The US' liquefied natural gas (LNG) exports are estimated to remain at low levels in the summer of 2020 due to competing low prices in global markets, the country's Energy Information Administration (EIA) said in a statement on Tuesday.
LNG exports of the US hit a record high level of 8 billion cubic feet (226.56 million cubic meters) per day in July 2020, the EIA said, adding 'July exports were similar to LNG exports in May 2018, when the available liquefaction capacity was about one-third of the current capacity.'
However, decline in global natural gas demand in response to the novel coronavirus (COVID-19), coupled with rising natural gas storage inventories in Europe and Asia and increasing global LNG liquefaction capacity, have caused global gas and LNG prices reaching all-time low levels this year.
'Because most US LNG exports are traded in the global spot market, low global spot and forward prices for natural gas and LNG made exports from the US uneconomical,' the EIA said in a statement.
'Based on the number of cargoes loaded in June and July and the available liquefaction capacity in operation, EIA estimates that about 46 cargoes were canceled in June and about 50 cargoes were canceled in July 2020,' it added.
The EIA stressed that most affected LNG terminals in the US were Sabine Pass in the state of Louisiana and Corpus Christi and Freeport in the state of Texas. In those terminals, utilization of liquefaction capacity in July averaged 33%, 28%, and 6%, respectively, it added.
The administration said it forecasts utilization at US LNG liquefaction facilities will average 35% during 2020 summer season.
By Ovunc Kutlu