Re-exports of liquefied natural gas (LNG) occur when foreign LNG shipments are offloaded into above-ground U.S. storage tanks located on-site at regasification terminals and then subsequently reloaded onto tankers for delivery to other countries. A total of 53.4 billion cubic feet (Bcf) were re-exported in 2011, compared to 32.9 Bcf in 2010. Re-exports of foreign-sourced LNG from U.S. LNG terminals exceeded 12 Bcf in January 2011, equivalent to about 30 percent of U.S. LNG import volumes during that month. There are currently three U.S. LNG terminals that have been granted Federal approval to re-export LNG: Freeport in Texas, and Sabine Pass and Cameron in Louisiana.
U.S. LNG imports and deliveries from terminals to the domestic market are down relative to last year due to increasing domestic natural gas production and average U.S. spot natural gas prices that are well below levels in other major natural gas markets with the capability to import LNG.
Typically, low utilization at these terminals has created available LNG storage capacity in their storage tanks. Re-exportation of LNG lets marketers and suppliers store gas that may have come on the market during times of excess world natural gas supply, while waiting for higher prices before delivering their LNG, typically to the higher-paying markets in Asia, Europe, and South America.
(For the Week Ending Wednesday, February 22, 2012)
- Spot prices at most trading locations across the country posted only small changes for the report week. Spot price changes were mixed, with prices at most locations rising or falling by less than 10 cents. The Henry Hub spot price posted a net increase of 6 cents, rising from $2.54 per million British thermal unit (MMBtu) last Wednesday, February 15, to $2.60 per MMBtu yesterday.
- At the New York Mercantile Exchange, the near-month (March 2012) contract rose from $2.425 per MMBtu last Wednesday to $2.643 yesterday.
- Inventories of working natural gas in storage were 2,595 Bcf as of Friday, February 17, according to EIA's Weekly Natural Gas Storage Report (WNGSR). This represents an implied net withdrawal of 166 Bcf
- The natural gas rotary rig count fell by 4 to 716 last week, according to data reported on February 17 by Baker Hughes Incorporated.
Changes in spot prices during the report week were mixed, and small. The Henry Hub price rose 6 cents on the week, from $2.54 per MMBtu last Wednesday to end yesterday at $2.60 per MMBtu. Prices at almost all trading locations showed double-digit increases on Friday, February 17, heading into the long weekend, likely in anticipation of forecasted cold weather, but these gains were reversed in the following trading days. Compared to the rest of the country, several trading points in New England posted relatively large declines for the week. The spot price at the Algonquin Citygate, which serves Boston, declined 20 cents per MMBtu to end the week at $3.07 per MMBtu.