U.S. LNG cargoes’ ability to reach different destinations has become increasingly important for the global market as more liquefaction trains continue to come online, oversupply conditions worsen, and international price spreads have shrunk. Earlier this week, Freeport LNG’s first train began commercial service, marking the sixth U.S. liquefaction and export facility to start commercial operations. About 30% of U.S. long-term contracts for currently operating or commissioning liquefaction trains are held by global portfolio players — i.e., offtakers with large international portfolios and the ability to shift cargoes around the world as prices move. And destination flexibility doesn’t end there, as the other types of offtakers also have shown an increased willingness to divert or even re-sell cargoes in the spot market to better take advantage of shifting price spreads. Today, we continue a series on U.S. LNG export trends, this time focusing on how global prices impact cargo destinations.
Steady as She Goes, Part 4 – How Global Prices Drive U.S. LNG Cargo Destinations
