ARKANSAS, Sept 27 (Future Headlines)- Cheniere Energy, the largest liquefied natural gas (LNG) producer in the United States, has recently made a significant reduction in its combined feed gas intake at two of its major facilities, impacting the overall U.S. feed gas consumption. This move comes amidst various factors affecting the LNG market, including maintenance shutdowns and global LNG pricing dynamics.
According to data from LSEG, Cheniere Energy has reduced its combined feed gas intake by approximately 1 billion cubic feet per day (bcfd) at its Sabine Pass plant in Louisiana and Corpus Christi facility in Texas. This substantial reduction in gas usage has had a notable impact on the overall U.S. feed gas consumption, which has reached a four-week low of 11.2 bcfd. While the exact reasons for this reduction have not been disclosed by Cheniere, it is indicative of the dynamic nature of the LNG market.
As of June 30, the United States regained its status as the largest LNG exporter globally, surpassing countries like Australia and Qatar. This achievement highlights the significance of the U.S. LNG industry in meeting international energy demands. However, the recent reduction in feed gas intake at Cheniere’s facilities raises questions about the short-term prospects of U.S. LNG exports.
Specifically, gas intake at the Sabine Pass plant decreased by over 350 million cubic feet per day (mcfd) to 3.9 bcfd, down from 4.2 bcfd the previous day. Meanwhile, at the Corpus Christi facility, gas intake experienced a more substantial decline of 600 mcfd, dropping to 1.64 bcfd from 2.25 bcfd. These reductions in gas intake are significant and may have implications for the overall volume of LNG exports from the United States.
Despite the recent reduction in feed gas intake at Cheniere’s facilities, the overall trends in U.S. LNG exports have shown resilience. Gas flows to the seven major U.S. LNG export plants have averaged 12.6 bcfd in September, up from 12.3 bcfd in August. However, it’s important to note that this still falls short of the monthly record of 14 bcfd recorded in April, according to LSEG data. The dynamics of the LNG market are influenced by various factors, including seasonal demand, global energy prices, and maintenance schedules. Understanding these fluctuations is essential for stakeholders in the LNG industry, from producers to consumers.
Global LNG pricing plays a critical role in shaping the decisions of LNG producers and consumers. As of the time of this report, gas prices were trading around $13 per million British thermal units (mmBtu) at the Dutch Title Transfer Facility (TTF) benchmark in Europe and $15 per mmBTU at the Japan-Korea Marker (JKM) in Asia. These pricing levels reflect the ongoing dynamics in the LNG market, influenced by factors such as supply and demand imbalances, geopolitical events, and seasonal variations. The pricing of LNG can significantly impact the economic viability of LNG projects and the competitiveness of LNG exports in the global market. Therefore, monitoring global LNG pricing trends is crucial for energy companies and governments involved in LNG trade.
Writing by Moe Khaled; Editing by Sarah White