Japan remains biggest buyer of US LNG for second month in September as prices rise: Platts cFlow

Houston — Japan was the largest buyer of US LNG in September, in line with August, and Chinese deliveries picked up as US Gulf Coast netbacks from Asia strengthened from lows seen during the height of the summer, showed data from cFlow, S&P Global Platts trade-flow software.

Elevated spreads from the Dutch TTF and Platts JKM, the benchmark for spot-traded LNG deliveries to northeast Asia, should incentivize robust US exports this fall as capacity holders race to generate cash flow before the year wraps up.

Completion of maintenance at Dominion Energy's Cove Point terminal in Maryland and the resumption of production at Sempra Energy's Cameron LNG in Louisiana, after being shut since late August due to damage from Hurricane Laura, also should boost activity.

Feed gas deliveries to major US liquefaction terminals totaled 7.1 Bcf/d on Oct. 2, up approximately 100 MMcf/d from the day before, S&P Global Platts Analytics data showed. The US Gulf Coast prompt month netback from the TTF recently netted roughly 43 cents/MMBtu while the comparable netback from the JKM was netting roughly 85 cents/MMBtu.

Japan, the world's biggest LNG importer, took five deliveries from the US during September, according to Platts cFlow. China picked up its buying, taking four US LNG cargoes in September, two more than over August.

Deliveries to South Korea, which overall has bought the most US LNG since Cheniere Energy exported its first cargo from Sabine Pass in Louisiana in 2016, were muted, with four deliveries in September. Coronavirus demand destruction and rising nuclear generating capacity has kept a lid on LNG imports there this year so far.

Platts shipping data showed that 42 LNG cargoes were loaded at major US terminals in September, a 27% increase over August, despite a series of storms that significantly impacted production on the US Gulf Coast. Platts Analytics estimated that upward of 13 cargo loadings may have been delayed or canceled due to the storms.

Advance cancellations of cargoes scheduled to be loaded at US terminals in October were said to be the fewest since May, providing a tailwind for further US LNG recovery. Currently, only about 60% of total US LNG export capacity is utilized -- leaving significant running room for gains.