- Energy firms look for a place to store the super-cooled fuel with prices higher in the U.S.
- Stockpiles are nearing full capacity in Europe.
- The United States is the world’s third-biggest LNG exporter.
- Combination of higher U.S. prices, coronavirus demand destruction, and record stockpiles in Europe.
- These combinations prompted buyers to cancel dozens of U.S. LNG export cargoes for delivery this summer.
According to an article published in Reuters and authored by Scott DiSavino, a ship carrying liquefied natural gas from Nigeria is expected to drop its cargo in Georgia.
Stockpiles nearing full capacity
As energy firms look for a place to store the super-cooled fuel with prices higher in the United States and stockpiles nearing full capacity in Europe.
The ship, Madrid Spirit, does not have a destination listed, according to data from Refinitiv, but is located a day or two away from Kinder Morgan Inc’s Elba Island LNG plant.
A unit of Royal Dutch Shell Plc chartered the ship, people familiar with the matter said.
Shell, which has a long-term contract to use Elba, declined to comment.
Less number of LNG imports
The United States, which is the world’s third-biggest LNG exporter behind Australia and Qatar, does not receive a lot of LNG imports, but they do occur.
There were 21 LNG deliveries to the United States last year, mostly from Trinidad, while the U.S. exported more than 500 cargoes.
Analysts said it makes sense for some energy firms to store LNG in the United States because U.S. gas prices have traded mostly higher than in Europe since late April.
COVID-19 and higher prices lead to LNG cancellations
The combination of higher U.S. prices, coronavirus demand destruction, and record stockpiles in Europe has already prompted buyers to cancel dozens of U.S. LNG export cargoes for delivery this summer.
So far in 2020, the United States received at least 10 LNG deliveries with seven going to Exelon Corp’s Everett terminal in Massachusetts and three, including one this week, to Dominion Energy Inc’s Cove Point in Maryland, according to federal and Refinitiv data.
Exelon said it does not import or store LNG at Everett for others since it mostly uses he terminal to fuel its Mystic gas-fired power plant.
At Cove Point, however, BP Plc, Equinor ASA, and Shell have storage rights for a 120-day period, according to Energy Aspects.
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Source: Reuters
