LNG

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US LNG exports saw continued decline since April, which began to accelerate May. US LNG shipments continued to fall last week, thus indicating a continuation of the trend. Several factors have converged in subduing US LNG exports, in our view, chief among which is lower than usual Northeast Asian demand, strong competition in the Pacific and high fixed costs underpinned by liquefaction fees.

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The Golar Kelvin, carrying the larger of the two Malaysian cargoes earmarked for Myanmar’s first LNG import project, arrived in the Gulf of Martaban, apparently waiting to begin transferring its cargo. Whilst this is an important indicator when operations at Thanlyin LNG would begin in earnest, questions remain how the project will operate going forward.

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Monthly trade decreased by 0.46mmt in May following steep demand reductions in South Korea, Japan and Europe

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Chevron confirmed it would consider serious offers for its stake in NWS LNG, Australia’s first large-scale LNG development. Already plagued by asset write-downs and a CAPEX cut announcement even before COVID-19, the energy major is clearly assessing to what extent its stake in NWS LNG still meets its own criteria of ‘high return, low risk’.

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The easing of lockdown measures in India promises a return to accelerated demand growth. In mid-May, our data indicated year-on-year demand growth acceleration. Whilst indeed year-on-year  demand grew that month, helped by emission-reduction targets, the lockdown measures have noticeably flattened the country’s demand growth curve, meaning that June demand is currently looking to trail its equivalent of last year.