By Curtis Williams January 2, 2024 reuters.com
HOUSTON, Jan 2 (Reuters) - U.S. liquefied natural gas exports hit monthly and annual record highs in December, tanker tracking data showed, with analysts saying it positioned the United States to leapfrog Qatar and Australia to become the largest exporter of LNG in 2023.
The U.S. was the stand out in global LNG supply growth in 2023, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group of the rise to 8.6 million metric tons leaving U.S. terminals in December.
Qatar was the largest LNG exporter in 2022 and Australia the second-largest that year, U.S. government data showed.
"U.S. record production was driven by two factors: the return of Freeport LNG to full service, which added 6 MT and the full-year output of Venture Global LNG's Calcasieu Pass facility that added 3 MT more than in 2022," Munton said.
Full year exports from the U.S. rose 14.7% to 88.9 million metric tons (MT) driven largely by the return to full production of the Freeport LNG plant that had suffered a fire in 2022, and as others increased processing efficiency, LSEG data showed.
Shipments compare to 77.5 million metric tons in 2022, the data from the financial information provider showed.
Europe remained the main destination for U.S. LNG exports in December, with 5.43 MT, or just over 61%. In November, 68% of U.S. LNG exports were to Europe, LSEG data showed.
The month-over-month drop reflected warmer than normal temperatures in Europe and elevated storage levels, analysts at consultants Rystad Energy said. European gas storage was about 97% full at the beginning of December, it reported.
Given all the variables and uncertainties, IMO one could make an argument for $2 or $10 gas. Wish I knew. Given the thesis of the above article of higher LNG exports, one would think simply greater demand would result in slowly increasing prices. Not yet. And then today's WSJ article that the Northeast U.S. can't get enough gas one would think these are all bullish developments.
Thanks, guys. My interest in some feedback is based upon the boom and bust nature of natural gas. Since so many of the early gas focused companies were sub majors and piled on the debt to establish their leasehold, supply didn't exactly respond to the level of demand. The result, up and down price swings through the first thirteen or fourteen years of the Haynesville Shale Play.
We are in a lull in LNG export capacity with some major projects a year or so from coming online. The export capacity will go up significantly but when the time comes, will the demand be there? Since US LNG's main market is Europe, I keep an eye on those demand signals. While we are in a lull, Europe is full speed ahead to adopt renewable energy sources and the become more energy efficient across broad portions of the EU's economy.
It is a cautionary turn of events that Europe has cancelled some regasification plants and new storage. So, what happens to our Haynesville gas prices if the industry creates excess export capacity while demand is falling in Europe? US LNG is at a disadvantage when competing in other markets such as Asia where other major LNG exporting countries have lower costs than we do.