United States LNG Exports on Continuous Rise

United States LNG export is rising speedily. In the first six months of the year 2016, it has already exported nearly 50 Bcf of LNG. The U.S. is sure to play a dominant role in LNG market in near future. It will have five terminals operating along the Gulf Coast and in Maryland by the year 2020.

U.S. LNG has already being exported to the MidEast, Europe, South America, and Asia. Soon it is most likely to reach to the most energy-deprived region on the Earth, Sub-Saharan Africa. This region of Africa has a very tragic situation on the energy front. As per the latest data, more than two-third of its population is deprived of electricity. And Sub-Saharan Africa has a huge potential of power generation wherein it is likely to become the high potential market for LNG.

Cheniere Energy’s Sabine Pass in Louisiana, which started in February 2016; is the first LNG export plant in the Lower 48 states. So far in this year it has shipped to 11 different countries. Overall, more than 25 tankers of LNG are shipped from the Sabine Pass terminal. On the 22nd August, passing through the newly expanded Panama Canal connecting the Atlantic and Pacific oceans, U.S. LNG reached the most important market of them all, China. This was the first LNG tanker having taken this route after expansion of the Panama Canal. This is an additional benefit to the U.S. LNG exporters, as it is going to reduce the travel time and transportation costs for U.S. LNG shipments to the Asian markets.

Out of the total volume exported through Cheniere’s Sabine Pass only 8% of U.S. LNG is delivered to Europe, the majority of cargoes have been shipped to South America, where exporters have had more favourable return than that is available at the recent European hub prices, according to ICIS shipping platform LNG Edge. Around 3.4 million cubic meters (mcm) of LNG has been exported from Sabine Pass via 26 cargoes. More than 57% of this has been delivered to South America, with Chile the single largest importer there having absorbed 28% of the volume. Cargos to Chile are likely to further increase in near future with Cheniere Energy declaring that it is participating in the development of a Chilean LNG to power solution project.

With the U.S. LNG also reaching out to far markets like China, MidEast, Asia, it will be interesting to be seen where the bulk of U.S. LNG will eventually end up. But there is one positive development for the LNG industry in toto is that due to today’s low prices of it, many new LNG buyers with a growing number of countries are seriously considering LNG imports.

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