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Weak global market drives LNG cargoes to New England

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Weak global market drives LNG cargoes to New England

LNGshipments to New England dropped versus the prior winter but still continued ata healthy rate in spite of a mild winter and low spot natural gas prices as theglobal market continued to drive cargoes to the region.

FromNovember 2015 through the end of March, LNG sendout to totaled8.27 Bcf, averaging 54,383 Dth/d over the course of the season and reaching apeak of 427,561 Dth on Feb. 13. This winter's total represents a 30.5% declineversus the prior winter, but is 4.1 times and 2.8 times the winter of 2012-2013and the winter of 2013-2014, respectively.

"Theglobal LNG market has softened substantially year on year," ClipperDatadirector of commodity research Mickey Kwong said. "Some suppliers have aharder time finding distant buyers than others. Trinidad, which supplies toEverett, Mass., is one of them."

Kwongsaid the LNG market tends to stay more regional when the market isoversupplied, and Trinidad has a hard time competing for distant buyers inAsia, as reflected by a sharp decline in sales year over year to thosecountries.

Accordingto SNL Energy data, spot natural gas prices at Algon Gates averaged$3.088/MMBtu during the winter, roughly a third of the year-ago level.

"Pricesare indeed weaker year on year in New England, but so are LNG priceseverywhere," Kwong said. "They are not below the cost of producingand transporting LNG to Everett, [and] New England has the capacity to absorbthe LNG where other markets may not."

subsidiary provided the bulk of LNG supply, delivering 5.79 Bcf, or 70.1%, of the season'sLNG flowing onto the Algonquin system, while Excelerate Energy LP provided 58.2% of the Feb. 13 peak.

SNLEnergy is a part of S&P Global Market Intelligence. Market prices andincluded industry data are current as of the time of publication and aresubject to change. For more detailed market data, including SNL power, natural gas and coal index prices, as well as forwards and futures, visit our Commodities Pages. To view operational statistics oninterstate natural gas pipelines, go to our PipelineSummary Page. To view natural gas operational flow data for receipt ordelivery points, go to our OperationalCapacity by Point Page.