by Owen Stuart
November 7, 2019
The US is swimming in natural gas.
The natural gas boom associated with expanding tight oil (oil from shale) production has left the US with more natural gas than it can use. This has suppressed prices and made US natural gas highly competitive on the global market. While pipeline exports to Canada and Mexico have increased rapidly, they are still quite small, leaving US suppliers wishing for additional accessible markets.
The solution? Liquefied natural gas (LNG) exports.
Since 2017, when Freedonia Focus Reports last covered this topic, LNG exports have increased drastically. In 2015, LNG exports totaled a measly 15 billion cubic feet. In 2017, exports stood at 775 billion cubic feet (which helped tip the US into becoming a net exporter of natural gas that year). By the end of 2018, LNG exports had reached nearly 1.1 trillion cubic feet.
The low natural gas prices in the US compared to the rest of the world permit LNG export via tankers – which is more expensive than via natural gas pipelines – to be profitable. Refiners have been rapidly constructing LNG liquefaction plants to take advantage. For example, four LNG liquefaction plants have come on line in 2019:
LNG liquefaction plants coming on line in 2020 are expected to almost double LNG export capacity from where it stood at the start of 2019. In addition, a second wave of LNG plant construction, as well as additional units brought on line at the just-constructed plants, will be completed by the end of the forecast period.
As these terminals are completed, exports of LNG to overseas markets are expected to increase rapidly.
We have you covered! For additional information and analysis of US industry trends, see Natural Gas: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group. This report forecasts to 2023 US natural gas demand and production in cubic feet. Total demand is segmented by market in terms of:
To illustrate historical trends, total demand, total production, the various demand segments, and trade are provided in annual series from 2008 to 2018.
Reported demand figures reflect the volume of natural gas delivered to consumers, in addition to that consumed as lease fuel, plant fuel, and for pipeline and distribution use. Production refers to dry natural gas production, also known as consumer-grade natural gas. Dry natural gas production excludes natural gas liquids such as plant liquids and lease condensate that are removed from the gas stream at processing plants. Re-exports of natural gas are excluded from demand and trade figures.
While you’re there, check out our related reports, which include:
Owen Stuart is a Market Research Analyst with Freedonia Focus Reports. He conducts research and writes a variety of Focus Reports, and his experience as an analyst covers multiple industries.
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