Analyzing of the US LNG suppliers - offtakers businesses under tooling agreements shows that the US LNG shut-in(s) is not imminent, Mostafa Sharif * said in a post published on Linkedin last week. He has reviewed the available options for a US LNG off-taker who has a tolling agreement with a US LNG producer (e.g. Cheniere Energy).

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Assumptions:

TTF: $3.75/MMBTU
Feedgas (HH): $1.85/MMBTU
Liquefaction Tolling Fee (LTF): $3/MMBTU
Shipping & Regasification (SR): $1.25/MMBTU (from US Gulf to NWE)

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Given the above mentioned assumptions which selected in accordance with the current market’s situation, the off-taker’s options (whether it takes US LNG cargo for exporting to Europe) will be summarized as follows:
If cargo taken (option-1), the off-taker has to pay: take-or-pay LTF plus variable costs (Feedgas & SR).
$3 (LTF) + $2.13 (115% HH) + $1.25 (SR) = $6.38 vs. 3.75 (TTF) so the off-taker loses $2.63/MMBTU, though if it had not taken the cargo (option-2), it has to pay: $3 (LTF).
Therefore, the off-taker has no option but to take the cargo for just reducing its loss. However, if TTF will be more depreciated in summer and reached less than $3.5/MMBTU, it would stop off taking the cargoes.
Meanwhile, the following graph indicates that even if TTF price crushed to about $2/MMBTU, the US LNG supplier (e.g. Cheniere) itself could sell the un-taken cargoes in sport market and gain money from this business. In fact, LTF - paid by the off-taker for un-taken cargo subsidize Chenier’s business.

Goldman Sachs has recently said in a report that even if there were cancellation requests, it believes that Cheniere Marketing itself could export those cargoes as they face better economics than the off-takers from its liquefaction facilities.
In theory, when there is no adequate demand, suppliers should reduce supply to rebalance the market, but there is an exception, US LNG.

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Note:
* Mostafa Sharif is Gas Market Senior Advisor and also Distinguish Associate with Global LNG Info.

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Source(s)