The US is poised to reclaim the crown as the world’s largest LNG exporter

The fire in June sidelined Freeport LNG, the US’s second-largest export facility, and cut US exports of the fuel by about 2 billion cubic feet per day (bcfd). The outage pushed the US behind its biggest exporter, Australia, while global demand for the fuel rose sharply.

In 2022, U.S. natural gas exports as LNG are projected to increase 8% to 10.6 bcfd, slightly below Australia’s 10.7 bcfd. According to data provider Refinitiv, the US is ahead of Qatar, which is in third place at 10.5 bcfd.

The exports are necessary to rebuild Europe’s gas supply after supplies were disrupted following Russia’s invasion of Ukraine in February. As Russian supplies to Europe have been largely halted, US supplies will be critical this year.

In 2021, the U.S. ranked third in exports behind Australia and Qatar, which sold 10.5 bcft and 10.1 bcfd of gas as LNG, respectively, but took over the top spot in 2022 with the start-up of Venture Global LNG’s Calcasieu Pass installation. Louisiana earlier that year.

Crown in sight

However, the US lost its chance to claim the crown as the top exporter in 2022 when it lost Freeport LNG supplies in the middle of the year. Freeport LNG expects to resume processing in the second half of January, pending regulatory approval, which would shift the production balance in favor of the United States.

Analysts expect their production in 2023 to be about the same as in 2022, as Australia will not start new LNG installations until 2026 and 2025.

The next major US LNG export facilities expected to come on stream are QatarEnergy/Exxon Mobil Corp’s 2.4-bcfd Golden Pass facility in Texas and Venture Global’s 1.8-bcfd Plaquemines facility in Louisiana, with first deliveries expected in 2024.

An offshore facility in Louisiana, New Fortress Energy Inc. Initially planned for 2023, it failed to meet its original launch target. Regulators have twice suspended their review pending further details.

“As Europe and Asia demand more LNG, US operators are willing to build more infrastructure to meet that demand,” James West, senior managing director at energy research firm Evercore ISI, told Reuters.

In 2022, roughly 69%, or 7.2 bcft, of US LNG exports went to Europe as exporters shifted shipments from Asia to take advantage of higher prices. In 2021, when prices were higher in Asia, only 35% of US LNG exports, or about 3.3 bcft, went to Europe.

In 2022, gas averaged $41 per million British thermal units (mmBtu) at the Dutch Title Transfer Facility (TTF) in Europe, $34 at the Japan Korea Marker (JKM) in Asia, but only $7 at the US Henry Hub benchmark in Louisiana. . [NG/EU]

Gas prices have recently traded higher in Asia, at $29 per mmBtu, $22 in Europe and just $4 in the US. Analysts expect these higher prices to send more US LNG to Asia this year.

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