HOUSTON, April 2 (Reuters) - There was a significant
decline on Tuesday in the amount of U.S. natural gas being
liquefied for export with a drop in demand from Cheniere
Energy's Corpus Christi plant in Texas and its Sabine
Pass operation in Louisiana, according to data from financial
firm LSEG.
Cheniere is the largest U.S. producer and the world's second
largest exporter of liquefied natural gas (LNG) as well as the
largest buyer of U.S. natural gas.
At Cheniere's Corpus Christi facility, gas demand on Tuesday
was down by close to one billion cubic feet, to 3.95 bcf from
its regular 5 bcf, and was down to 1.6 bcf at its Sabine Pass
plant, from the usual 2.2 bcf.
Cheniere declined to comment.
The fall in demand follows flat U.S. LNG exports in March
due to ongoing repair work at the country's second largest LNG
facility, Freeport LNG.
Unless there is an emergency or planned maintenance, there
is an incentive for all U.S. LNG producers to maximize output
because the difference in price between the U.S. Henry Hub
exchange price and the Dutch TTF and the Japanese-Korean JKM
benchmark prices make it lucrative to export as much U.S. LNG as
possible, said Ira Joseph, a Senior Research Scholar at Columbia
University's Center for Energy Policy.
"From a pricing perspective, TTF and JKM are well above
$8 per million British thermal unit (mmBtu) and Henry Hub is
still below $2, so even though I haven't had a good looked at
the forward curve, I assume it is still in favor of maximizing
exports," Joseph told Reuters.
He expects that Europe will remain the main market for
U.S. gas even as some of the gas may have to go into storage
because of declining demand at the end of the Northern
Hemisphere winter.
Analysts do not expect U.S. LNG feedgas to return to record
levels until liquefaction trains undergoing maintenance at
Freeport LNG's export plant in Texas return to service.
On a daily basis, LNG feedgas fell to a 10-week low of 11.3
bcfd on Tuesday.
Gas flows to the seven big U.S. LNG export plants fell to an
average of 11.9 bcfd so far in April, down from 13.1 bcfd in
March. That compares with a monthly record of 14.7 bcfd in
December.