U.S. Feed Gas for LNG Hits Record, IIR Data Show

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Helped by an over-performance at the Plaquemines facility in Louisiana, feed gas supporting U.S. exports of LNG hit a record during the weekend. Meanwhile, geopolitical risk continues to pay off for companies dealing in the super-cooled gas.

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Plaquemines Does the Heavy Lifting

U.S. feed gas supporting exports of liquefied natural gas (LNG) set a record during the weekend, supported by overperformance from Venture Global's Plaquemines facility, according to Industrial Info Resources data.

Industrial Info Resources in its NATGAS Today report for Tuesday showed that revised data put feed gas at about 20.17 billion cubic feet per day (Bcf/d) during the weekend, a new record. Plaquemines in Louisiana is running overcapacity in terms of feed gas, but by Tuesday, overall levels had moved closer to 19 billion cubic feet due to lower deliveries to the Sabine Pass terminal in Louisiana, operated by Cheniere Energy.

Data from Industrial Info Resources show Sabine Pass is the largest terminal by volume, with the capacity to process as much as 4.56 Bcf/d into LNG for exports.

The Industrial Info Resources Global Market Intelligence (GMI) offers detailed plant profiles for Plaquemines and Sabine Pass.

Those exports are highly sought-after due to supply restrictions stemming from the conflict simmering in the Middle East. Even though U.S. President Donald Trump has signaled a pause in the fighting, shipping lanes for global commodities remain at risk. As recently as Sunday, a British maritime risk agency was reporting that vessels were struck in the Strait of Hormuz.

QatarEnergy, which saw much of its LNG infrastructure damaged during the height of the conflict this summer, has leaned on U.S. supplies as an alternative. Last month, QatarEnergy signed a deal with Australian energy company Woodside to secure cargoes from the planned Louisiana LNG terminal.

The Louisiana LNG terminal could be delivering super-cooled gas by 2029. Louisiana LNG is already sanctioned for deliveries. If completed as expected, it would have an export potential of about 3.8 Bcf/d of gas in the liquid form, data show. The Industrial Info Resources GMI database offers a detailed project report and plant profile.

Rather than take cargo directly, QatarEnergy would simply book volumes from U.S. terminals. The U.S. emerged as the world leader in LNG exports in 2022, just as the global market was adjusting to the loss of Russian gas due to sanctions imposed over the invasion of Ukraine.

By the Numbers

• 493% year-over-year increase in net income for Venture Global in Q3
• 25% year-over-year increase in deliveries

Risk Means Reward for LNG Companies

Amid ongoing supply issues and a geopolitical risk premium on market prices for LNG, companies are doing well. Cheniere Energy in late October reported that its net income during the third quarter increased 26% year-on-year to $639 million.

On Tuesday, Venture Global said it booked 20-year supply agreements with both ConocoPhillips and China Gas during the third quarter. Cargoes to existing customers increased 25% year-on-year, while net income of $2.5 billion marked a staggering 493% increase from the same period last year.

Apart from Plaquemines, the company said Calcasieu Pass yielded 37 cargoes of LNG during the quarter, surpassing its obligations under existing sales and purchase agreements.

"With cooler weather and completion of summer maintenance, we expect modestly higher fourth-quarter production," the company added.

It's been a decidedly mild autumn so far in North America. A warming trend is expected over the coming weeks, with temperatures across the northern and central Plains hovering well above normal. The El Nino weather pattern should lead to a warmer-than-normal winter, while European climate models already showed October was the warmest October on record.

Key Takeaways

• U.S. feed gas for LNG set a new record during the weekend.
• U.S. supplies offer some diversity for global molecules sidelined by Middle East tensions

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).