Significant U.S. LNG Cargo Cancellations Not Likely in 2021, BofA Analysts Say

Asian liquefied natural gas (LNG) spot prices are at two-year highs and are projected to remain strong enough next summer to prevent significant cancellations of U.S. LNG cargoes in 2021, BofA Global Research analysts said.

Projected U.S. LNG export arbitrages for next summer are now positive, in the range of $0.75-$1.00/MMBtu, the analysts said in a Dec. 11 note.

“Thus, we assume near max utilization rates of U.S. LNG export facilities next year and see Asian demand supporting Henry Hub prices above $3/MMBtu in the summer,” they said.

Combined gas intake at the six U.S. LNG export terminals has recently averaged more than 11 Bcf/d, according to NGI data.

An estimated 165-200 U.S. LNG cargoes were cancelled earlier this year as depressed demand from the Covid-19...