U.S. liquefied natural gas (LNG) exports remained strong as the week got underway, with feed gas deliveries holding near record highs of about 10 Bcf/d.
The ongoing strength in domestic cargo departures helped push global exports to their highest level in six months through October, data intelligence firm Kpler said last week. Global exports stood at 307 million tons (Mt) year-to-date through October, up 5 Mt from the same period last year. The United States was key in driving last month’s strength as volumes leaving the country finished at 4.5 Mt, accounting for 85% of the gain off June/July weakness during a summer in which it was uneconomic to move cargoes overseas.
The rebound in buying as cooler temperatures set in across the Northern Hemisphere has meant an open arbitrage window between the east and west, “prompting several opportunistic traders to take on tonnage” for U.S. Gulf Coast loadings, said shipbroker Fearnleys AS. The Atlantic Basin’s shipping market has been so tight this month that vessels have had to be taken from the East, “which locked in full utilization at round-trip economics or more for these fixtures.”
While U.S. LNG exports dropped during the week ending Nov. 11, they still remained strong. Eighteen vessels departed the country with a combined carrying capacity of 65 Bcf, according to the Energy Information Administration. That compares to the 22 vessels carrying 82 Bcf in the prior week.
Overseas, natural gas prices have been steady this month, with the Dutch Title Transfer Facility (TTF) prompt contract trading under $5.00/MMBtu and the Japan Korea Marker front month slightly under $7.00.
TTF gained last week as coal prices rose and made gas more competitive for power generation, while demand remained strong in Asia. Asian markets were also stable after Petroliam Nasional Berhad, aka Petronas, said last week an outage at its Bintulu LNG plant in Malaysia, one of the largest in the world, was related to a minor issue and the plant would not be offline for a prolonged period.
European gas contracts continued to gain on Monday as global equity markets responded positively to the reported effectiveness of Moderna Inc.’s Covid-19 vaccine trial. Prompt gas contracts gave up their gains on Tuesday, however, as milder weather, stronger wind generation and a slide in Henry Hub prices on Monday signaled more LNG exports were likely to land on the continent, according to Schneider Electric analyst Balint Balazs.
Elsewhere in the United States last week, Exelon Corp.’s Everett LNG import terminal in Massachusetts took its first cargo of the winter season, according to Bloomberg ship tracking data. Everett has imported 23.7 Bcf this year, according to the U.S. Department of Energy, mostly during the winter months last year.
Along the Gulf Coast, Tellurian Inc. is reportedly in discussions with an array of Asian companies to sell nearly half of the output from its proposed Driftwood LNG export terminal in Louisiana. Petronet LNG Ltd.’s acting CEO Vinod Kumar Mishra indicated last week that the Indian company would not likely invest nor take supply from the still unsanctioned plant.
Meanwhile, in Australia, Woodside Petroleum Ltd. reached another step in advancing the Scarborough gas project offshore Western Australia. Authorities granted petroleum production licenses that include expanding the Pluto LNG export terminal and developing the Scarborough gas field. The field contains an estimated 11.1 Tcf. The company is expected to reach a final investment decision next year.
Abu Dhabi National Oil Co. (Adnoc) affiliate Adnoc LNG also inked supply deals with Vitol and Total SE. Adnock signed a six-year supply deal with Vitol for the sale of 1.8 million metric tons/year (mmty) starting after 2022. The company also agreed to provide to Total 0.75 mmty for 2021 and 2022.
Adnoc also said last week it has signed an agreement with Total to research and develop opportunities to cut emissions and capture carbon as more of the world’s leading natural gas players look to cut their environmental footprints in the face of increasing scrutiny.
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