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US LNG WEEKLY: FOB cargo values rise as newest terminal


Highlights

Platts Gulf Coast Marker at $23.10/MMBtu on Feb. 8

Caclasieu Pass shipment expected around Feb. 11

US FOB Gulf Coast LNG cargo values edged up during the week ended Feb. 8 as the country’s latest major liquefaction facility to start up prepared to export its first shipment.

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Total feedgas demand remained strong, supported by increased nominations to Venture Global LNG’s Calcasieu Pass in Louisiana.

S&P Global Platts assessed the Gulf Coast Marker for cargoes loading 30 to 60 forward at $23.10/MMBtu on Feb. 8, up 45 cents/MMBtu week on week, flipping to Asia as the best netback after more than a month of Europe being favored.

Average daily feedgas nominations to the seven major US LNG export facilities continued above the 12 Bcf/d level during the latest week, S&P Global Platts Analytics data showed. The total was bolstered by strong feedgas demand at Calcasieu Pass, which, according to a Feb. 3 regulatory filing, began production on Jan. 19. On Feb. 8, feedgas deliveries to Calcasieu Pass registered almost 218 MMcf/d, down slightly from the day before but more that double the average during the previous week, based on nominations for the morning cycle.

While Cheniere Energy’s Sabine Pass export facility in Louisiana increased feedgas nominations by 1% week over week, Freeport LNG in Texas saw an average daily decline of 6% week over week. Average daily feedgas demand at the other four facilities was around the same during the latest week, Platts Analytics data showed.

An unladen Greek tanker arrived at Calcasieu Pass Feb. 7 and remained there Feb. 8. A dispatcher for Lake Charles Pilots, which navigates vessels along the intracoastal waterway that feeds the terminal, told Platts that the 174,093 cu m Maran Gas-owned Yiannis was tentatively expected to depart Feb. 11.

The timing of loading was dependent on pending approval from US regulators. The operator recently asked the US Federal Energy Regulatory Commission for permission to load its first export commissioning cargo on or after Feb. 9.

At Calcasieu Pass, Venture Global currently has approval to flow LNG feedgas to four of the 18 liquefaction trains for commissioning purposes. The operator has declined to say whether it would cool down its two storage tanks before exporting its first cargo, and if so whether it would bring in an import cargo to do so.

Besides Calcasieu Pass, Sabine Pass and Freeport LNG, the other major US liquefaction facilities in operation are Cove Point Liquefaction in Maryland, now operated by Berkshire Hathaway; Cheniere’s Corpus Christi Liquefaction in Texas; Sempra Energy’s Cameron LNG in Louisiana; and Kinder Morgan’s Elba Liquefaction in Georgia.

With US FOB cargo values high — thanks in part to strong end-user prices, relatively low shipping rates and modest congestion at the Panama Canal — export activity was expected to continue to be robust for the balance of 2022. For the full year, the US was expected to be the world’s biggest LNG exporting country.

In April, Tellurian plans to begin construction in earnest on its Driftwood LNG project in Louisiana, even if financing needed to complete the first phase of the terminal is not in place by then.

During a weekly podcast posted on the company’s website Feb. 8, Executive Chairman Charif Souki said Tellurian is eager to keep to its startup schedule around the middle of the decade, in part to take advantage of global LNG market fundamentals that are expected to remain favorable.

Banks have a “very large incentive to make these investments,” Souki said, adding, “Energy is one of the strongest sectors.”

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