June 22, 2024
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U.S. LNG Exports Surge in May as Freeport LNG Returns to Full Production

U.S. exports of liquefied natural gas (LNG) saw a significant rebound in May, thanks to the return of Freeport LNG, the country’s second-largest exporter, to full production, and an increase in supplies to Asia, according to preliminary data from LSEG.

The United States, which holds the title of the world’s largest LNG exporter, has been a crucial supplier to Europe following Russia’s invasion of Ukraine.

However, overall LNG exports had been declining for four consecutive months earlier this year. This decline was attributed to maintenance activities at various plants, including mechanical issues at Freeport LNG, which led to three of its processing units being offline for nearly two months, resulting in a reduction in exports through April.

In May, U.S. LNG exports jumped to 7.60 million metric tons (MT), up from 6.19 million MT in April, and close to the 7.61 MT exported in March, as per LSEG data. Freeport LNG, capable of producing 15 million metric tons per annum (MTPA), resumed full production on May 10.

According to Reuters, U.S. exporters capitalized on higher spot prices in Asia by sending 3.15 MT, or 41% of total exports, up from 2.02 million tons, or 32.6%, in April.

The surge in Asian spot prices was driven by firm demand due to hot weather increasing power generation needs, and buyers taking advantage of lower LNG prices compared to the same period in 2023.

Despite the increased exports to Asia, Europe remained the largest export market in May, receiving 3.18 MT, or just under 42% of total U.S. LNG exports. This was a slight decrease from 3.25 million MT, or 52.5%, in April, and 4.31 million MT, about 57%, in March. However, the volume was barely ahead of the exports to Asia.

Exports to Latin America and the Caribbean also rose, with May shipments reaching 940,000 tons, or 12% of total U.S. LNG sales, up from 850,000 tons in April, according to ship tracking data.

Gas flows to the seven major U.S. LNG export plants increased to 12.9 billion cubic feet per day (bcfd) in May, up from 11.9 bcfd in April, largely due to the resumption of operations at Freeport LNG’s 2.1-bcfd plant in Texas.

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