Global supply trends

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LNG supply continued to post healthy y/y gains of around 4.8 Mt in May, although sequential gains have been hard to come by since the start of the year. While summer numbers will always be moderated by planned maintenance, Q3 19 numbers could start to benefit from first exports from the 4.0 Mt Cameron T1—which is restarting following some start-up issues—followed by exports from the 4.5 Mtpa Corpus Christi T2 in July and the 4.4 Mtpa Freeport T1 in September. Even though the new trains will take a while to fully ramp up, supply additions over Q3 19 are looking to come in higher by 10.2 Mt y/y—a number that will still keep pressure on LNG prices.  

Initial indications from Kpler tanker tracking data and customs data suggest that global LNG exports in May came in around 4.8 Mt higher y/y, with June exports higher by around 4.7 Mt y/y. Kpler values for May were written down so it is no longer a record-setting month for exports, and we expect those June values to come closer to our 3.7 Mt growth expectation of last month. While the y/y supply growth remains high even if we have not yet seen any major sequential supply growth, monthly export volumes over Q2 19 are not exceeding those monthly volumes posted in December and January. Part of the lack of sequential growth comes from the new facilities expected online this summer, which are not really adding to production so far. The first export from the 4.0 Mt Cameron Train 1 facility occurred at the end of May, but since then feedgas use has been inconsistent; little has happened in the way of further exports, although that can occur at commissioning plants. Towards the end of June, the facility has started to take more feedgas, so we do expect that project to start putting more consistent exports into the market. June also saw first exports from Shell’s 3.6 Mtpa Prelude project after the protracted start to exports was resolved. As with Cameron, there looks to be a lull before loading the next cargo, but we expect both of these facilities to reach plateau production by September.

The y/y growth is starting to slow from Australia, with indicative y/y growth put at only 0.96 Mt y/y—the lowest increment for 2018, although Pluto was off on maintenance. Russian supply is up by a mere 0.6 Mt y/y and shows a sharp m/m fall due to maintenance at trains, with Sakhalin-2 off between 17 May and 21 June. The last of the big growth markets, the US, was a standout for growth—up by 1.5 Mt y/y, a minor sequential gain.