US LNG cargo cancellations slow for September

Sluggish global demand for liquefied natural gas continued to push US LNG buyers to cancel cargo loading for September, according to industry sources for Reuters. However, the pace of cancellation in September seems to have slowed down.

 

Some sources estimate that 15 to 26 LNG cargoes may have been cancelled, although the exact number of cancellations is not immediately clear. This compares to 40-45 cancellation for July and August. The number of cancellations for June loading ranged roughly from 20 to 30.

 

Cargo cancellations for September were mainly due to low prices in Europe, which has its storage capacity full, according to industry sources.

 

One reason for fewer cargo cancellations in September is that traders are betting that prices will rise in November and December, with some tankers already holding their cargoes at sea for sale later, probably in Asia, industry sources with Reuters said.

 

A source said that most of the cargoes for September loading were cancelled from Cheniere Energy’s plants (i.e. Sabine Pass in Louisiana and Corpus Christi in Texas), similar to the situation in previous months.

 

US LNG exports this year are estimated to plummet by more than 70%, from 8.07 bcfd in January to expected 2.2 bcfd in July and August, according to the US Energy Information Administration (EIA)’s latest Short-Term Energy Outlook.

 

However, EIA expects that US LNG exports will increase in each of the remaining months of the year and will recover to 6.5 bcfd in December.

 

Based on the number of cancelled cargoes for the coming months, EIA expects US LNG export capacity will be utilised at less than 50% in June, July, and August 2020.

 

Source: Oil & Gas Journal