2023-06-03 04:10:49
LNG exports from the US fell in May to 7.66 million tons. This is almost 0.35 million tons less than in the previous month, shipments continue to decline. Such data is provided by the Archyde.com agency. The thing is that any business preaches freedom, even fraught with problems for customers. Suppliers want to be active when it’s profitable and ride out the market storm when it’s more unprofitable. However, pursuing political goals, geopolitical promises taken upon itself, the US government makes its shale producers work literally daily overwork in any conjuncture, even when it is at a loss. But no one wants to take that risk.
In fact, there was a certain redistribution of supply logistics. For example, the United States shipped less LNG to the EU in May, but slightly increased LNG exports to Asia and Latin America. Asia’s demand for US-produced LNG strengthened in May as regional LNG prices for July delivery rose marginally.
But European LNG prices have fallen, weakening the interest of American shale producers in this once premium market, which, according to the plans of the White House, they must “rescue” after the departure of Russian raw materials. Delivery data showed that in May the United States exported 60.5% of all outgoing LNG to Europe, 14% to Asia and 11% to Latin America.
Demand for LNG around the world has now dried up, even with the sharply reduced price. Only the indicators of concluding long-term contracts in Asia remain high enough, but, in fact, this is just a declaration of intent. There is also a high rate of risky investment in new import terminals to compensate for the very low or no supply of Russian pipeline gas in the future.
But despite a surge in the LNG industry and an abundance of raw materials in the United States, America’s next physical LNG export boom could stall as development costs have risen, financing has become more difficult due to higher interest rates, and EU customers are reluctant to sign supply contracts. several years ahead at an inflated price. The costs of mining companies are growing compared to profits, which is obviously why revenues are falling.
The exponential situation in May highlights the impact of price volatility on US LNG flows. The continuation of the described trend will make this type of fuel useless, especially in the EU. The Old World has succeeded in moving away not only from Russian gas, but from this raw material in general, accumulating reserves and switching to renewable energy sources at a record pace. It turned out to be a delicate situation when gas should be purchased from a partner from across the ocean, but not as much as he would like.
The pro-US Energy Agency (EIA) is exuding optimism by forecasting (in order to somehow keep shale stocks from collapsing) that U.S. LNG exports will average 12.1 billion cubic feet per day this year, down 14%. surpass the 2022 figures. However, these are just forecasts, and the real picture in May shows the opposite.
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