By Gavin Maguire
LITTLETON, Colorado- US liquefied natural gas exports are on track to climb to new highs in 2024, as record domestic natural gas production spurred the 10th straight year of volume growth in the lucrative LNG export sector.
US LNG shipments for 2024 look set to hit 86.9 million metric tons, according to ship-tracking data from Kpler.
That total is around 720,000 tons or 0.8 percent more than in 2023, and so sustains the expansion trend of US LNG exports despite brief outages at a number of export terminals in 2024 and delays at new projects that are under construction.
Despite the volume growth, it hasn’t been an easy year for the US LNG export sector, which became the world’s largest last year.
Record gas output at home combined with slowing gas demand in key markets resulted in a roughly 21 percent fall in average US LNG export prices so far this year compared to 2023, according to the US Energy Information Administration (EIA).
From January through September, LNG export prices averaged $6.15 per thousand cubic feet, according to EIA.
That compares to a $7.75 average over the same period in 2023 and a $12.20 average in 2022, which was when Russia’s invasion of Ukraine triggered power sector turmoil and a sharp rise in LNG imports across Europe.
This year’s fall in US LNG export prices was greater than the roughly 15 percent decline over the same period in Henry Hub natural gas futures – the US benchmark gas price – and so helped squeeze LNG exporter revenues through much of 2024.
A 22 percent drop in purchases by top market Europe from 2023’s levels also hurt US LNG exporters by forcing them to find other buyers, often in more distant and dispersed locations that take longer and cost more to service.
For 2024 as a whole, Europe is on track to purchase 43.8 million tons of LNG from the US which is 12.7 million tons less than European buyers purchased in 2023 and the lowest full-year total since 2021, according to Kpler.
To offset the lower orders from Europe, US exporters had to dial up sales to Asia, where volumes climbed by 8 million tons on the year to 31.6 million tons this year.
But shifting those volumes to buyers in Japan, South Korea, India and China costs more than the equivalent cargo loads to Europe due to the far longer journey times. – Reuters
