Rising spot demand in both the winter and summer months from Asia and Europe and lower U.S. benchmark gas prices than international prices resulted in record-high American liquefied natural gas (LNG) exports in the first half of this year, the U.S. Energy Information Administration (EIA) said on Tuesday.
U.S. LNG exports jumped to an average of 9.6 billion cubic feet per day (Bcf/d) between January and June 2021, up by 42 percent compared with the first half of 2020. In the summer of last year, U.S. exports of LNG had dropped to record lows due to the low demand and low prices during the lockdowns in the pandemic in the key natural gas importing regions, Asia and Europe.
At the end of 2020, global LNG demand started to rebound with the easing of the COVID-related restrictions and the start of the winter heating season in the northern hemisphere. As a result, U.S. exports jumped in November and December 2020.
American exports continued to soar at the start of 2021, with high winter demand due to colder weather in Asia and Europe and outages at LNG export facilities outside the United States, including in Australia, Malaysia, Nigeria, Algeria, Norway, and Trinidad and Tobago.
Demand for LNG in Asia and Europe continued to be high even after the end of the winter season because of lower-than-normal natural gas stocks in storage. Lower Henry Hub and U.S. LNG export prices compared to the international spot prices in Asia and Europe also drove higher American LNG exports this year.
Asia remained the top destination for U.S. LNG exports from January through May in 2021, accounting for 46 percent, the EIA has estimated. Asia was followed by Europe with a 37-percent share of American LNG exports. Shipments to Brazil also jumped as the Latin American country turned to more gas-fired power capacity amid the worst drought in 91 years.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More