US LNG WEEKLY: FOB Gulf Coast cargo values fall for fourth straight week

US FOB Gulf Coast LNG cargo values dropped for the fourth straight week as falling prices in destination markets weighed on netbacks.

S&P Global Commodity Insights assessed the Platts Gulf Coast Marker for cargoes loading 30 to 60 days forward at $22.550/MMBtu April 26, down $1.600/MMBtu week on week. Northwest Europe remained the best netback.

Feedgas nominations to US liquefaction facilities were slightly higher week on week, at 12.2 Bcf/d on average April 19-26 compared with 12.1 Bcf/d the previous week.

The latest figures showed six of the seven major US LNG export facilities were operating at or near full capacity. Utilization at the seventh, Freeport LNG in Texas, was affected primarily during the latest week by scheduled maintenance, which was extended by a few days. Also, units there briefly tripped offline on two separate occasions during the week.

While US FOB cargo values have fallen in recent weeks, they are still up sharply from a year ago.

Amid the market dynamics, US LNG exporters, offering relatively low fixed fees and destination flexibility for cargoes, have signed new long-term FOB contracts with buyers in Europe and Asia. Cheniere, Venture Global LNG and NextDecade have been among the exporters and project developers that have announced new deals in recent months.

During the latest week, on April 20, Kinder Morgan officials said the company may be interested in expanding its Elba Liquefaction facility in Georgia and resurrecting its shelved Gulf LNG export project in Mississippi.

Shell is Kinder Morgan's sole customer at Elba, as an offtaker. The facility has an export capacity of 2.5 million mt/year. Kinder Morgan continues to collect reservation fees from a regasification customer at Gulf LNG, though there is virtually no demand for LNG imports along the Gulf Coast.

The NYMEX Henry Hub prompt-month contract gained 18.10 cents in April 26 trading to reach $6.85/MMBtu at preliminary settlement, data from CME Group shows. The May contract has tentatively explored the upside over the last two trading sessions, gaining just over 30 cents since April 22 as unseasonably wintry weather in the US Midwest and Appalachia have boosted gas demand. Further down the curve, nearly all the Winter 2022-23 contracts recovered to trade above $7/MMBtu April 26.