according to NGI’s U.S. LNG Export Tracker.
That has some domestic consumers on edge. The Industrial Energy Consumers of America filed comments on Friday opposing four LNG export applications under review at the U.S. Department of Energy. The manufacturing trade group said the export terminals are decreasing pipeline capacity available to U.S. consumers at a time when midstream expansions are slowing. The group also noted that feed gas deliveries are expected to reach 10 Bcf/d in the coming months.
Developments in overseas markets also gave pause. President Trump signed a bill on Friday that included sanctions aimed at hindering Nord Stream 2, the 1.9 Tcf per year natural gas pipeline being developed by Russia’s Gazprom to move more natural gas into Germany. The sanctions, which were decried by the European Union (EU), target companies involved with construction of the system.
The U.S. has pursued policies to reduce Europe’s dependence on Russian natural gas, promoting the availability of U.S. LNG for the continent. Gazprom supplies more than a quarter of the EU’s natural gas.
Russia made more headway a day after Trump signed the sanctions by reaching a preliminary deal with Ukraine that would allow it to continue moving gas through the country to Europe.
The global market for LNG remained bearish as the year draws to a close. Spot buying in Northeast Asia has slowed, while European storage is brimming. European LNG Inventories were at about 60% over the weekend, above the 5-year average of 54%.
Norwegian ship broker Fearnleys AS pointed to a combination of factors that disrupted trade flows during the week ending Dec. 18, including a high number of laden cargoes, a bearish sign of loaded ships floating across the world.
“The additional time on water for laden cargoes and slower ballast passages raised concerns among charterers with tight schedules,” Fearnleys said, adding that the issues could persist in the near-term as U.S. exports increase.