Aurex Insight: US LNG Practice Market Review
US LNG Practice Market Review
Welcome to Aurex Group’s first quarterly update for the US LNG market in 2020. In this issue, we will be providing an overview of the major market movements, events and hiring trends as the industry responds to the effects of coronavirus. If you would like additional insight into the market and trends that are occurring, please reach out to our specialist team at email@example.com for a confidential discussion.
US LNG Export Projects Fully Approved by the DOE and FERC in QI 2020
Proposed Design Capacity (Bcf/d)
Jordan Cove LNG
coos Bay, OR
Gulf of Mexico
Coronavirus and Its Effects
It is no secret that demand is expected to slump through 2020, as the global economy is paused, and steps are taken to contain the virus. Despite this drop, producers continue to flood the market with excess cargoes due to their inability to reduce output quick enough to match the declining demand. According the EIA, an additional 29% increase in LNG exports is expected this year, on top of the 68% increase witnessed in 2019. This imbalance will likely lead to an increase in cargoes being canceled as gas prices decline.
Commenting on the trend, Goldman Sachs said U.S. LNG export cancellations were more likely to come from trading houses and portfolio players, rather than utilities, and would most likely occur at tolling facilities, plants owned by one company where others pay to produce LNG.
Disavio, S. (2020). U.S natgas shortage to his record coronavirus cuts demand, LNG exports. Reuters.
First US LNG Cargo Heads to China Since March 2019
For the first time since March 2019, a US LNG Cargo is en route from the Cameron LNG terminal in Lake Charles, LA to Tianjin, China. Should the delivery be completed, it is anticipated to reach China at the end of April. The shipment is significant as it marks the first IJS cargo to be delivered into China since the US-China trade war imposed 25% tariffs on all US LNG imports a year ago.
Owen, W. (2020) . First US LNG tanker heads to China since March 2019. LNG Industry.