Global supply trends

Published at 11:39 29 May 2019 by . Last edited 11:18 22 Aug 2019.

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LNG supply continued to post healthy (over 5 Mt) y/y gains in April that are expected to continue in May despite some high-profile maintenance issues. The strength of Q2 19 supply suggests a heavier annual maintenance period in Q3 19 as trains will be preparing for another busy winter. Growth is predominantly coming from the countries that have added trains over the last 12 months, although H1 19 has seen little in the way of new trains starting to export. That is expected to change imminently with first exports from the 4.0 Mt Cameron T1, followed by exports from the 4.5 Mtpa Corpus Christi T2 in July and the 4.4 Mtpa Freeport T1 in September. Even with little in the way of added volumes from new trains, supply additions over the two summer quarters are looking to come in higher by an astonishing 24 Mt y/y.   

Initial indications from Kpler tanker tracking data and customs data suggest that global LNG exports in April came in around 6.7 Mt higher y/y and that May exports are coming in higher by around 5.2 Mt y/y. Previous months have seen initial values written down by around 1 Mt, but this still points to remarkably high y/y growth and a fairly flat m/m sequential profile across the H1 19 period. Depending on revisions, May will have the highest ever monthly exports. The lack of a notable seasonal dip in output could reflect, like last year, more maintenance pushed into Q3 19 so facilities are ready for an expected busy winter period.

The new facilities expected online this summer have not really been adding to production so far this year, although the first export from the 4.0 Mt Cameron Train 1 facility is expected imminently, and those volumes will start to ramp up over the coming months, with plateau production likely reached by September. The y/y growth is coming from the usual suspects, with Australia up by 2.1 Mt y/y, Russia up by 1.2 Mt y/y and the US up by 1.1 Mt y/y—all exporters with new trains helping drive added growth. Outside of the new trains, Egypt is exporting 0.27 Mt more y/y while Algeria is exporting 0.2 Mt more, as its pipeline exports into Europe have been in decline. Indonesia is proving an exception, with exports down every month so far y/y.  

With another month gone, the trains expected for an early 2019 start-up have yet to appear. Apart from Cameron, others are still lagging, with questions hanging over the 4.2 Mtpa Ichthys T2 and first export date from Shell’s 3.6 Mtpa Prelude project remaining a mystery.

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