Global supply trends

Published at 10:54 20 Dec 2018 by

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We expect LNG supply continued to post y/y gains in the last few weeks, although y/y increments are likely to be lower in December than they were in November given a high December 2017 base. Of the five trains expected to begin exporting this winter, Yamal T3 and Sabine Pass T5 have started producing LNG while Corpus Christi T1 has confirmed an export. Of the other two, Prelude keeps promising gas exports soon and Cameron LNG T1 looks at risk of delays.

It is still too early in the month for final data from customs and ports for November to be in for all countries. We continue to expect global LNG exports to be up by around 2.3 Mt y/y at 26.7 Mt. For December, we think the y/y rise in exports will be lower, at 1.25 Mt y/y, although that does reflect a very high 2017 base. We expect to see some sequential gains, with December exports at 28 Mt. Over Q1 19, we expect similar levels of y/y increments as in Q4 18, of 6.3 Mt y/y. For 2019, we forecast that LNG export growth will be up by 29.0 Mt y/y. Incremental supply is increasingly going to be dominated by US output.

As expected, December has seen first gas export from the 4.5 Mt Corpus Christi T1, while the 4.5 Mtpa Sabine Pass T5 showed evidence of moving towards its first export cargo. The Sabine Pass facility continued to take in more feedgas than consistent with the total capacity of its first four trains, as its fifth train moves towards commercial start-up. Cheniere has stated that Sabine Pass T5 will produce its first LNG in 2018, leaving the potential for a boost in flows at the end of December. The 5.5 Mtpa Yamal T3 is set to be exporting cargoes in Q1 19 and project developer Novatek has already announced that its first three trains at the facility are now fully operational. While short of actually announcing that Yamal T3 exports have started, it does suggest that this is imminent. Shell confirmed in early December that it expects production at its 3.6 Mtpa Prelude floating LNG unit ‘around’ the end of 2018, which suggests that if first gas exports are not in late December, then they should occur in early January 2019.

The 4.0 Mtpa Cameron LNG T1 project is also scheduled to start up in Q1 19, although we see some delay risk to this project. FERC granted Cameron LNG authorisation to introduce fuel gas in October and approval to begin commissioning its turbines in November. The six currently in-service US LNG trains averaged just over five months from when turbine commissioning began to the start of exports, which would place Cameron LNG T1’s start-up in April 2019.

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