Financial Wire

US LNG Tanker Departures Hit New High in March as Importers Seek Alternatives to Middle East, RBC Says

-- Tanker departures, carrying US liquefied natural gas, to import markets reached a new high in March amid disruption to supplies of Middle Eastern origin, RBC Capital Markets said on Tuesday, based on data from a new US LNG shipment monitor it is establishing.

RBC said it estimates that 43% of departures with an undeclared destination were bound for Europe. Shipments destined for Asia doubled month over month while Europe remains the destination for most departing cargoes.

Asia-Pacific is likely to increase demand as a result of losses of some Middle Eastern cargoes, RBC noted.

It said with about 83% of Qatari LNG export capacity intact, the country will still need 4-6 weeks to ramp up movements while the remaining 17% of export capacity will take years to restore.

Among new capacity additions in the US, Golden Pass has now produced its first cargo while Corpus Christ Stage 3 Train 5, with 1.5 million tons per annum capacity, was largely completed by March 27th, slightly ahead of schedule.

RBC said it expects Corpus Christi Stage 3 Trains 6 and 7, each with the same capacity as Train 5, to be largely complete over the summer to autumn period.

The Sabine Pass Train 7 has now established commercial contracts and Calcasieu Pass 2 Phase 2 reached a final investment decision in mid-March.

RBC's data counted 145 LNG tanker departures in March, a record and a 23% increase over and above February's count.

The increase was achieved in part by producers making use of small amounts of unused production capacity, to maximize output as demand rises amid the global supply shock.

RBC said third-party tracking data will later help confirm its expectation that a growing number of cargoes will head to Asia amid a "scramble" for swing cargoes and due to arbitrage opportunities that have arisen.

The research note said that all 36 trains are producing LNG at the major Plaquemines facility, with expectations of 2026 production of around 26 million tons, later rising to 28 million.

The installation is currently commissioning, with contracts starting in Q4 for its Phase 1, 13.3 million tons per annum section. Phase 2 with 6.7 mtpa will start commissioning around mid-2027, RBC said.

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