The first wave of LNG projects has done more than just catapult the U.S. to the top tier of LNG exporters, it has reshaped markets, helped move LNG closer to being a true global commodity, and spurred changes in everything from ship sizes and routes to contract types and pricing formulas. Talk about having an impact! And, with new projects still coming online in the U.S. and final investment decisions expected on new terminals and expansions this year, the U.S. LNG industry’s effect on the global gas trade is sure to grow. In today’s RBN blog, we look at the practical impacts that have accompanied growing U.S. production with an emphasis on logistics and, perhaps most important, the changes to LNG pricing in Asia.
U.S. LNG export growth has exceeded that of any other nation over the past few years, moving from zero at the start of 2016 to more than 80 million tons per annum (MMtpa; 10.6 Bcf/d) with Venture Global’s Calcasieu Pass facility about to load its first cargo, as we described in Part 1 of this blog series. In Figure 1 below, you can see that the U.S. (blue segments) has been on a tear, shifting from minor player to global leader in only six years. Meanwhile, of the other two major LNG-producing nations, Qatar’s LNG exports (gray segments) have remained close to static since the mid-2010s (though it’s planning a big expansion by mid-decade — see our recent blog on that), and Australia (orange segments), up until this year, had been a step ahead of the U.S. in adding new capacity.
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