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Net U.S. Natural Gas Exports More Than Double in First Half of 2018 Thanks to LNG, Says EIA

U.S. natural gas exports through the first six months of 2018 on average have more than doubled the export volumes recorded in 2017, the Energy Information Administration (EIA) said Monday.

From January through June of this year, net U.S. natural gas exports averaged 0.87 Bcf/d, versus 0.34 Bcf/d averaged for all of 2017. After transitioning to becoming a net exporter of natural gas in 2017 -- for the first time in nearly 60 years -- the United States has continued to serve as a net exporter through the first half of 2018, according to the agency.

EIA attributed the increase in net exports to new liquefied natural gas (LNG) facilities in the Lower 48.

“U.S. exports of LNG through the first half of 2018 rose 58% compared with the same period in 2017, averaging 2.72 Bcf/d,” EIA said.

Including Train 4 at Sabine Pass and the start-up of the Cove Point LNG terminal, total U.S. LNG export capacity grew to 3.6 Bcf/d this past spring, EIA noted.

“In the first two full months of operation after the capacity additions (May and June), Cove Point exported an average of 0.57 Bcf/d (76%) of its nameplate capacity,” the agency said. “Another four LNG facilities are under construction and planned to enter service by the end of 2019, ultimately increasing U.S. LNG export capacity to 9.6 Bcf/d.”

Meanwhile, as LNG exports have increased, U.S. pipeline import and export volumes remained relatively flat or declined through the first part of 2018 compared to 2017 levels. This includes roughly 4% growth in pipeline exports to Mexico, with pipeline exports to Canada declining 14%, mostly on a drop in deliveries from St. Clair, MI, into the Dawn Hub in Ontario, according to EIA.

“Although U.S. exports into eastern Canada declined, eastbound flows on the TransCanada Mainline from western Canada increased by 0.26 Bcf/d from 2017 as tolls on the pipeline were lowered this year,” EIA said, citing data from Canada’s National Energy Board.

Coinciding with the extreme cold temperatures and record demand levels observed in January 2018, the United States was not a net exporter of natural gas for that month. Imports from Canada that month averaged 9.25 Bcf/d, the highest level since January 2014, EIA said.

The United States also recorded higher monthly average LNG imports in January 2018 (0.53 Bcf/d) than in the previous two winters.

“Although most LNG cargoes are contracted too far in advance to respond to weather events, one cargo containing 3.1 Bcf of LNG was purchased on the spot market and delivered to the LNG import terminal in Everett, MA, on Jan. 28 to meet increased demand,” EIA said. “This one cargo was enough to shift the United States from being a net exporter to a net importer of natural gas for that month.”

As of its most recent Short-Term Energy Outlook, EIA said it expects net natural gas exports to continue increasing through the end of 2018, driven by continued growth in LNG export capacity and continued natural gas infrastructure buildout in Mexico to facilitate additional exports.

“Overall net natural gas exports are expected to average 2.0 Bcf/d in 2018 and 5.8 Bcf/d in 2019,” according to EIA.

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