Turkey was the top destination for US LNG cargoes in February, as Europe continued to pull an outsized share of volumes amid reduced Russian supplies to the continent and feared disruptions due to the invasion of Ukraine, S&P Global Commodity Insights data showed March 3.
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Register NowStrong netbacks for Gulf Coast FOB cargoes, due to lower shipping rates and persistently high end-user prices, helped the Atlantic Basin attract US supplies.
The extreme volatility in the global LNG market showed no signs of abating as February turned to March.
The US delivered 93 LNG cargoes in February, a 24% reduction from the record number of cargoes delivered in January as available slots at regasification facilities were heard to be limited. Cargoes were able to stay on the water longer, due to low freight costs.
Turkey received 15 US cargoes in February – more than major Asian importers South Korea, Japan and China combined. Turkey's haul was more than double the monthly number of US LNG cargoes it had received as recently as October 2021. Spain was the No. 2 US LNG destination in February with 13 cargoes, followed by the UK with 10 and France and the Netherlands tied with 8.
The higher US LNG volumes flowing to Turkey in February followed state-owned Botas' statement in late January that it had been informed by the National Iranian Gas Company that due to the technical failure it was declaring force majeure on gas exports to Turkey via the Gurbulak entry point and would not be able to supply any gas for 10 days. While flows were said to resume more quickly, they did not immediately meet Turkish requirements. Iran is a major supplier of pipeline gas to Turkey.
US LNG deliveries to Europe, plus Turkey, totaled 70 cargoes in February, a 10% reduction from January but still more than four times the 16 cargoes that Asian countries received from the US during the latest month, S&P Global Commodity Insights data showed.
The strong deliveries to Europe came as interbasin price spreads combined with freight rate differences between the basins continued to favor the continent as a destination for US LNG cargoes. Also impactful toward the end of the month was Russia's invasion of Ukraine, which threatened to disrupt pipeline gas supplies to Europe. The US, EU and their allies encouraged global exporters to flow all available incremental LNG volumes to Europe.
The Platts Gulf Coast Marker for front-month April was assessed March 3 at $41.90/MMBtu, down $11.30/MMBtu from the day before but more than nine times higher than the value of US FOB cargoes loading 30-60 days forward a year earlier.
Panama Canal congestion, meanwhile, appeared to be increasing. The maximum wait March 3 for unreserved LNG tankers transiting the Canal was 11 days northbound and nine days southbound, according to the Panama Canal Authority.