LNG exports rise at record pace, with Gulf Coast a big contributor
Houston-based Cheniere Energy’s complex handles shipments from U.S.
Global trade of liquefied natural gas grew at a record pace last year, driven in large part by booming exports from the United States — all shipped from the Gulf Coast complex of Cheniere Energy of Houston.
Global trade volumes reached 38.2 billion cubic feet per day, up 10 percent from 2016, the U.S. Department of Energy reported. The United States and Australia, another major natural gas producer, accounted for much of the growth, adding a combined 2.7 billion cubic feet per day in LNG exports.
Cheniere, which ramped up to meet growing demand in Asia and elsewhere, shipped more than 200 cargoes from its
Sabine Pass facility in Louisiana to about 25 destinations worldwide. The company last year produced about 14 million tons of LNG — the equivalent of more than two months of production from the Permian Basin in West Texas.
Cheniere in 2016 became the first U.S. company to export LNG, and it has since started construction on a second export terminal near Corpus Christi. That facility, expected to begin operations next year, will make the company one of the largest U.S. buyers of natural gas.
The growth in LNG trading comes amid a surge in domestic oil and gas production. Energy companies have unlocked vast reserves of natural gas from shale basins in West Texas and elsewhere, positioning the U.S. to become a dominant player in the global LNG export market.
Much of the world’s LNG is destined for Asia, where shifting energy and environmental policies have boosted demand for cleaner-burning fuel sources. Forty percent of U.S. exports were delivered there last year.
China, now implementing an environmental crackdown on coal producers and other industrial polluters to reduce dangerous smog levels, became the world's second largest importer of LNG behind Japan.
Its annual imports skyrocketed more that 40 percent to 39 million tons.
Other Asian countries, including South Korea, Pakistan, Taiwan and Thailand, also added to global demand as they work to address air pollution problems and meet emissions reductions targets under the United Nations climate accord.
Cheniere earlier this year capitalized on China's shift to cleaner-burning energy sources when it signed two long-term deals to sell LNG to PetroChina International Co., a subsidiary of China's state-controlled oil and gas giant. Those sale contracts extend through 2043.
Massimo Di Odoardo, vice president of global gas and LNG at research firm Wood Mackenzie, said in a recent report that record demand in China helped offset a surge in global LNG production last year. He anticipates that growing demand throughout Asia will help balance the market this year as more production capacity comes online.
Dominion Energy of Richmond, Va., also began exporting LNG from a terminal in Maryland in March. Other U.S. companies are expected to follow later this year, including two Houston firms, Freeport LNG, which will operate a Gulf Coast terminal at Quintana Island, and Kinder Morgan, which is completing an export terminal in Georgia.
Several other companies, including Sempra Energy and Tellurian of Houston, are working on projects expected to start up in the coming years.