US LNG WEEKLY: Gulf Coast Marker falls as European prices move downward

US Gulf Coast FOB cargo values slid during the holiday shortened week of Dec. 28-Jan. 4, tracking the decline in prices in destination markets.

Production remained strong at US liquefaction terminals, as netbacks were bolstered by falling freight rates.

As commissioning continued at Venture Global LNG's Calcasieu Pass terminal in Louisiana, the US was preparing for the startup of its seventh major export facility.

S&P Global Platts assessed the Gulf Coast Marker for February at $26.050/MMBtu, up $5.05/MMBtu versus the previous market session on Dec. 31 but down $5.25/MMBtu from the beginning of the week. Compared with a year ago, US Gulf Coast FOB cargo values remained up more than fourfold.

In the US Gulf, feedgas nominations for 2021 reached 10.4 Bcf/d on average, a year on year rise of 47%, S&P Global Platts Analytics data showed. Feedgas nominations in 2020 registered an average at 7.4 Bcf/d.

Better market economics as well as additional new installed liquefaction trains at Gulf facilities, including at Cheniere Energy's Sabine Pass in Louisiana, drove the gains in feedgas nominations. At Sempra Energy's Cameron LNG export terminal in Louisiana, feedgas demand rose year on year by 50% to 1.9 Bcf/d on average, while Freeport LNG in Texas showed a year over year advance of 64% to 1.8 Bcf/d on average.

December showed the highest monthly feedgas nominations in the US Gulf in 2021, with an average of 12.11 Bcf/d, a month on month rise of 6.8%, Platts Analytics data showed.

In addition to falling shipping rates, easing Panama Canal congestion has boosted market conditions for US LNG exporters.

The maximum wait Jan. 4 for unreserved LNG tankers was six days northbound toward the Gulf of Mexico and four days southbound toward the Pacific Ocean, according to the Panama Canal Authority.

Meanwhile, in Jan. 4 trading, the front-month US Henry Hub contract remained in the same $3.70-$3.85/MMBtu range of recent trading sessions after briefly flirting with $4/MMBtu Dec. 27-29.