By Scott DiSavino
NEW YORK (Reuters) - The amount of natural gas flowing on pipelines to U.S. liquefied natural gas export plants is at its lowest levels since August, a signal of weak worldwide demand due to government lockdowns to repress the coronavirus.
Worldwide gas prices have plunged to record lows in Europe and Asia as lockdowns squeeze demand. Consumption of liquefied natural gas (LNG) has remained stronger than gasoline demand as LNG is used for power generation, but the cash crunch hitting the global economy has cut demand.
The amount of gas flowing to U.S. LNG plants was on track to fall to a nine-month low of 4.3 billion cubic feet per day (bcfd), data provider Refinitiv said in a preliminary report Monday that may be revised on Tuesday.
U.S. gas at the Henry Hub <0#NG:> in Louisiana has traded higher than European benchmarks <0#TRNLTTF:> <0#TRGBNBP:> since the end of April and was expected to remain more expensive through September.
Most of the feedgas decline was at Cheniere Energy Inc 's (A:LNG) export plants at Sabine Pass in Louisiana and Corpus Christi in Texas. Cheniere said it does not comment on operations.
Analysts said U.S. LNG feedgas has declined due to the recent wave of cargo cancellations around the globe, after hitting a record in February before most government-imposed lockdowns.
Buyers in Asia and Europe have already canceled over 20 U.S. LNG cargoes for both June and July, and more cancellations are anticipated.
Analysts at Energy Aspects said they expect around 125 U.S. cargoes to be shut-in this summer, potentially slashing LNG deliveries to Europe by up to 424 billion cubic feet compared to what was expected at the start of the summer.