Let It Flow - The Rise Of U.S. LNG Exports

An Update on Recent and Upcoming Liquefaction Capacity Additions

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In just over three years, U.S. LNG exports have gone from zero to a single-day peak of nearly 5.8 Bcf/d this past winter. In doing so, they have transformed the demand profile of the domestic natural gas markets, reshuffled physical gas flows along the Texas and Louisiana Gulf Coast markets and changed pricing relationships across much of the country. And those are just the domestic effects of the export phenomenon - the rise of LNG exports from the U.S. also has shaken up international markets.

The pace and timing of this emerging demand growth over the course of the year will come down to how quickly the anticipated trains can complete construction and testing, the timing of which can depend on a whole host of factors, including the extent of the repairs or modifications that are needed along the way, regulatory approvals, or the timing of gas pipeline connections to supply the facilities. Understanding these factors will be key to anticipating the gas-market impacts of the oncoming demand.

This report reviews historical feedgas flows at operating terminals as well as the latest activity at trains and terminals that are currently in development — either under construction or in the commissioning phase — using the typical ramp-up process as a guide to anticipate future feedgas demand.

Key take-aways from the report include:

  • With a total of about 30 MMtpa, or 4 Bcf/d, of liquefaction capacity being added in 2019, feedgas deliveries are poised to be the most significant driver of Lower-48 natural gas demand this year.
  • Lower-48 gas demand for LNG exports has climbed 67% in the past seven months to more than 5 Bcf/d, from about 3 Bcf/d in October 2018.
  • 9 MMtpa (~1.2 Bcf/d) of export capacity was added in the first quarter of 2019 alone; another 20 MMtpa or so (nearly 3 Bcf/d) is targeting either first LNG production or completion by the end of this year.
  • Liquefaction capacity additions will nearly double LNG exports by the end of this year to 8.5 Bcf/d, up from about 4.5 Bcf/d in December 2018, with the bulk of that happening along the Texas and Louisiana Gulf Coast.

Let It Flow” is included in RBN Energy’s 2019 Drill Down report series, a suite of reports covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids. Drill Down reports are part of RBN Backstage Pass™ premium resources that also include Blog Archive Access, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. By subscribing to RBN’s Backstage Pass™ Premium Services, you plug into our network and get direct access to our premium resources.

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