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US natural gas demand for LNG falls as Cheniere reduces output
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US natural gas demand for LNG falls as Cheniere reduces output
Apr 2, 2024 3:02 PM

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.

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