LNG Exports Have Sent U.S. Natural Gas Demand Surging This Decade

Rising exports of LNG from the U.S. Gulf Coast drove a 43% surge in U.S. natural gas demand in the decade to 2022, the U.S. Energy Information Administration (EIA) said on Tuesday.

Demand for natural gas in America – including for domestic consumption and gross exports – jumped by 43%, or by 34.5 billion cubic feet per day (Bcf/d), between 2012 and 2022, as demand in Texas and Louisiana soared by 116%.  

Texas and Louisiana saw their combined natural gas demand jump by 16 Bcf/d—a surge that was largely driven by the higher demand for feedgas for LNG exports out of the U.S. Gulf Coast, the EIA said in its analysis.

The U.S. began exporting LNG in 2016, when the first LNG export terminal, Cheniere Energy’s Sabine Pass in Louisiana, began operations. Since then, the six trains operating at the facility have produced more than 2,000 LNG cargoes, Cheniere says. The six trains have the capacity to process more than 4.7 Bcf/d of natural gas into LNG.

Since Sabine Pass came online, other export terminals in both Louisiana and Texas began exporting LNG, prompting most of the growth in natural gas demand, the EIA noted.

U.S. LNG exports are expected to increase, from 10.59 Bcf/d last year, when Freeport LNG was shut down after June 2022, to 12.07 Bcf/d this year, and to 12.73 Bcf/d in 2024, per the Short-Term Energy Outlook (STEO) of the EIA from earlier this month.

Higher natural gas-fired electric power generation was the second most significant factor in gas demand growth in the decade through 2022. Gas replaced a growing number of coal plants and was used more in power generation due to rising demand for air conditioning, the EIA said.  

Gas demand in the Midwest jumped by 35% between 2012 and 2022 as gas consumption in the electric power sector more than doubled. In the Northeast, natural gas demand surged by 36% in the past decade, also driven by higher gas-fired power generation, according to the EIA estimates.

By Charles Kennedy for Oilprice.com

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