U.S. exports of liquefied natural gas rose to an all-time high in March as plants ran above nameplate capacity and new units started up, preliminary data from financial firm LSEG showed. Shipments to Asia more than doubled from the previous month amid the ongoing conflict in the Middle East that has roiled energy markets and taken nearly 20% of global LNG supply offline, forcing customers who depended on cargoes that transited the Strait of Hormuz to try and find alternatives. Exports in March climbed to 11.7 million metric tons, up from 9.94 million tons in February, and surpassed the previous monthly record of 11.5 million tons in December, the data showed. QatarEnergy halted LNG production after an Iranian strike damaged its facilities last month. The company has said the outage could remove more than 12 million metric tons per annum of supply for up to five years.
U.S. IS THE WORLD’S LARGEST LNG EXPORTER
The U.S. is the world’s largest LNG exporter, and its commercial model relies on destination-flexible cargoes that buyers – many with long-term contracts and locked-in supply – can redirect to any market. Most producers, however, don’t have much spare capacity to work with.
“We are trying to do whatever we can do. We’re looking at our maintenance schedules really hard, but at the end of the day, we have to be safe and we have to be reliable. We don’t want to sacrifice anything to get that last drop out,” Jack Fusco, CEO of top U.S. exporter Cheniere Energy, said last month.
Some new U.S. production capacity, however, did begin ramping up, with QatarEnergy and Exxon Mobil’s Golden Pass LNG project starting output from its first train, which has capacity of 6 million tons per annum, and Cheniere commencing production from the 1.5 mtpa Train 5 of its Corpus Christi Midscale expansion. Those additions mean March’s record could be surpassed again soon.
EUROPE REMAINS THE LARGEST BUYER
Higher prices in Asia helped pull more U.S. LNG into the region. Asian spot LNG averaged $21.65 per million British thermal units in March, compared with $16.17 per mmBtu for Dutch benchmark TTF. U.S. shipments to Asia rose to 1.99 million tons in March, more than double the 970,000 tons sent in February, LSEG ship-tracking data showed. Europe remained the largest buyer of U.S. LNG last month, taking 7.49 million tons, or about 64% of total March exports. That was slightly below the 7.66 million tons shipped in February.
More than 1 million tons of U.S. LNG that departed in March is currently signaling for orders or idling near the entrance to the Suez Canal, LSEG data showed. Eleven vessels carrying 880,000 tons are at sea awaiting a destination, while four carriers with a combined 280,000 tons are anchored at the canal’s entrance.
Egypt continued to buy significant volumes, receiving 620,000 tons in March. South Africa and Jordan each took one cargo, the data showed. Shipments to Latin America declined to 430,000 tons in March from 520,000 tons in February.
(Reporting by Curtis Williams in Houston; Editing by Nathan Crooks and Andrea Ricci )