The story of global LNG supply continued to be one of sustained y/y growth in August and September. The trend of growth is going to continue with the ramping up of the last of the trains expected to come online this year exporting its first cargo this month. We expect global supply will grow by 17 Mt y/y in Q4 19 and Q1 20, and that all of 2019 will post record supply growth of 42 Mt y/y. The last month has seen a raft of long-term supply developments, with FIDs from Russia’s 19.8 Mt Arctic LNG 2 project and long-term supply deals advancing for Tellurian’s Driftwood project and Magnolia LNG.
Initial indications from cargo-tracking data and customs data suggest that global LNG exports in August came in 2.6 Mt higher y/y and will be up by 5.4 Mt y/y in September, although we expect the September numbers to soften as the final numbers firm. However, global supply growth continues to be led by the US, with exports up by 1.4 Mt y/y in August and by 1.8 Mt y/y in September as outbound flows from the 4.5 Mtpa Corpus Christi T2 and the 4.0 Mtpa Cameron LNG T1 continue to ramp up. Cheniere announced that Corpus Christi T2 was significantly complete, meaning it has reached the point where it can sustain plateau production. Cameron LNG T1 was reported as having a technical flaw in mid-September, two weeks after declaring that commercial operations at the project had begun. Cameron LNG maintained that loading and export of LNG was unaffected by the technical issue and Kpler data put exports from the terminal as largely unchanged m/m. The 4.4 Mtpa Freeport LNG project announced first exports early September and Kpler data show the project exporting three cargoes over the month.
Exports from Australia grew at 0.7 Mt y/y for each of July and August, although initial indications are that growth in September could be a bit higher at 0.9 Mt y/y due to less maintenance. New operation at the 3.6 Mtpa Prelude terminal has been patchy, with Kpler showing a sequential drop in exports since July and only one cargo being exported in September. Ichthys has shown a continued average sequential ramp-up in exports, with the three-month average of exports at its highest of 0.62 Mt per month in Q3 19, compared to the 0.53 Mt per month in Q2 19.
Indonesia is the one exporter standing out as having posted a trend of y/y reductions. Over the January-August, Indonesian LNG exports were down by an average of 0.28 Mt per month y/y, for a drop in exports so far this year of 2.25 Mt y/y. The reductions have been a function of contracted volumes coming off and Indonesia being less interested in selling off cargoes into the relatively weak global market.