New U.S. liquefaction trains and LNG export terminals are entering an increasingly oversupplied global market in which international LNG prices are well below where they stood a year and a half ago and price spreads from the U.S. have collapsed. That hasn’t deterred U.S. LNG exports from increasing with each new liquefaction train and capacity contract that goes into effect, as long-term offtake contracts, which anchor more than 90% of the U.S. liquefaction capacity, have made cargo liftings relatively insensitive to global prices. However, the destinations for U.S.-sourced LNG have been in flux based on the types of offtakers holding capacity on newly commercialized trains as well as shifting global prices. Today, we continue a series on cargoes and destinations, this time focusing on how contracts impact cargo destinations.
Steady as She Goes, Part 3 – How Long-Term Contracts Factor into U.S. LNG Cargo Destinations
