US LNG exports to Europe surge in November on higher prices

By Curtis Williams

HOUSTON (Reuters) – U.S. LNG exports to Europe surged in November as the world’s largest producer of the superchilled gas sent more cargoes to the continent and fewer to Asia and Latin America, according to preliminary data from financial firm LSEG.

European natural gas prices climbed in November to their highest levels in two years on fears remaining Russian pipeline supplies to Europe will be halted or face further curtailment.

European natural gas prices averaged $12.90 per mmbtu in November, more than a dollar higher than $11.79 in October and higher than $12.32 in September, with the benchmark front-month contract at the Dutch TTF hub reaching 49.03 euros per megawatt hour on Nov. 22, equivalent to $14.97 per million British thermal units (mmBtu).

The United States is the world’s largest LNG exporter and played a major role in 2022 after Russia’s invasion of Ukraine led to sharp reductions in Europe’s access to Russian gas imports.

Nearly seven of every 10 U.S. LNG cargoes headed to Europe in November as LNG exports rose to more than 7.75 million metric tons (MT), up from 7.56 MT in October, with cooler weather favoring higher output, according to LSEG data.

Exports to Europe reached 5.09 MT in November or 68% of total LNG exports, up from 3.65 MT, or just under 48% of total exports recorded in October. Asia accounted for about a fifth of total exports, according to LSEG data.

The U.K. was a major player in the market, buying .81 MT, or one in every seven cargoes sold to the continent, according to LSEG data.

With the arbitrage favoring Europe, U.S. LNG exports to Asia fell to 1.64 MT or 21% of total exports in November, from 2.67 MT or 35% in October, LSEG data showed.

There were fewer U.S. LNG cargoes destined for Latin America in November with only .58 MT sold to the U.S. neighbors in November, down from .9 MT in October, LSEG data showed.

There were three cargoes sent to Egypt for a total of .23 MT and three cargoes for a total .21 MT that were for orders with no set destination as of Nov. 30.

U.S. producers have been ramping up output as the weather cools with top exporter Cheniere Energy leading the way. On Monday, Cheniere was expected to pull over 5 billion cubic feet (bcf) of natural gas for the fifth time in seven days at its Sabine Pass, Louisiana, export plant, according to LSEG data.

Overall U.S. LNG natural gas demand averaged 13.65 bcf per day in November and could have been higher had the second-largest U.S. LNG exporter, Freeport LNG, not experience several outages in November, LSEG data showed.

With the United States expecting first LNG in December from Venture Global’s 20 MTPA Plaquemines LNG plant in Louisiana and Cheniere’s 10 MTPA midscale expansion project, also in the Pelican state, this month could challenge the U.S. all-time record LNG production.

(Reporting by Curtis Williams in Houston)