US LNG feedgas demand hits four-month low amid maintenance

US LNG feedgas demand fell May 19 to the lowest level since late January amid seasonal maintenance work, led by sharp declines in nominations at the Freeport and Sabine Pass LNG export terminals along the US Gulf Coast.

The nine major LNG export terminals operating in the Lower 48 were scheduled to receive about 16 billion cubic feet/day on May 19, S&P Global Energy CERA data showed, based on nominations for the morning cycle that could later be revised. That would mark the lowest level of feedgas demand since Jan. 27 and a decline of nearly 1.6 Bcf from May 18.

At the Freeport facility in Texas, flows were scheduled to decline by about 500 million cubic feet/day, or 35%, on May 19 to about 900 MMcf/d, which suggested two of the terminal's three trains were offline. Freeport spokesperson Heather Browne declined to comment.

Freeport on May 13 confirmed taking one of the plant's three liquefaction trains offline for scheduled maintenance that it expected to last "several weeks."

At Cheniere's Sabine Pass facility in Louisiana, flows were scheduled to decline by nearly 1.1 Bcf/d, or 24%. Cheniere spokesperson Bernardo Fallas declined to comment.

But the work appeared to coincide with scheduled maintenance on the Creole Trail pipeline that supplies the facility. The pipeline work was scheduled to last about 8 hours on May 19 and affect about 1.5 dekatherms of transportation capacity, according to a notice posted on the electronic bulletin board for the facility.

Spring maintenance at US LNG facilities is typically clustered around May and June.

Elsewhere, maintenance that began around the start of the month at Cameron LNG was ongoing in Louisiana. Similar turnarounds at Cameron in recent years lasted about three or four weeks.

The Golden Pass LNG plant in Texas, which is the country's newest export terminal, also recently confirmed a planned outage for startup-related maintenance following the export of its second cargo on May 9. Golden Pass did not provide a reason for the planned maintenance work or an estimate for how long it would last.

The downturn in US LNG terminal utilization is contributing to elevated spot prices at a time when supply disruptions caused by the war in the Middle East continue to support strong demand for US volumes.

Transits through the Strait of Hormuz, which typically account for about 20% of global supply, remain constrained.

Platts, part of S&P Global Energy, assessed the FOB Gulf Coast Marker for cargoes loading 30–60 days forward at $16.13/million British thermal unit on May 19, an increase of about 4% from the previous assessment, tracking gains in destination markets while remaining about 74% above pre-war levels.

In the Pacific, Platts assessed the July JKM benchmark price reflecting LNG delivered to Northeast Asia at $19.724/MMBtu on May 19, roughly flat day over day but still about 84% higher than prewar levels.

In the Atlantic, Platts assessed the DES Northwest Europe marker for July at $17.479/MMBtu on May 19, an increase of about 4% from the previous assessment and still about 77% higher than before the conflict.

The maintenance work in the US is also easing pressure on freight rates by increasing vessel availability.

Across LNG shipping, Atlantic two-stroke rates were assessed at $93,500/day May 19, down $500 on the day while still below the peak of $300,000/day reached on March 5 at the height of the Middle East conflict. In the Pacific, two-stroke rates were assessed at $65,500/day, unchanged day over day but still below the $210,000/day peak seen on March 6.