A massive, deadly winter storm that has lashed the United States could disrupt global supplies from one of the biggest exporters of liquefied natural gas (LNG), tightening a market that has seen wild price swings this year.
An Arctic blast in the United States knocked out power to millions of homes and disrupted Christmas plans for millions more as thousands of flights were cancelled. Just before the Christmas weekend, nearly 250 million residents of the US and Canada were affected in one way or another by the storm, and at least 19 deaths were linked to the freezing and severe winter conditions.
Hard freeze warnings have been issued for all states along the US Gulf Coast – Texas, Louisiana, Alabama and Florida.
While Texas’ power grid managed to avoid catastrophic outages during the storm, shipping agencies are warning that there could be disruptions to navigation on waterways serving the largest LNG export terminal at Sabine Pass.
Freezing temperatures through Monday, Dec. 26, could delay or suspend pilot services for the Sabine-Neches Waterway serving Sabine Pass, according to a notice from Moran Shipping cited by Bloomberg. Moreover, pilots have suspended docking of ships at the Port of Corpus Christi, Texas due to extreme winter weather, according to Moran Shipping. As a result, vessel traffic to the Corpus Christi LNG export facility could be affected.
A winter storm in the US over Christmas could be the latest extreme event to affect the global LNG market this year.
Just last week, a fire at the floating LNG export facility Prelude offshore Australia forced operator Shell to halt production, just three months after Prelude resumed operations following months of FLNG industrial action.
Australia is also one of the world’s biggest LNG exporters, alongside the US and Qatar, but US LNG has helped Europe achieve comfortable gas supply levels ahead of this winter.
The United States has shipped record amounts of LNG to Europe to help EU allies, and about 70% of all US LNG exports have gone to Europe in recent months.
LNG prices rose to record highs earlier this year as Europe raced to stockpile the supercooled fuel ahead of this winter. The EU’s drive to wean itself off dependence on Russian gas and replace volumes Russia no longer supplies has made Europe the preferred destination for flexible-contract LNG cargoes, particularly those from the United States.
Between January and November, LNG imports into the EU and the UK combined jumped by 65% year-on-year, according to estimates from the Oxford Institute for Energy Studies (OIES). Imports from the United States alone increased by 176%, while imports from other sources increased by 27%. Over the same period, global LNG exports grew by just 5.5%, with almost half of the growth coming from the United States, OIES said.
Next year, Europe will need even more LNG supplies to make up for low (or possibly non-existent) pipeline flows from Russia, analysts and industry players say.
With a decline in gas deliveries from Russian pipelines, Europe will need “huge volumes” of LNG next year, commodities trader Trafigura said earlier this month, adding that it expected continued volatility in the natural gas and LNG markets.
“While Europe should avoid a blackout this winter by drawing on inventories and reducing demand, it will need to import huge amounts of LNG in 2023 given the huge reduction in flows from Russia,” Trafigura said in its annual report for the year to 30 September. .
Natural gas prices in Europe will need to remain elevated for the continent to continue to attract the majority of LNG cargoes in competition with other key demand centers, according to Trafigura. The commodities trader expects Europe to prioritize security of supply “until next winter and beyond”.
Author: Tsvetana Paraskova for Oilprice.com
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Does Russia import LNG?
Most of Russia’s LNG imports come from privately held Novatek, the country’s second-largest natural gas producer after Gazprom.
Does Russia import natural gas? This process especially accelerated in 2022. See the article : Post Seal Fallout: The Tenth Circuit orders the United States Trustee Program to reimburse Chapter 11 debtors for overpaid US trustee fees. In August 2022, Russia’s share of gas imports to the EU was 17.2%.
Where does Russia get its natural gas?
Russia is the second largest producer of natural gas in the world. It has the largest natural gas reserves in the world, most of which are located in Siberia.
How much LNG does Russia import EU?
| Characteristic | Volume of imports in millions of cubic meters |
|---|---|
| – | – |
Why is LNG prices rising?
This is due to growing demand, led by the world’s fastest growing LNG export market in the last two years. This may interest you : FACTSHEET: Vice President Harris launches new initiatives to strengthen US-Philippines alliance.
Why are LNG prices rising? The International Monetary Fund’s gas price index rose 72% in 2022, which also caused a sharp rise in the average price of India’s LNG imports. Global gas prices now depend critically on how quickly Europe’s demand for natural gas for its heating and other needs will be met.
Why are natural gas prices going so high?
Regulated utilities generally charge customers for the gas they use and then a fixed cost, the cost of building the pipeline to deliver the gas. This may interest you : Travel to the United States during Covid-19: Things you need to know before you leave. These costs are also rising, thanks to inflation, so housing prices are rising even faster than Henry Hub would suggest.
What affects LNG price?
LNG prices are determined by buyers and sellers, depending on where in the world the fuel is purchased. LNG prices are often linked to natural gas and oil benchmarks.
Who are the #2 liquified natural gas LNG operators?
Today, TotalEnergies is the world’s No. 2 in LNG, targeting sales of close to 50 million metric tons per year by 2025.
Who are the biggest producers of LNG? Here are three main options for investors to consider: Cheniere Energy: The leader in LNG production and export in the US Royal Dutch Shell: The world leader in LNG. Its integrated operations include gas supply, LNG export and import infrastructure and a leading marketing operation.
What are best LNG stocks to buy?
Long-term LNG transportation is estimated to cost an average of $95,917 per day in 2023, an average of $86,000 per day from 2019 to 2021. Some of the elite players in the LNG and LNG transportation market include Chevron Corporation (NYSE:CVX), Cheniere Energy, Inc. (NYSE:LNG) and Exxon Mobil Corporation (NYSE:XOM).
Who are the big players in LNG?
| Company (Country) | Export capacity in millions of metric tons per year |
|---|---|
| ExxonMobil (United States) | 21 |
| TotalEnergies (France) | 18.3 |
| Chevron (United States) | 17.8 |
| BP (UK) | 13.1 |
Who is the number one exporter of LNG?
The United States became the world’s largest LNG exporter in the first half of 2022. Note: June 2022 LNG exports are EIA estimates based on tanker delivery data. LNG export capacity is the estimated peak LNG production capacity of all operating US LNG export facilities.
