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.”
Recommended Reading
CorEnergy Infrastructure to Reorganize in Pre-packaged Bankruptcy
2024-02-26 - CorEnergy, coming off a January sale of its MoGas and Omega pipeline and gathering systems, filed for bankruptcy protect after reaching an agreement with most of its debtors.
NGL Growth Leads Enterprise Product Partners to Strong Fourth Quarter
2024-02-02 - Enterprise Product Partners executives are still waiting to receive final federal approval to go ahead with the company’s Sea Port Terminal Project.
After Megamerger, Canadian Pacific Kansas City Rail Ends 2023 on High
2024-02-02 - After the historic merger of two railways in April, revenues reached CA$3.8B for fourth-quarter 2023.
Enbridge Advances Expansion of Permian’s Gray Oak Pipeline
2024-02-13 - In its fourth-quarter earnings call, Enbridge also said the Mainline pipeline system tolling agreement is awaiting regulatory approval from a Canadian regulatory agency.
Canadian Natural Resources Boosting Production in Oil Sands
2024-03-04 - Canadian Natural Resources will increase its quarterly dividend following record production volumes in the quarter.