US Exports to Europe up Tenfold

Exports of US LNG to Europe have gone up sharply since October 2018, averaging 1.9bn ft³/day in the winter of 2018–19 compared with 0.1bn ft³/d in the winter of 2017–18, the US Energy Information Administration (EIA) said in its weekly report June 6.

That was mainly due to "tepid" demand in Asia because of the warm winter and additional LNG supply that came online in the fourth quarter of 2018, increasing available global spot LNG supply, the EIA said.

Narrowing price differences between the UK National Balancing Point (NBP) and the equivalent spot price in Japan affected the flow of flexible exports from the US. Transportation costs from the US Gulf Coast to Europe are about $1.50/mn Btu less than those to Asian markets (for a round trip) and the price difference between Japan spot LNG and NBP prices was less than $1.00/mn Btu in December and January 2019. They reached a low of $0.60/mn Btu in April, so exports to Europe rose.

In March and April US LNG exports to Europe averaged 1.7bn ft³/d, ten times higher than in the same months of last year, and accounted for more than one-third of all US LNG exports in those months. Most were sent from Cheniere Energy's Sabine Pass terminal in Louisiana.

Europe’s LNG imports in the winter months of 2018–19 averaged 10.2bn ft³/d, 60% higher than in the previous two winters and the highest winter average since at least 2013, according to data from French consultancy Cedigaz. Russia, Nigeria and the US were the three largest suppliers to Europe from January through April 2019 (based on a four-month average).

LNG imports in the three largest global LNG markets – Japan, China, and South Korea – remained high from November 2018 through January 2019, but started to decrease in February 2019 and remained low in subsequent months, consistent with seasonal consumption patterns.

China continued to increase LNG imports in the winter, averaging 9.1bn ft³/d from December to late February, up by a fifth on the previous winter. During the same period, LNG imports in Japan and South Korea declined by 10% and 5%, respectively, in part because of milder winter weather and nuclear restarts in Japan.