EIA: US LNG exports quadrupled in 2017

Increases in the use of natural gas for power generation and spot-purchases from China drove the growth.

The US Energy Information Administration (EIA) is reporting that exports from the states reached 1.94 billion cubic feet per day (Bcf/d) last year, up from 0.5 Bcf/d in 2016. All of these exports originated from Cheniere Energy’s Sabine Pass terminal in Louisiana, more than half of them heading to Mexico, China and South Korea.

According to the agency, LNG exported to Mexico accounts for 20% of the US’s total, demand stemming primarily from power plants and delays in the construction additional of export pipelines. Demand from Asia stemmed from differences in LNG price indexing between it and the US: the US using the Henry Hub natural gas price and Asia using the price of crude oil. Exports to South Korea made up 18% of the US’ LNG exports, China making up 15%.

China became the world’s second largest LNG importer in 2017 (behind Japan) following the introduction of policies designed to shift electricity generation from coal to natural gas and to encourage the replacement of household coal-fired boilers with gas-fired equivalents. This increase in demand forced China to get supply on the spot market in addition to their contracted volumes.

Two LNG export facilities are currently operational in the US: Cheniere Energy’s Sabine Pass terminal and Dominion Energy’s Cover Point in Maryland. Cove Point exported its first cargo in early March 2018.

Four more US LNG projects are scheduled to begin operation in the next four years. Once completed, the US’ LNG export capacity is anticipated to reach 9.6 billion cubic feet per day by the end of 2019. The EIA projects that, as exports from these facilities grow, America will become the world’s third largest LNG exporter (behind Australia and Qatar).

See the original EIA post here.