LNG

Freeport LNG Development, majority-owned by founder and CEO Michael Smith, has ramped down operations in the wake of Winter Storm Uri and is considering rescheduling cargoes to long-term buyers to accommodate a spike in US gas demand since the onset of this week’s massive winter storm.

As of January 25, the ‘monster winter storm’ Fern has severely impacted feedgas supply for US LNG exports, with restrictions on the Creole Trail pipeline reducing flows to Sabine Pass terminal. Freeport LNG might also go offline as ice is accumulating along its feedgas corridor. 

Japan’s biggest power generator JERA has signed a five-year Sale and Purchase Agreement (SPA) with Woodside Energy Trading Singapore to buy three LNG cargoes annually from 2027, securing winter supply of about 200,000 metric tons per year mainly sourced from Woodside’s Scarborough project.

Shipping companies and LNG portfolio players are slowly returning to the Panama Canal, where a two-year drought restrained traffic. As northern-hemisphere winter weather is sending natural gas demand soaring, most US LNG cargoes are currently looking for a home in Europe and avoid having to queue up for a costly Panama Canal transit.

Turkish state gas company BOTAS has agreed to purchase a total of 11 bcm of LNG-equivalent over 10 years from Germany’s state-owned SEFE and Italy’s Eni starting from 2028. Shipments will take place in winter only, sourced the partner’s Atlantic Basin supply portfolios.

LNG exports from the United States are set to reach a record 10.7 mt in November, solidifying the country's lead over rivals Qatar and Australia. This marks a 40% jump in US exports, according to Kpler data, amid record loadings and a strong pull from European and Asian buyers stockpiling for winter.

Technical factors support upward momentum for Henry Hub gas prices, especially for the winter 2025/26 strip. Energy Aspects’ quant analysts team sees open interest (OI) erosion in the near-term contracts which creates opportunity for new risk to be added along the curve.

Japan’s largest energy company JERA has signed a non-binding Heads of Agreement with Woodside Energy Trading Singapore to buy three LNG cargoes, or approximately 0.2 mtpa, during December to February to meet peakload power demand in the winter season. LNG from Australia will be shipped over a 5-years tenure starting from 2027.

Turkey’s incumbent gas importer BOTAS has issued a tender for delivery of five LNG cargoes in the first quarter of 2025 that will support the supply and demand balance in the EU gas market this winter. Analysts caution, however, Egypt’s new FSRU poses upside risk to non-European demand.

Global LNG markets have been pretty unphased by last week’s US election results: near-term demand fundamentals are net bearish as traders await the onset of more severe winter weather. Looking at Q1-2025, uncertainty abounds with regards to Egypt’s LNG demand due to insufficient domestic gas production and escalating tensions in the Middle East.