U.S. Exports Of LNG Dip In May

U.S. Exports Of LNG Dip In May

By Julianne Geiger – Jun 02, 2023, 2:00 PM CDT

  • Reuters: LNG exports out of the United States fell in May to 7.66 million tonnes in May.
  • The United States shipped less LNG to Europe in May, while increasing LNG exports to Asia and Latin America.
  • Europe’s LNG prices have eased, weakening the continent’s appetite for U.S. LNG.
Sabine pass LNG

LNG exports out of the United States fell in May to 7.66 million tonnes, according to shipping data cited by Reuters. That’s a 0.35 million tonne dropoff from the previous month.

The United States shipped less LNG to Europe in May, while increasing LNG exports to Asia and Latin America. Asia’s thirst for U.S.-derived LNG intensified in May as Asia LNG prices for July delivery increased.

But Europe’s LNG prices have eased, weakening the continent’s appetite for U.S. LNG.

For the month of May, the United States exported 60.5% of all its outgoing LNG to Europe, 14% to Asia, and 11% to Latin America, the shipping data showed.

Demand for LNG globally is currently high, as European countries rush to build import terminals and purchase liquefied natural gas to offset the very low, or complete lack of, Russian pipeline gas supply. 

But despite the surge in LNG demand and the abundance of natural gas in the United States, America’s next LNG export boom could stall as costs have surged, financing has become more complicated with the higher interest rates, and customers are loathed to sign onto 20-year supply contracts.

May’s exports highlight the effect that price volatility has on the flow of LNG.

The EIA has predicted that U.S. LNG exports will average 12.1 billion cubic feet per day this year, a 14% increase over last year—and another 5% increase next year, to 12.8 billion cubic feet per day.

Responsible for the U.S. LNG export rise, the EIA said, was “high global demand as LNG will continue to displace pipeline natural gas from Russia to Europe,” adding that the Freeport LNG export terminal’s return to service and additional LNG export projects to be commissioned by the end of 2024 supports its forecast.

By Julianne Geiger for Oilprice.com

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