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US LNG March exports drop on maintenance

19 May 2017 20:12 (+01:00 GMT)
US LNG March exports drop on maintenance

Houston, 19 May (Argus) — The Sabine Pass LNG terminal in Louisiana exported 13 cargoes in March with combined capacity equivalent to 43.47 Bcf (1.23bn m³) of gas, according to data released this week by the US Department of Energy (DOE).

The volume was down by 16pc from the US monthly export record of 51.98 Bcf set in February, as the third liquefaction train at Sabine Pass underwent maintenance during part of March to prepare for long-term operations.

Sabine Pass is the only major operating LNG export terminal in the contiguous US. Five other facilities being built are scheduled to come on line from late this year through 2019.

Eight of the March cargoes were sold at fixed prices under long-term contracts, while the remaining five were sold under spot deals.

The volume-weighted average free-on-board (FOB) price of the spot cargoes was $4.73/mmBtu. Argus in February assessed the US Gulf coast March FOB price at an average of $6.10mmBtu.

Four of the spot cargoes were delivered by Sabine Pass owner Cheniere Energy, with two going to Mexico, one to South Korea and the other to Turkey. The fifth was delivered by France's Engie to The Dominican Republic.

The Dominican Republic receives most of its LNG from Trinidad and Tobago, but Engie in December signed a 12-year deal to deliver from its global portfolio 700,000 t/yr of LNG, equivalent to 34 Bcf of gas, to AES' Andres LNG import terminal in the Dominican Republic. US-based AES will use some of that supply to send LNG from Andres to smaller markets in the Caribbean, the first such hub-and-spoke initiative in the region.

Three of the March spot deliveries were commissioning cargoes from the third liquefaction train, which produced seven test cargoes in January-March before being placed into long-term service on 31 March.

Shell loaded five of the March long-term cargoes under a 20-year deal in which it paid Cheniere an FOB price of $5.27/mmBtu, comprising a $2.25/mmBtu liquefaction fee and a $3.02/mmBtu LNG fee. The latter fee was 115pc of the final Nymex Henry Hub March prompt-month settlement. Those volumes were sent to South Korea, Jordan, Pakistan, Thailand and Kuwait.

Shell paid Cheniere $6.02/mmBtu for a sixth long-term cargo it loaded in March, under a contract that has a $3/mmBtu liquefaction fee. That cargo was delivered to Chile.

Spain's Gas Natural loaded the two remaining March long-term cargoes at FOB prices of $5.51/mmBtu, corresponding to its liquefaction fee of $2.49/mmBtu and the 115pc Nymex LNG fee. It sent the cargoes to Jordan and Mexico.

American LNG Marketing in March exported to Barbados an equivalent of 20.4mn cf of gas, for a total of 57.2mn cf so far this year, after sending 99.6mn cf to Barbados last year.