US LNG WEEKLY: Commercial momentum continues for new liquefaction projects

US LNG export terminal developers continued to gain momentum for new projects during the week ended May 17.

FOB Gulf Coast cargo values gained week-on-week, after six straight weeks of declines.

Utilization at major liquefaction terminals was down week-on-week amid ongoing shoulder-season maintenance, though it still remained robust as demand for US supplies in Europe continued amid Russia's ongoing war in Ukraine.

Malaysia's Petronas over the week reached a firm deal to buy 1 million mt/year of supply for 20 years from Venture Global LNG's proposed Plaquemines LNG export facility in Louisiana, while Poland's state-controlled PGNiG entered into a preliminary agreement with Sempra for the future supply of 3 million mt/year of US LNG. On May 10, it was announced that ExxonMobil had agreed to long-term deals to buy 2 million mt/year of LNG from Venture Global liquefaction projects in the US.

The deals were the latest in a flurry of commercial activity during the first several months of 2022 tied to current and proposed US LNG export terminals, which offer long-term contracts with fixed fees and destination flexibility. Persistently high spot prices in end-user markets have been a primary driver of the dealmaking.

S&P Global Commodity Insights assessed the Platts Gulf Coast Marker for US FOB cargoes loading 30 to 60 days forward at $21.250/MMBtu on May 17, $1.000/MMBtu higher week on week. The best netback remained Europe, driven by the market fundamentals there and lackluster demand in Asia.

Feedgas demand at US LNG export terminals dropped to around 12 Bcf/d in the week of May 10-17 from around 12.2 Bcf/d the week before. That was mainly due to maintenance at Sempra's Cameron LNG in Louisiana.

In tender news, Argentina's IEASA was heard to have issued a 13-cargo buy tender for July, nine cargoes into Escobar and four cargoes into Bahia Blanca. The tender was to close May 23, with the pricing basis either fixed, US Henry Hub or Brent, according to market sources. Traders said the results could help drive the direction of delivered LNG prices in the Atlantic.

The maximum waiting time on May 17 for unreserved LNG tankers transiting the Panama Canal stood at 14 days northbound and six days southbound, according to the Panama Canal Authority.