October 15, 2015 [OPIS] - Relatively plentiful ship-borne arrivals of liquefied natural gas (LNG) in August have ensured that total U.S. imports for calendar 2015 will surpass the anemic annual total posted last year.
Nonetheless, the latest numbers issued by the U.S. Department of Energy (DOE) Office of Fossil Energy underscore the magnitude of the collapse in a market that a decade ago was viewed as the torch-bearer of a modern-age energy revolution.
August vessel-borne imports of LNG into the U.S. totaled around 11.15 bcf, comprising 8.23 bcf sourced by GDF Suez Gas N.A. into the Everett terminal in Massachusetts and BG LNG Services’ 2.92 bcf arrival into the Elba Island, Georgia facility.
This pushed the January-August vessel-borne LNG import total for 2015 to 63.79 bcf, surpassing the 2014 full-year total of 59.28 bcf. The 2014 total was the lowest recorded since 1995, and a fraction of the annual totals of more than 500,000 bcf recorded every year from 2003-2007, culminating in the record 2007 figure of 770.81 bcf.
The August imports all were on long-term contracts, DOE said. The U.S. has not seen a spot LNG import cargo since April.
The activity in August made that month among the four most prolific in 2015. However, the landed price of August cargoes was $3.56 per million Btu or lower, compared with double-digit pricing seen earlier in the year.
Six of the 10 operating LNG terminals in the U.S. have remained completely idle through 2015. According to DOE, Trinidad with 56.4 bcf and Yemen with 7.4 bcf are the only two countries to have supplied the U.S. with vessel-borne LNG in 2015.
On the export front, August witnessed ConocoPhillips sending out 2.75 bcf of LNG from the Kenai terminal in Alaska, bringing the year-to-date export total to 11 bcf — all by ConocoPhillips from Alaska. No re-export has been logged in DOE annals since February.
As OPIS has reported, a movement is afoot in the U.S. to convert the nation’s LNG import capabilities into export capabilities. Cheniere is expected to start exporting LNG from its Sabine Pass facility in Louisiana during this quarter. A total of 38 LNG export facilities are in the proposed or putative stages in the U.S. and 20 more in Canada.
Some experts are skeptical whether all of these projects are required or will be built, especially in light of the decline in the oil price. Plentiful and competitively priced gas derived from the U.S. shale boom was once seen as a selling point, but this may no longer hold true in an environment where LNG supplies from other exporting regions start looking reasonably inexpensive to major gas-consuming countries, these experts warn.