US Becoming Net Exporter of Liquefied Natural Gas (LNG)

BE2C2 Report – During the last 13 consecutive months, US has exported more natural gas than it has imported.

This has been happening as the United States has been exporting natural gas by pipeline to both Canada and Mexico and increasingly exporting liquefied natural gas (LNG) to several other countries. Pakistan was one of the importers last year- it received two shipments of LNG from the US.

Starting only in February 2016, U.S. LNG has already reached 33 nations as President Trump that year announced US global energy supremacy coupled with his America First mantra.

Much of the recent growth is attributed to increased U.S. exports out of the Permian Basin in western Texas as new pipelines installed. Several existing pipeline expansions in southern Texas were completed during the past 12 months as well, increasing cross-border and inter-state shipment capacity.

The volume of U.S. LNG exports also rose steadily during 2018 as three new liquefaction units, called trains, entered service:

  • March: A single train at the Cove Point terminal in Maryland
  • November: Train 5 at the Sabine Pass terminal near the Louisiana-Texas border
  • December: Train 1 at the Corpus Christi terminal in southern Texas

Between November 2017 and November 2018, LNG export saw a 35% jump.

And this year, the US will pass Malaysia to become the world’s third largest LNG exporter (Australia could surpass Qatar to take the top spot). Mexico is now second to South Korea in LNG purchases from the U.S. China is third.

Total U.S. LNG exports (by ships) should surpass piped supplies to Mexico later this year, according to Forbes.

According to the Short-Term Energy Outlook (STEO) forecasts, the United States will become a net exporter of natural gas on an annual basis in 2019.

Energy-deprived India remains a prime target and is building out the infrastructure to import 9-12 Bcf/d of LNG over the next 10 years. The US and India are in strategic alliance with defense, counter-terrorism and commercial interests in South Asia region.

Although not as fast growing as China and India, Europe will remain a focus for U.S. natural gas shippers as well. Germany is set to have at least 2 LNG terminals. And in January, Northwest Europe offered the strongest netbacks to U.S. LNG sellers.

Cheniere Energy said in February it started producing liquefied natural gas for the first time at the Corpus Christi plant in Texas. It plans to fill up the tank with 43 million gallons of super-chilled LNG that’s slated to be shipped to gas-hungry countries like China — a rosy prospect unless trade tensions escalate between the world’s two biggest economies.

Russia though will remain stiff competition for the U.S. Both the Nord Stream 2 (Russia to Germany) and Turk Stream (Russia to Turkey) gas pipelines should be completed this year. In addition, the massive Power of Siberia gas pipeline connecting Russia to China is also set to be completed this year. Russia also has a grand LNG strategy countering the U.S. with Congress wanting to buffer Mr. Putin’s influence, said Forbes.

LNG exports enjoy bipartisan support in the US, therefore project approvals have been getting quicker.

Russia looks to finance, invest, sell LNG and related projects to Pakistan also with Crimea sanctions hurting its gas business in Europe.

(BE2C2 Report is a data journalism initiative of Irshad Salim Associates, a New Jersey, USA, based consulting firm in association with BE2C2 in Pakistan