Venture Global’s court win against Shell, Cheniere’s progress on a new LNG train and NextDecade’s funding for an imminent FID capped an eventful week for US LNG.

“Venture Global’s court ruling has no bearing on the wider US LNG industry, but it’s a major win for the company, allowing them to avoid a potential $1.6 billion penalty and move ahead with future projects from a stronger position.

The ruling was narrowly focused on whether VG was permitted to sell commissioning cargoes from its Calcasieu Pass facility on the spot market instead of under long-term contracts and could foreshadow other ongoing arbitration proceedings.

It will likely prompt LNG producers and offtakers to pay closer attention to the fine print in their contracts going forward.

Market participants will also be watching macroeconomic factors, including heatwaves moving from Europe into Asia and the upcoming talks between Trump and Putin, though much remains uncertain.

For now, fundamentals don’t appear to be significantly disturbed.”


Short-term market fundamentals softened week-on-week, with prices slipping across the board.
Heatwaves remain the biggest short-term price driver, shifting from Europe to parts of Asia, including Japan, next week.
The planned meeting between US President Trump and Russian President Vladimir Putin may prove inconsequential, but it could disrupt this summer’s steady pace. 

US
Front-month prices at the Henry Hub lost 6.7% week-on-week over weak fundamentals and high storage levels, closing at $2.81 per million British thermal units (MMBtu) on 12 August.
In the week ending 6 August, net imports from Canada collapsed by 17.5% week-on-week, resulting in a total supply decrease of 1.1%. However, demand receded by 9.9% in the same period, as milder weather weakened gas-for-power (-15.7%) and building demand (-5.2%) most. 

Despite the stark demand reduction, the market balance and thus storage injections tightened as feedgas demand gained 6.6% on the back of Freeport LNG and Plaquemines LNG, which averaged more than 3 billion cubic feet per day (Bcfd) for the first time. The moderate injection of 7 Bcf raised total inventories to 3,130 Bcf as of 1 August, 173 Bcf (6%) higher than the five-year average. 

While US LNG market fundamentals were largely unchanged, it was an action-packed last week for the sector’s infrastructure players. The US’ second-largest LNG producer, Venture Global, avoided a penalty of up to $1.6 billion by winning its arbitration case against Shell. Long-term offtakers Shell, BP and Orlen had sued Venture Global over the prolonged commissioning process at its Calcasieu Pass facility, during which Venture Global profited by selling cargoes on the war-shaken LNG spot market rather than to its contractual counterparts. 

While other cases are still pending, the decision elevated Venture Global’s stock price. Meanwhile, Cheniere Energy informed the Texas Commission on Environmental Quality (TCEQ) that commissioning works had started at Corpus Christi Stage 3 train 3 on 11 August.

Assuming the same rate of progression as trains 1 and 2, first LNG could be produced in November 2025.
A third major player, NextDecade, secured $1.8 billion in equity commitments for the planned Rio Grande train 4 from TotalEnergies and Global Infrastructure Partners in exchange for a total 60% stake.
NextDecade is targeting an FID in September and the funding further bolsters the already bright sanctioning prospects. 

Further down the LNG value chain, Excelerate Energy disclosed its purchase of the 145,000 cubic meter LNG carrier (LNGC) Methane Alison Victoria from GasLog Partners.
Renamed Excelerate Shenandoah, the 2007-built vessel will initially be used as LNGC in the Atlantic basin but is also a strong candidate for conversion into a floating storage and regasification unit (FSRU). 

Heading north, Canadian producers pulled back uneconomic dry gas production amid the lowest prices in four decades.

However, prices are expected to recover as the 14-million tonnes per annum (tpa) LNG Canada phase 1 continues its ramp up.
Down South, Argentina’s Southern Energy – a consortium consisting of Pan American Energy, YPF, Pampa Energia, Harbour Energy, and Golar LNG – rounded out its 5.95-million tpa LNG project in the San Matias Gulf by taking an FID on the charter a second FLNG unit, the 3.5-million tpa Mark II.

Deployment is targeted from 2028 and interestingly the charter with minority stakeholder Golar LNG includes a dynamic tariff component if the sales price exceeds $8 per MMBtu. The upcoming meeting between Trump and Putin looms, set to take place in Alaska on 15 August.

Ukrainian President Volodymyr Zelensky and European leaders, neither of whom will be present at the negotiations, have objected to a deal ceding territory to Russia. 

Europe
Central Europe was initially expecting a heatwave that could have seen as much as 7.7 gigawatt (GW) removed from France’s national grid due to water being too hot to be used for cooling.
Despite temperature forecasts being revised down, a swarm of jellyfish stepped in to shut down the remaining 3.6 MW of France’s Gravelines nuclear plant.
Going forward, temperatures in Central Europe are expected to be slightly below last year’s levels between 13 and 26 August. Front-month prices at the Dutch Title Transfer Facility (TTF) were unimpressed, stagnating at $11.38 per MMBtu.The LNG sendout from European Union (EU) terminals recently slowed to 3.2 terawatt-hours (TWh) per day month-to-date, significantly higher than the 2.3 TWh per day recorded during the first 11 days of August 2024.

Meanwhile, Norwegian pipeline flows to Europe fell by 6.9% to 315.9 million cubic meters per day (MMcmd), driven by slowing deliveries to the UK.EU storage levels climbed to 72.5%, narrowing the gap to 15.4 percentage points year-on-year.

Despite the European Parliament’s motion to lower the EU storage target to 83%, the European Council had the last word, deciding to maintain the binding 90% target, albeit with additional flexibility.
The target can be reached at any point between 1 October and 1 December and a 10% flexibility has been introduced “in case of difficult conditions in filling the storages”, with another 5% in the face of “persistent unfavorable market conditions”.

We previously considered an 83% storage target and will adjust our outlook accordingly.Egypt is equally worried about security of supply and signed an extension to an existing pipeline import contract with Israel on top of its aggressive regasification ramp-up.

The entire deal now encompasses about 130 billion cubic meters to be delivered through to 2040.
Off Greece, the Alexandroupolis LNG import terminal resumed operations on 11 August, after being offline for for maintenance since January.
The terminal will operate at 25% capacity until October.

Asia
Front-month prices for LNG deliveries to Northeast Asia retracted by 1.4% to $11.74 per MMBtu on 13 August.
Japan has avoided extreme heatwaves through the mid-August holiday season, allowing major Japanese power utilities’ inventories to recover by 1.6% to 1.96 million tonnes (Mt).
However, temperature forecasts for 16-22 August point to above-average temperatures for most regions in Japan with a probability of 70-80%.Despite another impending heatwave, LNG consumption might be reduced by unplanned outages in Japanese utility Jera’s combined cycle gas turbine (CCGT) fleet.

The 500-megawatt (MW) Kawasaki unit 1-3 went offline on 9 August with no planned restart date, based on the latest information as of 13 August.

A persisting outage could lower Jera’s LNG demand by 30,000 tonnes for the rest of August and another 40,000 tonnes if it remains offline for the whole of September.

In Japan’s Chubu area, Jera’s 243-MW Shin-Nagoya power station unit 7-1 went offline on 11 August due to gas turbine issues with the utility aiming to restart on 13 August.In South Korea, the 950-MW Kori nuclear power plant unit 4 went offline on 6 August, reducing the number of online nuclear units by eight on 13 August.

This means 7.65-gigawatts (GW) of nuclear capacity is offline, bringing down the available capacity to 18.4 GW on 12 August compared to the country’s total nameplate capacity of 26 GW.
Reduced nuclear capacity places more importance on South Korea’s gas-fired fleet.After imposing a 25% tariff on US imports from India, Trump signed an executive order to double the rate to 50% over India’s purchases of Russian oil.

However, the additional tariff is only set to enter into force on 27 August, leaving two weeks to avert the escalation.