In April, the U.S. exported 94 LNG cargoes, the lowest level since November 2022. Freeport Trains 1 and 2 were offline all month for maintenance. Train 3 was operational at the beginning of the month but unexpectedly shut down on April 10 after an issue with a ventilation flow meter. The terminal took only negligible amounts of feedgas from April 11 to 20, before restarting on the 21st. However, Train 3 tripped offline again on April 24 because of an issue with the main cryogenic heat exchanger, according to filings with Texas state regulators. Train 3 restarted on April 28, and the full terminal is now in the process of restarting as the scheduled maintenance on Trains 1 and 2 comes to a close. The reduced operations at Freeport have been the main driver of the overall low level of U.S. LNG output this spring. The terminal only exported five cargoes last month, compared to the typical monthly total of 17-18 when the terminal is fully operational. Although Freeport is on its way back to being fully operational, U.S. LNG will remain below full capacity this month as Cameron LNG is now conducting terminal maintenance. Maintenance at Cameron began on May 2 and will likely run through around May 24.
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Freeport Feedgas Fluctuations Impact Gas Market
Better Days - U.S. LNG Feedgas Rebounds as Spring Maintenance Season Rolls Off
Global gas prices have had a record-breaking year so far, with JKM in Asia hitting all-time seasonal highs in spring, and TTF in Europe last week reaching the highest level since 2008. Prices have been spurred on by a global LNG market that is undersupplied and hunting for additional cargoes. If you were just looking at U.S. feedgas levels over the past several weeks, though, you would never know that we are in the middle of an incredible bull run. U.S. LNG feedgas deliveries have trailed below full-utilization levels for more than a month due to a combination of spring pipeline maintenance, LNG terminal maintenance, and operational issues. The reduced availability of pipeline and liquefaction capacity led feedgas deliveries in June to average 9.35 Bcf/d, or about 85% of full capacity. However, this was just a small and short-lived setback before what is likely to be a breakthrough summer for U.S. LNG. Feedgas demand is already back above 95% utilization and is poised to head even higher over the next few months both from new liquefaction capacity coming online and potentially from spot market cargo production. In today’s blog, we take a look at the impact of spring maintenance on U.S. LNG production and potential feedgas demand growth in the months ahead.
Dizzy - U.S. LNG Feedgas Volumes Swing Wildly Ahead of Peak Winter Demand
Total U.S. LNG export capacity is around 12 Bcf/d, including the still-commissioning-but-nearly-complete Calcasieu Pass. About 13.5 Bcf/d of U.S. natural gas supplies, or feedgas, is required to produce that much LNG, but feedgas demand has averaged just 10.5 Bcf/d over the past week despite still-soaring global gas prices and an undersupplied global LNG market. Two U.S. terminals are currently offline: Freeport LNG, which has been out of service since an explosion and fire in June, and now Cove Point LNG, which shut for annual maintenance October 1. Beyond those outages, which have taken about 2.75 Bcf/d of demand out of commission, LNG feedgas volumes have been extremely volatile, swinging as much as 2 Bcf/d within a week. Don’t expect this to last, however — with winter approaching, the return of both Freeport and Cove Point on the horizon, and the full startup of Calcasieu Pass in sight, feedgas demand will likely rise to new heights and soon consistently top 13 Bcf/d. In today’s RBN blog we take a closer look at the recent volatility in LNG feedgas and the potential demand coming this winter.
