LONDON—Buyers of LNG from the United States continued scrapping September loadings due to weak global gas demand but fewer cargos were canceled than for the two previous months, industry sources said on July 21.
The exact number of cancellations was not immediately clear.
Two of the eight sources said as many as 25 or 26 cargoes might have been canceled for September, while one source estimated 15 to 20 cargoes and another said it was less than 20. Some sources suggested more than 26 cargoes were scrapped.
But the estimates were still lower than the 40 to 45 cancellations a month reported in July and August. In June, about 20 to 30 cargoes had been rejected, market sources said previously.
Although the number of cancellations slipped in September, the level still showed the market was severely oversupplied.
September cancellations were largely driven by weak prices in Europe, where gas storage tanks were full, two sources said.
They said one reason fewer cargoes might have been canceled in September was that traders were betting prices would rise by November and December, with some tankers already holding cargoes at sea for sale later, probably in Asia.
But the sources said it was still not yet clear whether demand in Asia in winter would rise significantly.
Demand in India was seen picking up slightly, which could help sellers to find buyers, sources said.
The majority of the cargoes for September loading were canceled from Cheniere Energy’s plants, namely Sabine Pass in Louisiana and Corpus Christi in Texas, one source said, saying this was a similar pattern to previous months.
Cheniere declined to comment on the cancellations.
A company representative said flexibility in its LNG contracts, such as allowing cargoes to change destination, helped customers manage their energy portfolios while still “providing Cheniere with reliable cash flow.”
Today’s featured Forty Under 40 honoree is Hunter Wallace, Atlas Sand’s COO who has led in the design, construction and capitalization of two frack sand plants in the Permian Basin.
Due to the COVID-19 pandemic and the lower oil price environment, Maersk Drilling revealed plans on April 24 to adapt its offshore crew pool.
NexTier Oilfield Solutions CEO Robert Drummond joins Hart Energy editors for a conversation centered on his outlook for the oilfield services sector’s recovery on the other side of this downturn.