US LNG Exports Robust against Ongoing European Energy Crisis

SHANGHAI, Mar 17 - Demand for US liquefied natural gas (LNG) exports is strong and LNG export terminals are operating at almost full capacity amid the impact of the Russia-Ukraine conflict and as Europe struggles to rebuild its shrinking gas stocks.

Some 27 LNG vessels were on their way to or near LNG receiving terminals in the US Gulf Coast on Wednesday, close to the peak of 28 on February 28, according to Refinitiv Eikon.

Reid I'Anson, senior commodities analyst at Kpler, a consulting firm, said, "We're off the absolute highs, but still at relatively high levels. It's normal to see wave after wave of ships coming and going."

The number of vessels waiting at the Gulf Coast partly reflects the decline in LNG deliveries to Asia from the U.S. Edward Watson, LNG shipbroker at Clarksons Plc, said the shorter distance from the Gulf Coast to Europe meant the vessels could arrive at Europe via Atlantic, and return and reload more quickly.

LNG exports from US Gulf Coast are expected to reach 6.47 million mt this month, surpassing the record of 6.3 million mt set in January, Kpler said. Europe has been the largest importer of US LNG since last December and is expected to remain the largest importer in March, according to Refinitiv and Kpler.

In addition, the US Department of Energy said it has approved additional LNG exports from Cheniere Energy's (LNG.US) two terminals in Sabine Pass, Louisiana, and Corpus Christi, Texas. The permit allows Sabine Pass and Corpus Christi to export the equivalent of 720 million cubic feet per day of natural gas to any country (including all of Europe) that does not have a free trade agreement with the United States.

The US Department of Energy has also stated that each operating US LNG export project is approved to export its entire capacity to any country not prohibited by US law or policy.

Cheniere Energy is seen as a possible beneficiary of Europe's efforts to move away from its dependence on Russian gas, but some analysts believe that the company "could find itself squeezed by a lack of growth in upstream gas production in the US and pressure from environmentalists."