The quantity of gas flowing to an LNG (liquefied natural gas) installation, which the installation then transforms into liquid, is called feed gas. Yesterday, December 21, the six major operating US liquefaction facilities were operating at full capacity and using 13 billion cubic feet per day (Bcf / d) of natural gas, furiously converting it into liquid natgas for exports. A significant amount of this gas comes from Marcellus / Utica.

Global S&P Platts Analytic tracks daily feed gas flows and reports on yesterday’s historic milestone.

STRONG POINTS

• 13 Bcf / d of feed gas demand observed on December 21
• Atlantic inundated with LNG carriers heading east

US LNG feed gas demand reached around 13 Gcf / d on December 21 – a new record – as the six major US liquefaction facilities in operation appeared to be operating at full capacity and a seventh was being commissioned, data from S&P Global Platts Analytics showed.

Ultra-high delivery prices in end-user markets were driving strong export activity to the United States.

The trends are expected to continue in the near term, with cold weather in northwestern Europe increasing demand for LNG there and even freezing temperatures in Russia limiting gas volumes by pipeline to the mainland as Russia keeps more of its supply for home use.

Gas deliveries to U.S. LNG export terminals increased by about 140 million cubic feet per day from the previous day, based on morning cycle nominations observed by Platts Analytics. About 58% of the total – 7.56 Bcf / d – was represented by the nine liquefaction trains passing through Cheniere Energy’s two terminals, Sabine Pass Liquefaction in Louisiana and Corpus Christi Liquefaction in Texas.

Small deliveries of feed gas to Venture Global LNG’s Calcasieu Pass continued to register on Dec. 21 as commissioning to start-up was underway, data from Platts Analytics showed. According to Venture Global, the 18 liquefaction modules were received at the Louisiana terminal from Italy and laid on a foundation.

The export value of LNG cargoes loaded on the US Gulf Coast 30-60 days jumped over $ 16 / MMBtu to new highs during the week of December 14-21, reflecting price strength European delivered. The Gulf Coast marker valued by Platts for February was $ 54.95 / MMBtu on December 21. This was more than six times more than the same day in 2020.

Dozens of LNG carriers were in the Atlantic trying to land in Europe to take advantage of the arbitrage, as the prices delivered there were valued at an enlargement premium over the spot price in Asia. *

Looking at the graph above, all gas flowing to the Cove Point and Elba Island export facilities comes from Marcellus / Utica. A significant amount of gas is also routed to the Gulf Coast and the Sabine Pass facility. We believe that MU gas flows to some extent to all listed facilities, but Cove Point, Elba Island and Sabine Pass represent the largest customers of MU gas used for LNG exports.

* Global S&P Platts (December 21, 2021) – US LNG production appears to be at full capacity as European prices continue to climb