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Netherlands tops list of importers from Cheniere LNG terminal in Texas

Highlights

Europe helping rebalance global market amid trade flow shifts

Increased gas-fired power generation, US-China tensions at play

Houston — Almost a year after Cheniere Energy began exporting LNG from its terminal near Corpus Christi, Texas, the Netherlands has emerged as the biggest importer from the facility, S&P Global Platts Analytics data shows.

The trend is further evidence of the importance Europe is playing taking US cargoes and helping to rebalance the market amid Washington's protracted trade war with Beijing. Of the top 10 countries that have imported the most LNG from the Texas facility, five are in Europe. Countries there also have been absorbing a meaningful amount of LNG from Cheniere's other export facility, at Sabine Pass in Louisiana.

As of Wednesday, 70 cargoes, with volumes totaling 226 Bcf of LNG, had been shipped to date since December 2018 from Corpus Christi Liquefaction, 10 of which landed in the Netherlands, Platts Analytics data shows. Argentina has taken the second most number of cargoes from the Texas facility, at seven, followed by Spain at 6 and Mexico and Italy each at 5. Nine cargoes remained on the water as of Wednesday.

Relatively low gas prices have spurred increased gas-fired power generation in parts of Europe, including Spain and Germany. That, in turn, has supported robust demand in the region for LNG imports. Further, more LNG is available to European buyers, thanks to the 25% tariff that China is currently imposing on imports of US LNG in retaliation for US duties on imports of Chinese goods. No US LNG cargoes have been delivered to China since March.

There are currently two liquefaction trains operating at Cheniere's Texas terminal, while a third one is under construction. Train 1 capacity is largely contracted to Indonesian state-owned oil and gas company PT Pertamina and Spanish utilities Endesa and Iberdola. Train 2 capacity is largely controlled by Cheniere's marketing unit, as its long-term offtake contracts do not come into force until the second quarter of next year.

EXPANSION PLANS

Beyond the existing footprint at Corpus Christi Liquefaction, Cheniere has proposed a midscale liquefaction expansion at the site that would include up to 9.5 million mt/year of capacity. A positive final investment decision is expected during the first half of next year. Cheniere is pursuing additional commercial deals with Permian natural gas producers, similar to ones it has with EOG Resources and Apache, to build support for the Texas expansion.

During a conference call with analysts November 1 to discuss Cheniere's latest financial results, executives highlighted Europe's key role in taking cargoes from both of its export terminals, as well as from other US facilities that have brought new capacity online.

"Incremental supply during the third quarter was absorbed primarily by Europe," Chief Commercial Officer Anatol Feygin said on the call. "The region continued its global balancing role as we also saw in the first half of the year."

Feygin said the record 18.4 million tons of LNG that Europe imported during the July-September quarter was nearly double year-ago levels.

"We fully expect the emerging markets and actually, Old World Europe, to continue to grow and have fundamental demand growth," he added.

PIPELINE WORK

Feedgas flows to Corpus Christi Liquefaction Wednesday were down by almost half of last week's levels, amid maintenance at a pipeline interconnection that feeds the terminal.

NGPL is conducting maintenance and upgrade work on its Corpus Christi Pipeline Sinton meter in San Patricio County, Texas, that will restrict flows for the duration of the work, which started Wednesday and was to last until Friday. That will likely affect feedgas deliveries to Cheniere's LNG facility in Texas.

NGPL's deliveries to this interconnect with Cheniere's terminal averaged 313 MMcf/d in October, an increase of approximately 30 MMcf/d from September deliveries. Deliveries over the first three days in November increased, before ramping down since Monday. Feedgas flows to Corpus Christi Liquefaction registered 800 MMCf/d on Wednesday, compared with 1.5 Bcf/d on November 1, Platts Analytics data show. A Cheniere spokesman declined to comment on the terminal's daily operations.

-- Harry Weber, Ross Wyeno and Emmanuel Corral, newsdesk@spglobal.com

-- Edited by James Bambino, newsdesk@spglobal.com