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Novatek CFO: US LNG could serve as market balancing factor into early September

Novatek CFO: US LNG could serve as market balancing factor into early September

London, June 25 - Neftegaz.RU. According to S&P Global Platts, US LNG could continue to act as a gas market balancer into early September, Novatek CFO Mark Gyetvay said June 25, with cargoes still being canceled due to weak market fundamentals.

Speaking at Renaissance Capital's virtual investor conference, Gyetvay said the trend for summer US LNG cargo cancellations could repeat in 2021.

Dozens of US LNG cargoes have been canceled in recent months, with around 45 cargoes expected to be canceled in both July and August, according to trading sources.

Some 35 or more cargoes are expected to have been canceled for June, with the loss of US LNG helping to shore up gas prices in both Europe and Asia.

"The US will serve as a balancing factor throughout the summer months, and maybe into early September," Gyetvay said. He said this could then be followed by a "normalized" winter, with trend then potentially repeating itself in 2021.

Gyetvay said Novatek - which started up its flagship 16.5 million mt/year Yamal LNG plant in northern Russia in December 2017 - had been able to withstand the period of low prices given its low cost of production.

"We're OK during a period of low prices. As a low-cost producer we are able to survive these stress periods," he said.

Novatek also plans to start up its second major LNG project, the 19.8 million mt/year Arctic LNG 2 facility, in 2023, and is also working to bring the planned 5 million mt/year Obskiy LNG project online in 2024.

It has also lined up 2 more LNG production projects - Arctic LNG 1 and Arctic LNG 3.