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U.S. LNG Exports Decline for Fourth Straight Month

U.S. LNG Exports Decline for Fourth Straight Month

May 1, 2024

U.S. LNG Exports Decline for Fourth Straight Month

The United States has witnessed a consecutive four-month drop in exports of liquefied natural gas (LNG), with figures for April showing a decline to 6.19 million metric tons from 7.61 million in March. This reduction is primarily attributed to ongoing production outages, as per the preliminary data released by financial firm LSEG.

Freeport LNG, the nation's second-largest LNG plant by capacity, has faced a series of mechanical problems that have significantly impacted its output. In April, the Quintana, Texas facility managed to dispatch only five cargoes, summing up to 330,000 tons. This is a significant fall from the 21 cargoes totaling 1.42 million tons recorded in December.

Since the middle of January 2024, Freeport LNG has been operating with reduced efficiency, as at least one of its three gas-processing trains has been offline. Despite recent increases in feedgas consumption, as indicated by LSEG data, and a tanker mooring at its dock last Friday, the company has not commented on these production challenges.

Energy Aspects analyst David Seduski has expressed skepticism about Freeport's operational capacity, stating, "We still believe Freeport will not reach its typical summer utilization near 90% until June, at the earliest, given its previous struggles to complete maintenance in a timely manner."

Moreover, the U.S.'s largest LNG exporter, Cheniere Energy, also faced temporary reductions in gas consumption last month at its facilities in Corpus Christi, Texas, and Sabine Pass, Louisiana. The company has not provided a reason for these declines.

The distribution of U.S. LNG exports has shifted, with Europe's share decreasing to 52.5% of the total volume from about 57% in March. Conversely, Asia maintained a relatively steady proportion of the total volumes, receiving 32.6% of exports. Notably, one LNG cargo was shipped to Kuwait from Cameron LNG during this period.

Latin America saw a near doubling of its share of total U.S. LNG exports, with a rise to 850,000 tons, or 13.7% of the total, from 550,000 tons, or 7%, in March. Countries such as Jamaica, the Dominican Republic, Colombia, Brazil, and Argentina increased their purchases of the superchilled gas.

The current state of U.S. LNG exports reflects the challenges faced by major exporting facilities like Freeport LNG. The ongoing operational issues at these plants may have broader implications for global LNG markets, especially as countries continue to seek alternatives to Russian energy supplies.

Reuters Article

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