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Gas Flows to Sabine Pass LNG Export Plant Drop to 11-Month Low

Natural gas flows to Cheniere Energy’s Sabine Pass LNG export plant in Louisiana are set to drop to the lowest levels in 11 months on Friday, adding to lower flows to other export facilities, which have weighed on U.S. benchmark gas prices this week.

Natural gas flows to the Sabine Pass facility were on track to drop to 3.4 billion cubic feet per day (Bcf/?d) on Friday, down from 3.8 Bcf/?d on Thursday and an average of 4.1-bcfd over the prior seven days, per LSEG data cited by Reuters.

Cheniere doesn’t have any planned pipeline maintenance at present, with the next planned period set to begin on June 25 for compressor work at the Creole Trail Pipeline, a 1.5 Bcf/?d pipe feeding part of Sabine Pass’s supply. 

Overall, natural gas flows to the seven U.S. LNG export plants have dropped in recent days, resulting in a decline in the U.S. benchmark natural gas prices at Henry Hub this week. Prices were on track for a 6% loss early on Friday as lower export volumes of gas mean higher gas availability on the domestic market.

So far this year, natural gas-fired electricity generation in the United States has jumped compared to the same period last year, as total power demand rose with warmer temperatures and demand from data centers.

In the week to June 12, average natural gas deliveries to U.S. LNG export terminals decreased by 0.3 Bcf/d from the prior week to 12.9 Bcf/d, the EIA said in its latest Natural Gas Weekly Update, citing data from S&P Global Commodity Insights. Natural gas deliveries to terminals in South Louisiana decreased by 5.4% to 7.6 Bcf/d, while natural gas deliveries to terminals in South Texas rose by 3.6% to 4.2 Bcf/d.  

Lower volumes of processed gas for exports from the U.S. could drive international LNG prices higher.

This week, Asia’s spot LNG prices remained basically flat compared to last week at $12.60 per million British thermal units (MMBtu), industry sources told Reuters, as higher temperatures expected in North Asia next week were offset by weakening demand in South Asia in anticipation of the monsoon season.

By Charles Kennedy for Oilprice.com

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