Strong demand in both Europe and Asia, combined with additional liquefaction capacity, will propel American LNG exports past Australia and Qatar
Following record American LNG exports last year, the US is poised to become the world’s top LNG exporter in 2022, surpassing Australia and Qatar.
Annual US LNG exports are forecast to grow by over 25% — about 2.4 billion cubic feet per day (bcfd) — to reach an average of 12.2 bcfd this year, according to the US Energy Information Administration (EIA). The EIA says US LNG exports will grow another 0.5 bcfd in in 2023.
Growth in US LNG exports has been underpinned by increased demand in Europe — as it moves to lessen its dependence on Russian natural gas — and Asia, as well as increased LNG liquefaction capacity. US LNG exports to Asia increased 51% year-on-year, reaching 4.6 bcfd in 2021, making it the third largest supplier to the region behind Australia (10.3 bcfd) and Qatar (7.4 bcfd), according to International Energy Agency (IEA) estimates based on Cedigaz data.
Buoyed by the commissioning of Sabine Pass Train 6 and capacity expansions at Cheniere’s Sabine Pass and Corpus Christi LNG export terminals, US LNG exports reached a new high of 11.9 bcfd in March 2022.
By the end of 2022, once the new Calcasieu Pass LNG export facility is placed in service, the US will have more LNG capacity than any other country.
“We expect that relatively high LNG demand in Asia and Europe will support continued US LNG exports,” says the IEA.
Other liquefaction facilities on the US Gulf Coast are adding capacity. Expansion of Sempra’s Cameron LNG is being supported by a Heads-of-Agreement (HoA) signed by Sempra Infrastructure with TotalEnergies, Mitsui & Co., Ltd. and Japan LNG Investment – a joint venture of Mitsubishi Corp and NYK.
“We expect that relatively high LNG demand in Asia and Europe will support continued US LNG exports”
Cameron LNG’s expansion includes the development of a fourth 6.75 mta capacity train, and a 5% increase of the current 13.5 mta from the first three trains through ‘debottlenecking’. Design changes, including electric drive technology, will also improve the facility’s carbon footprint.
The strong market fundamentals for LNG and new long-term offtake deals are encouraging further investment in capacity. Tellurian executive chairman Charif Souki says his company issued a notice to proceed to Bechtel Energy on limited preliminary work on phase one of Tellurian’s Driftwood LNG project in Louisiana. Tellurian could deliver LNG from its US$12Bn Driftwood LNG project to the market by Q1 2026.
Venture Global LNG signed three 20-year sales and purchase agreements (SPAs) in March, including one with Shell NA LNG for the supply of 2 mta of LNG from its Plaquemines LNG export facility, doubling its offtake from Venture Global LNG facilities. Its 10 mta Calcasieu Pass LNG export facility at Cameron Parish, Louisiana began producing LNG in January. The Plaquemines LNG export facility in Louisiana is scheduled to come online in 2024.
Additionally, Venture Global LNG signed two 20-year SPAs with New Fortress Energy, including 1 mta from Plaquemines LNG and 1 mta from CP2 LNG. This is the first SPA for the CP2 LNG facility, which the company expects to commence construction on in 2023.
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