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US LNG exports in 2022 match Qatar, number 1 in the world. US natural gas price drops 11% today, 40% in 2 weeks

On delays in restarting the explosion-damaged Freeport LNG export terminal and on weather forecasts.

By Wolf Richter for WOLF STREET.

U.S. exports of Liquefied Natural Gas (LNG) in 2022, at 81.2 million tonnes, matched those of Qatar, the world’s top LNG exporter, according to ship tracking data compiled by Bloomberg.

The US would have been No. 1 if an explosion in June had not shut down the Freeport, Texas, natural gas liquefaction plant, which reduced LNG export capacity by 17%.

Qatar’s LNG exports have remained relatively stable over the past 10 years, according to Bloomberg’s ship tracking data. But the country is now involved in major expansion projects amid a surge in global demand for LNG.

US LNG exports began to rise in 2016 from almost nothing when the first major LNG export terminal – originally an LNG import terminal – came online. Since then, large sums have been invested to build and expand LNG export facilities primarily in Louisiana and Texas, but also in Maryland and Georgia.

US LNG exports, in billions of cubic feet, according to the latest US EIA data through October:

Additionally, five export terminals are under construction in the US, and 11 export terminals have been approved by the Federal Energy Regulatory Commission but are not yet under construction, according to FERC in its latest update on Dec.

The June explosion at the Freeport terminal damaged part of the terminal. The reopening of the factory has been postponed several times. The company publicly reported on Dec. 23 that the rebuilding work required to begin initial operations was “substantially complete” and that it was “submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission’s Dec. 12 data request.” And he said he had postponed plans to restart the facilities until the second half of January.

Given the new delay – the information must have come out days before – the price of natural gas in the USA fell from US$ 6.60 per million Btu on December 15th to US$ 4.98 on December 23rd, the day of the public announcement .

The price then continued to fall. Today, NG futures are down another 11% to press time at $3.98 per million Btu on weekend weather forecasts, which predicted a milder first half for the US. This brings the drop since Dec. 15 ($6.60) to 40%! Praying Freeport restarts exports ASAP?

LNG exports have provided a new market for the growing US natural gas production, driven by fracking, which has brought the price of natural gas down since 2009, as you can see in the chart above. Over the next 12 years, NG traded in the $2 to $4 per million Btu range, driving many frackers out of business – including major natural gas producer and pioneering fracker, Chesapeake, in June 2020.

With rising LNG exports, natural gas prices surpassed the $2-$4 range in 2021 and then rose to nearly $10 as prices rose in Europe, demand for LNG from US, now that LNG exports have linked the US price to global prices. But the explosion at the Freeport factory, which reduced exports and took some of the demand out of the US market, brought those prices back down. And then, in the short term, there’s always the weather.

In Europe, natural gas prices fully reversed the crazy peak in 2022 and fell back to October 2021 levels, amid record LNG supplies from the US and other countries, record deliveries of piped natural gas from Norway, combined with a mild winter, and a reduction in consumption.

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