U.S. liquefied natural gas (LNG) exports set records in October and November, as more than 100 cargoes departed and daily send out surpassed 6 Bcf, according to the Energy Information Administration (EIA).
EIA said LNG exports averaged 5.8 Bcf/d in October, when 52 cargoes made way for foreign markets. In November, they inched upward to 6.3 Bcf/d with 55 exported cargoes.
From January through November, domestic LNG exports averaged 4.8 Bcf/d, or 61% more than in 2018, when they averaged 3 Bcf/d, data indicated. LNG volumes in the United States are expected to continue rising next year to an average of 6.4 Bcf/d.
Now the third largest LNG exporter in the world behind Qatar and Australia, the United States is forecast in some estimates to become the globe’s largest in the coming years. More than 20 announced projects totaling roughly 35 Bcf/d are looking to catch the country’s second wave of gas exports in another round of development.
Even now, feedstock deliveries to U.S. export terminals “have been the fastest growing consumption sector” for domestic natural gas this year, according to EIA, which said they increased by 2.8 Bcf/d between January and November. Pipeline deliveries to the terminals surpassed 6 Bcf/d for the first time in July, averaged 7.4 Bcf/d in November and exceeded 8.3 Bcf/d last week as Freeport LNG in Texas started production from its second train.
“EIA expects feedstock deliveries to continue to increase as the remaining trains at Freeport, Cameron and Elba Island are placed into service in 2020, followed by the third train at Corpus Christi in 2021,” the agency said.
Six export facilities have all come online since 2016, the first among them Cheniere Energy Inc.’s Sabine Pass. Dominion Energy Cove Point began exporting in March 2018, while Sempra Energy’s Cameron LNG and Freeport LNG Development LP’s Freeport LNG placed their first liquefaction trains in service earlier this year. Cheniere’s Corpus Christi terminal, meanwhile, commissioned its second train in July. Kinder Morgan Inc.’s Elba Island facility in Georgia also recently commissioned the first five of 10 small liquefaction trains and sent its first cargo out last week.
EIA estimated that nominal U.S. liquefaction capacity currently in operation is 6.1 Bcf/d baseload and 7.5 Bcf/d peak across the six facilities that have 15 trains in service. The meteoric rise in gas exports in recent years has strengthened baseload demand across the country, or the minimum level that must be met on a daily basis, in a slow transformation of the domestic gas market. Growing exports could make benchmark and spot prices even more sensitive in the years ahead.
Across the world, new supplies that have recently come online in Australia, Russia and the United States have led to a surplus of the super-chilled fuel and pushed down prices.
U.S. facilities, however, are still running at full steam. EIA estimated that from January through November, capacity utilization at Lower 48 terminals averaged 93% baseload and 81% peak. Sabine Pass and Corpus Christi had the highest utilization rates at 105% and 91%, respectively, of baseload capacity over the 11-month period.
EIA noted that dominant domestic player Cheniere increased operational capacity with technical upgrades at the Sabine Pass and Corpus Christi terminals that have optimized performance.
Cameron LNG also ramped baseload production capacity to 77% last month, while Freeport LNG increased baseload production to 50% in October and November after commissioning its first train in September. EIA noted that because commissioning liquefaction trains is “done gradually over time,” utilization is low during the early months of operations.
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