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Cameron LNG restart uncertainty underpins price gains

  • Spanish Market: Natural gas
  • 08/09/20

Expectations in the market for when the currently shuttered 15mn t/yr Sempra-operated Cameron LNG facility in Hackberry, Louisiana in the US is likely to restart operations range from the end of this month to the end of October, with the uncertainty helping to underpin rising Asian spot prices.

But there has been no official guidance from the project, which is still seeking to "minimise impacts on... timeline for the re-start of Cameron LNG operations".

"We have begun the process of safely mobilising work crews and are in close contact with Entergy Louisiana, the waterworks district that serves Hackberry, and the Lake Charles Pilots regarding their restoration timelines, how we can assist their efforts, and how to minimise impacts on our timeline for the re-start of Cameron LNG operations," a spokesman at the facility said.

She did not comment on when the plant would resume operations or for how long loadings would be delayed as the firm does not comment on commercial arrangements with customers. She added that the preliminary assessment is that the Cameron LNG site is in "relatively good condition", subject to the firm's ongoing detailed examination of all the operational and safety systems and considering the extensive damage to the surrounding area.

Term offtakers at and co-owners in the Cameron facility include Mitsubishi, Mitsui and Total. These firms have supply agreements with Asian buyers including Taiwan's CPC, India's IOC, Japan's Jera, Kansai Electric, Tokyo Gas, Toho Gas and Tohoku Electric.

Feed gas flows to Cameron were still at zero on Friday. The US was closed for a public holiday on Monday.

Cameron's shutdown has added to combination of factors including uncertainty over production and shutdown schedule at Australia's 15.6mn t/yr Gorgon LNG facility and strength in European gas prices that have sent Asian spot prices higher over the past month. The front half-month ANEA price, the Argus assessment for spot LNG deliveries, has risen by around 71.5pc to $4.52/mn Btu onn7 September from $2.635/mn Btu on 3 August.

A few market participants including an offtaker at the facility expect that Cameron could restart within the end of this month.

"Originally it seemed like the restart timing would be mid-September but due to electricity problems this is extended," a trader with an offtaker said. "We believe (the restart will be) within this month or shorter. Sempra is eager for a restart and the state government has to restart the energy business as it is an essential service."

But others suggest that significant damage to power infrastructure across western Louisiana make a two-month timeline more likely, as a restart hinges on some amount of dredging work around the terminal and the reinstallation of power lines.

Entergy, western Louisiana's main power utility, said on 2 September that the hurricane had caused "catastrophic damages", which require "almost a complete rebuild of our transmission and distribution system that serves Calcasieu and Cameron parishes".

It said at the time that it had no specific estimate for restoring the higher-capacity lines needed to support industrial operations. Emergency services, hospitals, water departments and other essential services remained the priority, followed by powering up the areas that would supply the most customers at a time.

The Calcasieu waterway, which leads to the Cameron facility, is currently restricted to vessels with a draught of below 34-36 ft (10.3-11 metres). This means that most unladen LNG vessels would be able to access the waterway, given the typical draught of an unladen LNG tanker is around 9.5m.

But the draught would need to be higher to accommodate vessels, once laden. The US Coast Guard revised the access restrictions on Monday, following its notice on 1 September, which restricted access to Calcasieu waterway to vessels with a draught below 30 ft during daylight hours.

A few offtakers have already made arrangements, including buying spot cargoes, to replace cargoes lost as a result of the facility being off line since 26 August, a day before Hurricane Laura made landfall and battered the Louisiana-Texas coastline. Cargo cancellations at Cameron, the 5.75mn t/yr Cove Point and the 4mn t/yr Elba Island facilities were expected to total 5-6 in August, 1-4 in September and up to two cargoes in October.

Two of the plant's offtakers were actively seeking spot cargoes and had participated in supply tenders last week, which market participants suggested was likely to replace cargoes lost as a result of the delayed loadings with Cameron offline.

But there could still be more short-covering in store.

India's IOC issued two tenders on Monday to buy a total of two cargoes for delivery in late September and early October to the 5mn t/yr Ennore terminal in Chennai and the 17.5mn t/yr Dahej LNG import terminal in Gujarat, likely to replace a missed loading on 23-27 August at Cameron. IOC has a 700,000 t/yr fob supply agreement with Japan's Mitsubishi.

A Japanese utility that receives Cameron LNG cargoes issued a tender on Monday to buy an end-October cargo. The tender closes today. It is unclear if the cargo sought is to replace a lost loading from Cameron.


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13/01/25

AI may boom on gas power, then turn to nuclear

AI may boom on gas power, then turn to nuclear

New York, 13 January (Argus) — The first tranche of new US data centers coming on line this decade to run electricity-intensive artificial intelligence (AI) software will probably rely mostly on power generated by natural gas, while the nuclear renaissance hoped for by Big Tech comes later in the 2030s. Microsoft, Amazon, Facebook-parent Meta and Google-parent Alphabet want clean, reliable power as quickly as possible so they can be early movers in the development of AI, which is rapidly advancing and finding new user bases around the world. While these companies do not relish the optics of powering AI development with fossil fuels, gas-fired power is widely expected to fulfill most of the gap between current supply and future demand through at least 2030. Unlike wind and solar, gas can be relied upon for steady, baseload power, a necessary ingredient for always-on data centers. And crucially, unlike nuclear, gas-related infrastructure can be built out quickly. The most recent additions to the US nuclear fleet, Vogtle units 3 and 4 in Georgia, took 15 years to build and cost $30bn, double the expected time and cost. A few decommissioned nuclear reactors can be restarted, as Microsoft is paying to do with a unit of Three Mile Island in Pennsylvania. But this low-hanging fruit will be quickly exhausted. Questions around the meter While there is broad agreement that gas will power the AI data center boom through at least 2030, questions remain about what this rapid gas-fired power build-out will look like. Data center operators can secure power in two ways: wade through the long, arduous interconnection process through which new customers connect to the grid, or bypass the grid altogether and secure their own personal electricity supply through so-called "behind-the-meter" agreements. Many in the gas industry are betting tech companies' need for speed will force them to opt for the latter. "The data centers are not going to wait," Alan Armstrong, chief executive of Williams, the largest US gas pipeline company, told Argus in an interview. "They are going to go to states that allow you to go behind the meter." In this scenario, construction of an AI data center in a state like Louisiana, for instance, might accompany construction of a new intrastate pipeline connecting the state's prolific Haynesville gas field with a new gas-fired power plant. Intrastate pipelines bypass the federal oversight triggered by interstate pipeline construction, and new gas power plants only take 2-3 years to build, East Daley Analytics analyst Zachary Krause told Argus . Most of the incremental power needed to run AI data centers this decade will be generated by new gas plants, Krause said. Even ExxonMobil in December said it was in talks to provide "fully islanded" gas-fired power to AI data centers. It claimed it could even capture 90pc of the CO2 emissions from power generation, appeasing tech companies' climate ambitions. ExxonMobil's non-grid gas generation fleet is "independent of utility timelines, so they can be installed at a pace that other alternatives — including US nuclear — just can't match," ExxonMobil chief financial officer Kathy Mikells said. But connecting to the grid may offer better reliability and economics than behind-the-meter gas power. If an off-grid gas generator trips off line, for instance, an always-on data center without back-up generation depending on that facility would be in trouble. Grid connection also allows generators to sell excess power into the grid. For those reasons, most new data centers this decade will rely on the grid as their primary power source, Adam Robinson, research associate at consultancy Enverus, told Argus . Small modular future But if the 2020s become the decade of gas-powered AI, the 2030s may be when nuclear-powered AI gets its due. The long-awaited nuclear renaissance may come not from conventional reactors, but from next-generation small modular reactors (SMRs), which can theoretically be built much faster and cheaper. No US SMRs yet exist, but given the number of SMR start-ups with expected start dates before 2030, and money pouring into the sector from the likes of Google and Microsoft, at least one of these next-generation reactors should be operating by 2030, Adam Stein, director of nuclear energy innovation at research center Breakthrough Institute, told Argus . SMRs' smaller price tag relative to conventional 1 GW nuclear reactors may also accelerate their adoption, Stein said. "Not every utility needs a GW-scale plant of any kind, but they might need a 300 or 600MW plant," he said. "So the total addressable market is larger for SMRs." By Julian Hast Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US issues 45Z tax guidance for low-carbon fuels


10/01/25
10/01/25

US issues 45Z tax guidance for low-carbon fuels

Washington, 10 January (Argus) — US producers of low-carbon fuels can start claiming the "45Z" tax credit providing up to $1/USG for road use and $1.75/USG for aviation, following the US Treasury Department's release today of proposed guidance for the credit. The guidance includes proposed regulations and other tools to determine the eligibility of fuels for the 45Z tax credit, which was created by the Inflation Reduction Act to replace a suite of incentives for biofuels that expired at the end of last year. Biofuel producers have been clamoring for guidance from the US Treasury Department so they can start claiming the tax credit, which is available for fuels produced from 1 January 2025 through the end of 2027. "This guidance will help put America on the cutting-edge of future innovation in aviation and renewable fuel while also lowering transportation costs for consumers," US deputy treasury secretary Wally Adeymo said. "Decarbonizing transportation and lowering costs is a win-win for America." The creation of the 45Z tax credit has already prompted a change in US biofuels markets by shifting federal subsidies from blenders to producers. Because the value of tax credit increases for fuels with the lowest lifecycle greenhouse gas (GHG) emissions, it could encourage refiners to source more waste feedstocks such as used cooking oil, rather than conventional crop-based feedstocks. While the guidance is still just a proposal, taxpayers are able to "immediately" use the guidance to claim the 45Z tax credit, until Treasury issues additional guidance, an administration official said. The guidance on 45Z released today affirms that only the producer for the fuel is eligible to claim the credit, not blenders. To be eligible for the tax credit, the fuel must have a "practical or commercial fitness for use in a highway vehicle or aircraft" by itself or when blended into a mixture, Treasury said. Marine diesel and methanol suitable for highway or aircraft use are also eligible for 45Z, as is renewable natural gas that can be used as a transportation fuel. Treasury also released an "annual emissions rate table" offering providers a methodology for determining the lifecycle GHG of fuel. Treasury said a key emissions model from the US Department of Energy, called 45ZCF-GREET, used to calculate the value of the 45Z tax credit is anticipated to be released today, although industry officials said it may be delayed until next week. Treasury said it intends to propose regulations at "a future date" for calculating the GHG emissions benefits of "climate smart agriculture" practices for "cultivating domestic corn, soybeans, and sorghum as feedstocks" for fuel. Those regulations could lower the calculated lifecycle emissions of fuel from those crop-based feedstocks and increase the relative 45Z tax credit. US biofuel producers said they are still awaiting key details on the 45Z tax credit, including the update to the GREET model. Among the outstanding questions is if the guidance released today provides "enough certainty to negotiate feedstock and fuel offtake agreements going forward", said the Clean Fuels America Alliance, an industry group that represents the biodiesel, renewable diesel and sustainable aviation fuel industries. It is unclear how president-elect Donald Trump intends to approach this proposed approach for the 45Z credit, which will be subject to a 90-day public comment period. Trump has promised to "rescind all unspent funds" from the Inflation Reduction Act. But outright repealing 45Z would leave biofuels producers and farmers without a subsidy they say is needed to sustain growth, after the expiration last year of a $1/USG blender tax credit and a tax credit of up to $1.75/USG for sustainable aviation fuel. Biofuel and soybean groups were unsuccessful in a push last year to extend the expiring biofuel tax credits. The 45Z credit is likely to be debated in Congress this year, as Republicans consider repealing parts of the Inflation Reduction Act. House Republicans have already asked for input on revisions to the 45Z credit, signaling they could modify the incentive. In a tightly divided Congress, farm-state lawmakers may hold enough leverage to ensure some type of biofuel incentive — and potentially one friendlier to agricultural producers than 45Z — survives. By Chris Knight and Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Finnish and Baltic gas consumption up by 9pc in 2024


10/01/25
10/01/25

Finnish and Baltic gas consumption up by 9pc in 2024

London, 10 January (Argus) — Combined Finnish and Baltic gas consumption rose by 9pc on the year in 2024, with demand higher in all four countries and Lithuania leading the increase. Consumption across Lithuania, Latvia, Estonia and Finland totalled roughly 43.6TWh in 2024, up from 40TWh in both 2022 and 2023 but still well below the 2019-21 average of 67.2 TWh/yr ( see combined consumption graph, data and download ). Demand increased across all four countries, but Lithuanian consumption rose the most in both absolute and percentage terms, jumping by 14pc on the year to nearly 17.1TWh. This was mostly driven by higher demand from fertiliser producer Achema and gas-fired power generators, transmission system operator Amber Grid's commercial director, Justas Cerniauskas, said. Achema, the region's single largest gas user, increased its consumption by roughly 1TWh on the year, while power-sector gas demand rose by around 600GWh, Cerniauskas said. Large consumers with direct connections to the grid consumed 9.8TWh last year, according to Amber Grid data, up from 8.4TWh a year earlier, while demand from the local distribution zone increased by a more moderate 600GWh. Lithuanian gas-fired power generation totalled around 820GWh, compared with 640GWh in 2023, data from Fraunhofer ISE show. In Finland, gas-fired power production fell to 1.2TWh from 1.8TWh in 2023, as much stronger renewable output reduced gas' share of the generation mix. Renewable generation rose to 40.8TWh from 34.6TWh, with onshore wind accounting for almost the entire increase. Total Finnish gas demand rose by nearly 5pc on the year to just over 14TWh, despite the fall in gas-fired generation. Given that household demand accounts for a small part of overall consumption owing to the predominance of electric and district heating in Finland, this suggests that industrial demand continued its recovery. The paper and paper products sector is Finland's most gas-intensive, and appears to have performed better than in 2023 — output on a 2021 basis of 100 averaged 87.5 in January-October compared with 82.6 in all of 2023, data from Eurostat show. In Latvia, the main demand driver is the power sector, particularly state-owned utility Latvenergo's large combined heat and power plants. Latvian gas-fired power generation rose by nearly 19pc on the year to 1.6TWh, as weaker hydro generation left more room in the mix for gas. In Estonia, the region's smallest consumer, gas demand rose by more than 8pc on the year to 3.7TWh. Total gas-fired power generation across the four countries fell to 3.68TWh from 3.84TWh in 2023 ( see table ). Combined sendout from the Inkoo, Hamina and Klaipeda LNG terminals totalled 43.4TWh last year, compared with 47TWh in 2023 and 32.4TWh in 2022 ( see data and download ). A six week dry-docking period for the Klaipeda floating storage and regasification unit (FSRU) weighed on sendout in Lithuania, which was down by around 8TWh. Conversely, a long shutdown on the Balticconnector increased the call on Finland's Inkoo terminal to fill the supply shortfall in the first quarter. Sendout from Inkoo rose to 19.3TWh last year from 14.3TWh in 2023. This pattern is likely to flip in 2025, with Inkoo's Exemplar FSRU due to undergo its own six week dry-docking, which in combination with extensive maintenance on the Balticconnector has left only slightly more than half the year's slots booked . This is likely to increase the usage of Klaipeda, where slots for 2025 are nearly fully booked . There were net withdrawals from Latvia's Incukalns storage facility of 1.54TWh in the 2024 calendar year, flipped from net injections of 6.6TWh in 2023, and compared with 776GWh of withdrawals in 2022. Nearly 4.4TWh of gas was rolled over from the 2023-24 storage year into the next. By Brendan A'Hearn Total annual gas-fired power generation GWh 2021 2022 2023 2024 Finland 4,170 1,790 1,810 1,230 Lithuania 1,110 500 640 820 Latvia 1,820 1,100 1,350 1,600 Estonia 20 30 40 30 Total 7,120 3,420 3,840 3,680 — Fraunhofer ISE Numbers rounded to nearest 10 Annual gas demand by country GWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US added 256,000 jobs in December


10/01/25
10/01/25

US added 256,000 jobs in December

Houston, 10 January (Argus) — The US added 256,000 nonfarm jobs in December, reflecting a robust labor market that may prompt the Federal Reserve to keep borrowing costs higher for longer. Analysts had expected gains of about 160,000 jobs for December. The gains last month followed 212,000 more jobs in November, which were downwardly revised by 15,000, the Labor Department said Friday. Job gains in October were revised up by 7,000 to 43,000 jobs. The CME's FedWatch tool today showed 97.3pc probability Fed policy makers will keep the target lending rate unchanged at 4.25-4.5pc at the next Fed meeting at the end of the month, up from 93.6pc on Thursday. FedWatch shows nearly 60pc probability of no change through the May meeting, up from about 45pc Thursday. Unemployment edged down to 4.1pc in December from 4.2pc the prior month. Payroll employment gains averaged 186,000/month in 2024, for total gains of 2.2mn jobs. That was down from 251,000 jobs/month in 2023, for total gains of 3mn jobs that year. Health care added 46,000 jobs in December, retail trade added 43,000 jobs, government jobs rose by 33,000, social assistance increased by 23,000, and leisure and hospitality added 43,000 jobs. Construction added 8,000 jobs in December. Manufacturing lost 13,000 jobs and mining and logging lost 3,000 jobs. Transportation and warehousing jobs grew by 9,600. Average hourly earnings grew by an annual 3.9pc following 4pc growth in November. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's ACCC sees gas surplus for eastern states


10/01/25
10/01/25

Australia's ACCC sees gas surplus for eastern states

Sydney, 10 January (Argus) — Tight gas supply eased in Australia's eastern states during 2024, with a surplus higher than previously anticipated likely this year, according to the Australian Competition and Consumer Commission (ACCC). The ACCC's Gas Inquiry December 2024 interim report anticipates a 77-112PJ (2.1bn-3bn m³) surplus, driven by larger than expected supply from Queensland state's coal-bed methane projects. The projections show a surplus in each quarter of 2025, including in the peak-demand winter months, if LNG projects export all their available uncontracted gas. This compared with the ACCC's September report which showed a possible July-September shortfall. But a 16PJ supply gap is predicted for the southern states of South Australia, Victoria and New South Wales (NSW), which will need to be managed with careful usage of storage. But this does not account for the 2,880MW Eraring coal-fired generator's lifetime extension , which will reduce gas-fired power demand in 2025, the report said. The ACCC is predicting a supply of 1,982PJ in 2025, higher than 1,946PJ in its July report, with demand at 1,871PJ compared to 1,836PJ previously. The exact surplus figure depends on the export quantities from the LNG projects based at Gladstone, with 77PJ of surplus if projects export all their presently uncontracted gas. Gas will need to be transported south from Queensland as usual in the winter months, the ACCC said, with about 9pc of customer demand to be unmet. The 26PJ Iona gas storage site in Victoria held 16.06PJ on 2 January, up from 15.11PJ a week earlier on 26 December, with the ACCC recommending at least 25PJ to be stored before May to maximise levels ahead of winter. The improved outlook reflects Australia's growing coalbed methane output, with production reaching a new monthly high of 3.57bn m³ in August, according to Australian Petroleum Statistics. An average of 3.49bn m³/month was supplied in the first 10 months of 2024, or 26pc of Australia's total average monthly gas production of 13.51bn m³. This compared to 25pc of the total in 2023 and 24pc in 2022. Domestic gas prices have softened, the report said, because of higher supply and lower global prices but remain above historical levels. Offers from producers for 2025 supply fell by 1.8pc from the previous six months to A$14.77/GJ ($9.15/GJ) in the first half of 2024, while bids fell by 6.6pc to A$13.48/GJ. By Tom Major Australian gas prices (A$/GJ) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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