According to preliminary Refinitiv statistics, liquefied natural gas (LNG) exports from the United States increased over 16 percent last month to a new high, with shipments to Europe continuing to dominate.
As a result of Russia’s invasion of Ukraine, European countries are trying to reduce their gas imports from Russia while also trying to replenish depleted supplies.
According to Refinitiv, US LNG exports to all destinations were roughly 7.43 million tonnes (MT) last month, up from 6.4 MT in February and above the previous high of 7.25 MT in January.
For the fourth month in a row, Europe was the top consumer of US LNG, accounting for almost 65 percent of total exports. According to the figures, almost 12% of exports traveled to Asia and 3% to Latin America. About 20 vessels, accounting for 20% of the total volume, had not yet notified their destination.
“The United States continues to place a premium on European purchasers,” said Reid I’Anson, senior commodity analyst at Kpler.
MORE GAS IS REQUIRED
While LNG exports from the United States to Europe have increased dramatically since November, analysts say more is needed because European gas reserves are only around a quarter full, well below the five-year average of around 34% for this time of year.
The European Commission has advised that inventories be 80 percent full by November 1, implying that demand will remain robust after the winter heating season finishes.
Germany announced in February that it would construct two LNG import terminals and increase reserves to reduce its reliance on Russian gas.
“In order to manage risks, European countries should follow Germany’s lead and begin rationing gas usage and preparing for a possible supply drop,” said Vinicius Romano, an analyst with the Norwegian consultancy Rystad Energy.
According to data from the Refinitiv Vessel Tracking service, as many as 19 LNG ships were near or on their way to US Gulf Coast export ports on Friday.
In March, global LNG prices remained high, with European pricing continuing to drive demand from Asia. According to Refinitiv, the European LNG benchmark traded at $39.22 per million British thermal units (mmBtu) this week, up from $28.61 per mmBtu the previous week.
According to Refinitiv, Asia spot gas was trading at $35.00 per mmBtu this week, down from $37.50 per mmBtu in February.
