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US LNG production drops in May from April record

The preliminary LSEG ship tracking data shows that the U.S. liquefied gas output dropped in May as a result of plant outages and repairs at the largest export facility.

U.S. LNG production is a major factor in global LNG price.

According to LSEG, the U.S. exports 8.9 million metric tonnes of LNG in May, down from a new record of 9.3 MT set in April.

The LSEG data revealed that all U.S. plants had short periods in May when compared with April. Cheniere Energy confirmed its Sabine Pass facility, which is the largest in the country, at 30 MTPA.

Since May 31, gas flows into Sabine are at a low of 3.1 bcfd, a record low for 23 months. This compares to an average of 4.3 Bcfd for the previous seven days.

Freeport LNG reported several other outages.

Europe was the preferred market for U.S. exports of LNG as traders sought to profit from higher prices for superchilled gases in Europe when compared with Asia.

The European benchmark Title Transfer Facility in the Netherlands increased its gas prices to $11.68 per million British Thermal Units (mmBtu), up from $11.48 per mmBtu in April, and to an average of $10.12 by May 2024.

LSEG data revealed that of the 8.9 MT LNG exported by the U.S. in April, 6.05 MT, or 68%, went to Europe. This is the same percentage as it was in April.

LSEG data show that exports to Asia remained low at 1.88 MT, or 21%, compared with 2.05 MT, or 22%, of total exports.

China's demand has been muted by a combination of pipeline imports, renewable energy and a weak industrial sector. China, which is the largest LNG consumer in the world, continues to buy U.S. gas to avoid paying tariffs.

Prices for the Asian benchmark Japan Korea Marker, or JKM, fell to $11.83 per million Btu (mmBtu) in May. This is down from $12.23 per mmBtu last month but higher than an average of $10.10 in May 2024.

Exports to Latin America fell as well, with.66MT sold in May as compared to.68MT in April.

Egypt purchased 3 cargoes totaling.22MT while Bahrain purchased one cargo at.07MT. One cargo left Cheniere's Sabine Pass facility on May 23 but was still in the Caribbean Sea as of Monday, according to LSEG ship tracker data.

By 2030, the United States will be the largest LNG exporter in the world. Six projects are expected to receive financial approval by 2025. This will add 90 million metric tonnes per annum of LNG to its output. Curtis Williams, Houston Reporting Nick Zieminski

(source: Reuters)