Houston — The tanker that loaded the first export cargo produced at Kinder Morgan's Elba Liquefaction facility may be headed to South Asia after its departure from Georgia, according to market sources.
As of Tuesday afternoon, the Maran Gas Lindos remained moored to a jetty at Elba. The vessel was expected to leave by Wednesday evening, though because it was loading slowly, the departure could be pushed to Thursday morning, the sources said. Pakistan was being eyed as the destination for the cargo, one of the sources said, while a second pointed to the Pakistan/India area. Final destinations can change based on market factors. To date, the US has sent 51 cargoes to India and 10 cargoes to Pakistan, S&P Global Platts Analytics data shows.
Backed by a 20-year offtake agreement with Shell, Elba was poised to become the sixth major US LNG facility to ship an export cargo, almost five months after production began at the site near Savannah. Activity at US facilities has ramped up to serve increased global demand during the winter and to take advantage of netbacks that, while relatively weak, remain positive.
Platts Analytics estimates that US Gulf Coast LNG netbacks from the Platts JKM, the benchmark price for spot-traded LNG in Northeast Asia, have averaged roughly 83 cents/MMBtu in December, a roughly 51 cents/MMBtu improvement over last month and trending at a slight 5 cents/MMBtu premium to the Dutch Title Transfer index, or TTF. While this improvement is not likely to drive a large diversion of cargoes away from Europe, it does indicate that each basin is equally competitive for US LNG.
The forward curve, however, shows a clear divergence come late winter, where cargoes will be incentivized once again to target Western European gas markets, with the March TTF netback to the US Gulf Coast currently estimated at $1.31/MMBtu, a 34 cents/MMBtu premium to the JKM. Considering that many US shippers are locking in loading schedules for February over the next week and a half, it appears likely that US LNG cargoes will continue to favor Europe at least through the end of the winter.
Since production began July 17, Kinder Morgan has declined to comment on Elba operations, while Shell has not responded to multiple requests for comment.
After docking at Elba over the weekend, there were several minor issues during loading, including a valve not working at the terminal at one point and several onshore valves at another point shutting down as a result of pressure in a shore line increasing rapidly and activating an emergency system, according to log records reviewed by Platts. The tanker shifted from one jetty to another Monday afternoon.
Elba will have a capacity of 2.5 million mt/year when all 10 trains planned for the facility are completed during the first half of next year. Several trains have come online since initial production began.
Besides Elba, Cheniere Energy currently operates five trains at Sabine Pass in Louisiana and two trains at Corpus Christi Liquefaction in Texas, Sempra Energy operates two trains at Cameron LNG in Louisiana, Dominion Energy operates one train at Cove Point in Maryland and Freeport LNG operates two trains in Texas.
-- Harry Weber, Harry.Weber@spglobal.com
-- Ross Wyeno, firstname.lastname@example.org
-- Edited by Bill Montgomery, email@example.com