Record U.S. LNG output jump lifts exports in weak market

LONDON/NEW YORK (Reuters) – A sharp increase in U.S. liquefied natural gas (LNG) output in the past year has protected the country’s status as the world’s third largest exporter of the chilled fuel, despite multiple cargo cancellations this summer. Over 21 million tonnes per year of U.S. LNG capacity was added in 2019 and more than 16 million tonnes in 2020, contributing heavily to a global gas glut. As the coronavirus pandemic pressured demand and prices, flexibility built into U.S. LNG contracts allowed buyers to cancel multiple cargoes. However, although exports have been dropping throughout 2020 and individual projects have been impacted by rejections, U.S. exports and deliveries to Asia and Europe remain much higher than a year ago. Analysts said massive production capacity supported U.S. LNG, with strong exports achievable when the price differential between the U.S. and other markets is wide enough. “What we saw in the first half of the year…was primarily the result of newly expanded terminal capacity and low prices, wherein a spread still existed to Europe and Asia from the Gulf (of Mexico),” said Jack Weixel, Senior Director for gas, power and energy futures at IHS Markit. The U.S. exported 26.5 million tonnes of… continue reading

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