European and Asian natural gas prices fell Monday as supply constraints eased, mainly at Freeport LNG on the upper Texas coast, which has restarted one of its three trains.
Feed gas flows to the facility ticked upward over the weekend and were nominated Monday at nearly 800 MMcf/d, or their highest level in three weeks. The gains pushed overall U.S. feed gas flows to 12.7 Bcf/d on Monday, up from 12.2 Bcf/d over the past week, according to Wood Mackenzie estimates.
Freeport's third train has mostly been offline since January after freezing temperatures caused electrical issues that needed repairs. It went offline again last week just days after restarting. The facility's other two trains are undergoing similar work and feed gas flows have been near zero in recent weeks.
The climb in feed gas flows on Monday indicates a train has restarted. The Wilforce, an LNG tanker, was also docked at Freeport as the week got underway, Kpler vessel-tracking data shows.
As the facility ramped back up, the prompt Dutch Title Transfer Facility (TTF) fell another 3% on Monday, when it slipped below $9/MMBtu. TTF closed lower last Friday too, when a gas leak at the Hammerfest liquefied natural gas export terminal in Norway was resolved.
Temperatures have also warmed up on the continent after widespread cold last week. Moreover, steady wind output is helping to offset lower production from Norway. Heavy maintenance offshore has cut into Norwegian natural gas exports by about 20%.
Storage inventories on the continent are at record highs for this time of year. They’re at 62% of capacity, compared with the five-year average of 46%.
Freeport’s return also stifled the Japan-Korea Marker, which dipped below $9 Monday as the supply outlook improved.
Lower spot prices in the region, along with a severe heatwave in Southeast Asia, were supporting spot buying. Temperatures were so high in the Philippines on Monday that classes at public schools were canceled across the country.
Bangladesh, India and Vietnam all have open tenders for prompt cargoes that close this week to help with the power crunch, according to Kpler data.
Stronger demand from Freeport also boosted U.S. natural gas prices, along with weaker domestic gas production. Henry Hub gained 11 cents to finish at $2.03/MMBtu on Monday.
“An uptick in Freeport LNG feed gas over the weekend may signal recovery from a near-complete outage over the past three weeks,” said EBW Analytics Group analyst Eli Rubin. “Dry gas supply readings continue to flirt with new lows absent relief” from pipeline maintenance impacting volumes out of the Permian and Appalachian basins.
Wood Mackenzie estimated U.S. gas production at 97.5 Bcf/d on Monday, just below the seven-day average of 98 Bcf/d.
Total Lower 48 storage climbed to 2,425 Bcf for the week ending April 19, with stockpiles sitting 655 Bcf above the five-year average, according to the U.S. Energy Information Administration. Forecasts suggest upcoming weather would do little to bring down that inventory buffer.
Weather models saw mixed trends over the weekend but continued to suggest lighter than normal demand for natural gas through most of the 15-day forecast period, according to NatGasWeather.
In other news on Monday, BP plc signed an agreement to supply Korea Gas Corp. with 9.8 million tons (Mt) of LNG over an 11-year period. Deliveries are scheduled to start in mid-2026.
The Egyptian government also announced that it would suspend LNG exports from May onwards to help conserve gas supplies and stave off blackouts this summer. Domestic gas production has been declining in the country, forcing it to reduce exports.
The country suspended LNG production for most of the summer last year and resumed it in the fall. Egypt’s LNG exports dropped to 3.4 Mt in 2023, compared with 7.14 Mt in 2022. They’ve also declined year-to-date to 0.53 Mt, compared to 2.39 Mt over the same time in 2023.
