Buyers in Asia and Europe have cancelled the loading of around 20 cargoes of liquefied natural gas (LNG) in the United States in June, four trade sources said on Wednesday, APA-Economics reports citing Reuters.
The cancellations came as the coronavirus pandemic dampened gas demand around the world, with gas and LNG prices tumbling to record lows.
The majority of the cargoes were cancelled from Cheniere Energy’s plants, Sabine Pass in Louisiana and Corpus Christi in Texas for June loading, the sources said.
One of them said 10 different companies cancelled a total of 17 cargoes from the Cheniere projects, with five from the Freeport plant in Texas. Another source confirmed that at least three companies cancelled Freeport cargoes.
It could not be immediately confirmed if Freeport cancellations are for June or May loading.
Cheniere said it would not comment on commercial discussions with its customers and added that its LNG contracts allow flexibility, including the option not to lift cargoes but pay a liquefaction fee.
Freeport LNG said it does not comment on its customers’ cargoes.
The companies that cancelled cargoes include energy majors, such as Royal Dutch Shell, Total and BP, several European buyers, such as Enel and Uniper and several Asian companies, two of the sources said.
Royal Dutch Shell, Enel and Uniper declined to comment, Total and BP did not immediately respond to Reuters requests for comment.
The coronavirus pandemic has pressured LNG buyers around the world as stocks were already full after two warm winters, with the global LNG market heavily oversupplied.
In Europe, the UK front-month contract fell below its U.S. counterpart this week for the first time in a decade due to falling energy demand owing to the coronavirus outbreak.
In Asia, prices are hovering close to $2 per million British thermal units (mmBtu) for June delivery, traders said on Wednesday, which is just around $0.10 per mmBtu above the price for gas on the U.S. Henry Hub, Refinitiv data shows.