US LNG exports in 2022 equal Qatar, #1 in the world. US natural gas price plunges 11% today, 40% in 2 weeks

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

For wolf richter for WOLF STREET.

US exports of liquefied natural gas (LNG) in 2022, at 81.2 million tons, matched those of Qatar, the world’s No. 1 LNG exporter, according to ship tracking data compiled by Bloomberg.

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

Qatar’s LNG exports have been relatively stable over the past 10 years, according to Bloomberg 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 increase in 2016 from almost nothing when the first large 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 billion cubic feet, based on latest US EIA data through October:

In addition, five export terminals are now 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 the latest FERC update on December 13. .

The explosion in June at the Freeport terminal damaged part of the terminal. The reopening of the plant has been delayed several times. The company reported publicly on December 23 that the rebuild work necessary to start initial operations was “substantially complete” and that it was “submitting responses to the last remaining questions included in the Federal Energy Regulatory Commission’s December 12 data request.” . And he said that he delayed plans to restart the facility 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 US plummeted from $6.60 per million Btu on December 15 to $4.98 on December 23, the public announcement day.

Then the price continued to fall. Natural gas futures were down another 11% today, to $3.98 per million Btu at the moment, on the back of weekend weather forecasts, which predicted a milder first half of January for the US. This! brings the fall from December 15 ($6.60) to 40%! Praying for Freeport to restart exports ASAP?

LNG exports provided a new market for growing natural gas production in the US, fueled by fracking, which had tanked the price of natural gas starting in 2009, as can be seen in the chart above. For about the next 12 years, natural gas traded in the $2 to $4 per million Btu range, bankrupting many frackers, including the major natural gas producer and fracking pioneer, Chesapeake in June 2020.

With rising LNG exports, natural gas prices topped the $2-$4 range in 2021 and then skyrocketed to almost $10 with rising prices in Europe, US LNG demand, now LNG exports linked price at US prices. But the explosion at the Freeport plant, which reduced exports and knocked out some demand from the US market, sent those prices back down. And then, in the short term, there’s always the weather.

In Europe, natural gas prices have completely unraveled from the crazy 2022 spike and have fallen back to October 2021 levels, amid record LNG supplies from the US and other countries, a record supply of piped natural gas from Norway, combined with a mild winter, and reduced consumption.

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