U.S. LNG Activity Up as Qatar Extends Force Majeure

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

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Summary

The amount of feed gas supporting exports of LNG from the United States is close to the all-time high of just over 19 billion cubic feet. That comes amid renewed tensions in the Middle East.

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Feed Gas up 20% Y-o-Y

In the United States, the amount of feed gas supporting exports of liquefied natural gas (LNG) was close to an all-time high, though issues are continuing overseas with shipping lanes off Yemen under attack and ongoing problems in Qatar.

IIR Energy in its NATGAS Today report for Thursday showed feed gas levels at around 18.4 billion cubic feet, nearly 20% above year-ago levels. According to Maria Sanchez, one of IIR's resident natural gas experts, the surge is "reflecting of continued growth in U.S. LNG export demand."

The United States is the world leader in LNG exports, supported by its vast shale natural gas reserves. That helped support global energy security when sanctions over the war in Ukraine sidelined Russian natural gas supplies in 2022, and again in the midst of the current conflict in the Middle East due to bottlenecks in the Persian Gulf.

The Sabine Pass terminal in the United States, operated by Cheniere Energy, is the largest in the country by feed gas volumes, with a design capacity of 4.56 billion cubic feet per day (Bcf/d).

Based on NATGAS Today, four of the nine operational export terminals for LNG are set for expansion. Federal reports, meanwhile, show domestic LNG exports are on pace to expand by another 8% this year, putting feed gas levels at around 18.6 Bcf/d.

Italy Seeing LNG Shipping Delays from Qatar

On Wednesday, Italian utility Edison SpA , a subsidiary of French energy company EDF, reported that force majeure was extended on its LNG supplies from Qatar. Edison said QatarEnergy would be unable to deliver the four cargoes scheduled for the Adriatic LNG receiving terminal in Italy until at least September.

QatarEnergy has seen facilities damaged severly by early-war drone strikes. Since the conflict began, Edison said 21 cargoes of LNG have been suspended due to issues beyond the control of QatarEnergy, for a total volume of about 2.7 billion cubic meters. That equates to 95 billion cubic feet of natural gas, though Edison said it could meet its own commitments.

"In this context, the company confirms that it is able to source alternative gas for all its customers and that it is fully capable of honoring its commercial commitments," Edison stated.

Middle East Tensions Remain High

Elsewhere, on-again, off-again indirect peace talks are ongoing in the Middle East, where maritime risks remain. On Wednesday, the United Kingdom Maritime Trade Operations Center reported two attacks off the coast of Yemen, where the Houthi rebel group enjoys Iranian support.

An oil tanker was approached by a small craft, while another vessel was boarded by armed mariners. Small-arms fire was reported.

"The crew remain secure in the citadel and are reported safe UKMTO are continuing to investigate," the agency said.

By the Numbers

• 95 billion cubic feet of natural gas lost to Italy in LNG
• 2% jump in European natural gas prices on Thursday

Key Takeaways

• Feed gas running to LNG export terminals close to all-time highs in U.S. market
• QatarEnergy extended force majeure on LNG to Italy

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