The startup in February this year of US LNG exports based on cheap American shale gas had been expected to see a good proportion of cargoes heading across the Atlantic to Europe given the relatively short shipping route and Europe's massively underused LNG import capacity.
But with European gas prices staying stubbornly low for most of the year and the margins for US LNG having been largely eroded due to the slump in global LNG prices, in the end only a handful of cargoes ended up in Europe.
As 2016 nears its end, more than 50 cargoes have left the Cheniere Energy-operated Sabine Pass terminal in the Gulf of Mexico for international markets.
But of those cargoes, just three landed in mainland Europe -- one in Portugal, one in Spain and one in Italy -- while another two shipments were made to Turkey.
According to industry sources, the two to the Iberian Peninsula were considered to be "test" cargoes given that they were not followed up by any new cargoes, while the shipment to Italy was seemingly a one-off as it was procured by Uniper to meet its obligations under the country's "peak-shaving" tender program.
Italy's economy ministry holds tenders several times a year for companies to provide gas that can be used during periods of unexpected peak demand.
Uniper won Italy's latest peak-shaving tender held in October and opted to supply 105,000 cu m of LNG (63 million cu m of gas) from Sabine Pass to be stored "until needed" at the Toscana FSRU off the coast of Livorno. NORTHWEST EUROPE
So the evidence so far suggests that southern Europe has been able to attract some US LNG -- though in limited volume -- but the appeal of US LNG in northwest Europe has yet to emerge where competition from pipeline suppliers Norway and Russia is fierce.
Gazprom has repeatedly dismissed the economic viability of US LNG in Europe given the current low European gas prices and its own low production costs.
Buyers in northwest Europe have reportedly told Cheniere that they do not have any need for now for US LNG given the abundance of pipeline gas.
The response to US LNG exports starting up from Europe's traditional pipeline suppliers has been clear -- Russia, Norway and Algeria are all supplying consistently high volumes to Europe.
Russian exports to Europe and Turkey (minus the countries of the former Soviet Union) are set to hit an all-time high of 180 Bcm this year, while Norway's supplies to Europe will come in at around the record of 115 Bcm set in 2015.
Norway has been targeting its sales on the Netherlands and UK, and is not trying so much to compete with Russia in Germany. Norway's sales to the Netherlands and UK are way up in 2016 compared with the previous year, but slightly down to Germany. ASIA OPENING UP
The majority of cargoes of US LNG shipped in 2016 went to American neighbors in Chile, Mexico and Brazil. This was not a surprise -- Cheniere itself conceded that it made sense for the LNG to remain closer to home given the narrow margins.
Things have evolved again though since the Sabine Pass plant reopened in late October after a month of maintenance, as Asian LNG prices jumped sharply on a surprise lack of supply amid higher demand and several trips at liquefaction plants including Gorgon in Australia.
As a result, a number of cargoes are now headed for Asia to make the most of the higher spot prices.
Two shipments have been delivered to China so far, while a first cargo is due to land in South Korea at the weekend.
Eight other US LNG cargoes from Sabine Pass are currently headed for Asia having traversed the Panama Canal in mid-December.
Platts assessed the JKM LNG Asian benchmark price at $9.20/MMBtu on Thursday.
That is a considerable jump from prices as low as $4/MMBtu in the summer of 2016.
