July 14, 2023 [HydrocarbonEngineering]- The US Energy Information Administration (EIA), has reported that natural gas deliveries by pipeline to US LNG export facilities averaged 12.8 billion ft3/d in the first six months of 2023, according to data by S&P Global Commodity Insights.
This average was 1 billion ft3/d (8%) more than the 2022 annual average and 0.5 billion ft3/d (4%) more than the first six months of 2022.
LNG feed gas set a monthly record in April 2023 at 14 billion ft3/d, supported by high international demand for US LNG exports, particularly in Europe. However, LNG feed gas declined in May 2023 (13 billion ft3/d) and June 2023 (11.5 billion ft3/d), mostly due to maintenance at several US LNG export facilities, including Sabine Pass and Cameron.
LNG feed gas levels are typically higher than LNG export levels because LNG export terminals consume some of the feed gas to operate on site liquefaction equipment. All US LNG export facilities, except Freeport LNG, have on-site natural gas-fired power plants to generate electricity required to operate equipment involved in converting natural gas from a gaseous to a liquid state, or LNG. The EIA estimates that approximately 14% of LNG feed gas is used for liquefaction processes, mostly for on site power generation.
Freeport LNG is the only liquefaction facility in the US, and one of only two LNG export facilities in the world, that uses electric motors exclusively instead of natural gas turbines to drive the liquefaction compressors. Using electric motors helps the facility comply with the local air emission standards around the Houston area, the location of Freeport LNG. Freeport LNG purchases electricity from the grid to power its liquefaction processes because it does not have an on site natural gas-fired power plant. As a result, most of Freeport LNG’s feed gas is converted into LNG.
The EIA forecasts US LNG exports to average 12 billion ft3/d in 2023 and 13.3 billion ft3/d in 2024, as two new LNG liquefaction projects are expected to come online – Golden Pass and Plaquemines, according to the July 2023 STEO. Global economic conditions and demand for natural gas in Europe and Asia may affect this forecast.
Trends supporting higher LNG exports from the US include assumed continuous replacement of Russia’s natural gas exports by pipeline to Europe. Limited growth in global LNG export capacity in the next two years may increase the need for destination-flexible LNG supplies, mainly from the US. So far in 2023, mild winter temperatures and above-average storage inventories in the northern hemisphere decreased spot LNG prices, which could be an incentive to import more LNG, particularly in the relatively more price-sensitive countries of southeast Asia.
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