US Department of energy has recognized the increase in LNG exports
Low demand and gas prices in Europe and Asia that make the economy the supply of liquefied natural gas (LNG) from the United States ineffective, buyers refused 110 year supply of LNG, follows from the monthly short-term forecast of the energy information administration of U.S. Department of energy (EIA).
"Mild winters and restrictive measures related to COVID-19, led to the decline in world demand for natural gas and increase its reserves in Europe and Asia, which reduced the need for import of LNG. Low spot prices for natural gas and LNG in Europe and Asia have reduced the economic viability of LNG exports from the United States, which is extremely price sensitive," - said in the forecast.
"In the summer of 2020 more than 70 of the export of LNG from the USA in June and July were cancelled, more than 40 in August. For comparison, 74 shipments were dispatched from the U.S. in January 2020", adds EIA.
According to the EIA assessment as a result of these cancellations, the volume of LNG exports from the US in June was on average 3.6 billion cubic feet per day, and in July and August 2020 it is expected to average 2.2 billion, which involves the use of the export potential of LNG by 25%.
US Department of energy expects that "increased LNG exports from the U.S. will bottom out in September and is expected to average 7.1 billion cubic feet per day starting from December 2020-February 2021 to the extent that, as the global demand for natural gas will gradually recover". "The export of LNG from the United States during the first four months 2020, the average was 7.7 billion cubic feet per day, but decreased by 17% between April and may," notes EIA.
Overall, US Department of energy has again lowered its forecast for the export of LNG from the country. In 2020, the Agency expects the growth rate to 5.35 billion cubic feet per day, whereas in June was waiting for 5.7 billion. Forecast for 2021 has also been reduced - to 7.28 billion cubic feet per day from the previously expected of 7.31 billion. In 2019, the U.S. LNG exports amounted to 4.98 billion cubic feet.