The U.S. Energy Information Agency (EIA) released a report on the status of natural gas imports for this year. Over three of the past four months, the U.S. has exported more natural gas than it has imported, and this trend is expected to extend for the rest of the year and even through 2018.
The U.S. passed Russia in being the world’s largest natural gas producer in 2009, increasing from 55 Bcfd in 2008 to a high of 72.5 Bcfd last year. However, a very large portion of the natural gas produced stateside is used domestically, almost 96% of it last year.
Opportunities to export natural gas to Mexico and Asia are promoting the continuing growth in exports. Canada’s mess of a market with their pipeline and facility issues is also allowing the U.S.’s natural gas to shine in the global markets.
According to Mexico’s national energy ministry (SENER), the country will increase electric power generation using natural gas by close to 50% over the next few years. Across the border, U.S. exporters plan to greatly increase export capabilities by doubling the existing pipeline capacity to Mexico over the next two years. Mexico is also increasing their pipeline capacity to deal with the higher levels of imported gas from the U.S.
Right now, there are only three operational liquefaction trains in the United States, located at Sabine Pass in Louisiana, but a fourth train is in the midst of being commissioned with a fifth train expected to be ready in 2019.
There are also five other liquefied natural gas terminal projects under construction as of right now. The new facilities in Cove Point, Cameron, Elba Island, Freeport, and Corpus Christi are expected to be up and running within the next three years, and as more terminals come online, the EIA expects liquefied natural gas exports to continue to rise. Experts estimate the U.S.’s liquefaction capacity will be near 9.5 Bcfd in 2019 versus the 1.4 Bcfd capacity at the end of last year.
Canadian pipeline imports are slowly being displaced by natural gas production from the Appalachian and Midwestern states. The U.S. is also increasing natural gas exports to Canada via pipelines in Michigan and New York. The Marcellus and Utica basins that cover parts of New York, Ohio, and Pennsylvania will soon be serviced by new pipeline projects like the Rover Pipeline and the Nexus Gas Transmission Pipeline that will transport gas from the northeast into Midwestern states, Canada, and the U.S. Gulf Coast.
Right now, the United States has a way to go in terms of liquefied natural gas export capacity, but the Energy Information Administration estimates that by the year 2020, the U.S. will be third behind Australia and Qatar. As some of the new liquefied natural gas facilities become operational, the Short-Term Energy Outlook forecasts that the U.S. will export close to 4.6 Bcfd by the end of next year, making the U.S. a major player in the global LNG market.
Article written by HEI contributor Raymond Arrasmith.