A roundup of news and commentary from NGI’s LNG Insight
- Centrica plc has reviewed 20-year contract with Cheniere Energy Inc. to determine if it’s “onerous.” Contract has an intrinsic value that depends on the spread between the Gulf Coast and key markets overseas. Those have narrowed and value of contract is now “close to nil.” For now, Centrica is satisfied with contract, as slight increase in spreads would increase its value.
- McKinsey & Co.: LNG supply has grown 8% year to date, but June volumes down 6% year/year. Several suppliers saw decreases, but U.S. LNG biggest contributor to decline, reducing by 33%. Utilization levels were just above 45%, the lowest monthly export figure since February 2019.
- Shipbroker Fearnleys AS noted outlook improving: “Expectations of an improving LNG trading environment appear to be bearing fruit as early estimates suggest September U.S. Gulf cargo cancellations are down considerably. With players seeking winter coverage and the window for September spot chartering approaching, we could see sentiment firm up” in the Atlantic Basin.
- European natural gas prices still under pressure given healthy supplies. Meanwhile, North Asia prices steady at $2.40/MMBtu week/week, “as regional LNG inventory levels are reported close to capacity,” said Schneider Electric.
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