US feedgas demand hits new high amid soaring LNG prices in end-user markets

US LNG feedgas demand hit a new record high at 12.55 Bcf/d on Dec. 17, based on morning nominations, as the export value of Gulf Coast FOB cargoes surged amid strong demand in Europe.

With colder weather predicted for most of Europe in the near-term – and the biggest temperature drops forecast for Russia – LNG markets could see more volatility in the coming week.

The positive trends for US LNG export activity were expected to continue heading into the new year as a seventh major US liquefaction facility, Venture Global LNG's Calcasieu Pass, ramps up and begins production. Small volumes of feedgas were observed flowing to the Louisiana facility on Dec. 17, as commissioning toward startup continued.

Record-breaking global LNG prices and favorable netbacks to the Gulf Coast have continued to incentivize exports from the US.

Prices in destination markets in Asia reached new highs on Oct. 6 and in Europe on Dec. 17. US Gulf Coast FOB export cargo values rose to a new record Dec. 17, with the Platts Gulf Coast marker assessed at $41.40/MMBtu.

The higher netbacks to the Gulf Coast have been helped by lower freight costs. Panama Canal congestion remained relatively low, with the maximum wait on Dec. 17 for unreserved LNG tankers at three days northbound and five days southbound, according to the Panama Canal Authority.

Total US feedgas demand was up about 480 MMcf/d Dec. 17 day on day, largely due to increased deliveries to Freeport LNG.

The total morning nominations could be revised lower, with pilot service suspended again Dec. 17 due to fog along the channel serving Cheniere Energy's Sabine Pass export terminal in Louisiana. The fog was expected to last through Dec. 20, according to a notice to shippers.

According to Venture Global, Calcasieu Pass was about 91% complete as of the end of October. All 18 liquefaction modules have been received from Italy and set on foundations, and the facility is undergoing commissioning work.