The Kinisis, a ship carrying liquefied natural gas from Trinidad, arrived at Dominion Energy Inc’s Cove Point LNG plant in Maryland on Saturday as some energy firms look to send cargoes to the United States with stockpiles in Europe filling fast.
Another ship, Madrid Spirit, is moving across the Atlantic Ocean from Nigeria that may also drop its cargo in the United States.
Global LNG demand growth has slowed this year as coronavirus lockdowns cut energy use, causing gas prices in Europe and Asia to drop to record lows.
Those price declines allowed U.S. gas futures to trade at a premium over major European benchmarks for the first time in a decade in late April.
With gas more expensive in the United States than Europe where stockpiles are expected to be full by the end of summer, U.S. LNG buyers canceled dozens of cargoes for June and July, and analysts said it made sense for some energy firms to send LNG to the United States for storage.
The United States, which is the world’s third biggest LNG exporter behind Australia and Qatar, does not receive a lot of LNG imports, but they do occur. There were 21 LNG deliveries to the United States last year, mostly from Trinidad, while the U.S. exported more than 500 cargoes.
European gas prices, however, have soared around 60% since the start of June after falling to record lows in late May, making gas in Europe more expensive than the United States again.
Energy traders said they expect LNG buyers to keep canceling U.S cargoes this summer – U.S. LNG exports fell to a 13-month low in June – but not by as much as previously thought following the spike in European gas prices.
Source: Reuters (Reporting by Scott DiSavino; Editing by Nick Zieminski)