3 years ago there was speculation at what price level US liquefaction Plants would switch off as it’s not enough to cover costs. I argued that pretty much everything is sunk cost and that switching a liquefaction train off is not done on the whim of a trader. So not on liquefaction cost but also transport and even the receiving terminal are sunk cost. The LNG producers play for the market to recover and make a winning on Asia again in the near future and they still might. LNG is flexible and can go where prices are best. Europe is the sink. And it works so well because there is plenty of pipeline gas to around supporting the LNG business model. But its a hard one for pipeline gas as it suffers anything that happens in Europe without the upside of cargo diversion when things are good.
Dutch gas prices hit 10-year lows this week, reflecting high European inventories swelled by liquefied natural gas (LNG) imports, testing levels at which companies that committed to buy U.S. LNG will start making serious losses.