U.S. LNG EXPORTS UP
EIA - U.S. exports of liquefied natural gas (LNG) reached 1.94 billion cubic feet per day (Bcf/d) in 2017, up from 0.5 Bcf/d in 2016. As LNG exports increased, shipments went to more destinations. U.S. LNG exports in 2017, all of which originated from Louisiana's Sabine Pass liquefaction terminal, reached 25 countries.
More than half (53%) of U.S. LNG exports in 2017 were shipped to three countries: Mexico, South Korea, and China. Mexico received the largest amount of U.S. LNG exports, at 20% of the 2017 total. Growing natural gas demand in Mexico, particularly from the power generation sector, and delays in the construction of domestic pipelines connecting to U.S. export pipelines led Mexico to rely on LNG imports to supplement imports of natural gas by pipeline.
In Asia, the widening difference between the Henry Hub natural gas price—to which U.S. LNG contract prices are indexed—and crude oil—to which LNG prices are benchmarked in Asia—helped to drive increases in LNG imports from the United States. Exports to South Korea accounted for 18% of total U.S. LNG exports in 2017 and were part of long-term contracts between sellers Cheniere Energy and Shell and the Korean natural gas buyers—utilities KOGAS and KEPCO. Exports to China made up 15% of total U.S. LNG exports. These exports were sold mostly on a spot basis, with volumes in October, November, and December increasing as record-high LNG demand prompted China to seek additional LNG on the global spot market to supplement contracted volumes.
Almost 60% of U.S. LNG in 2017 was sold on a spot basis to more than 20 countries in Asia, North and South America, Europe, the Middle East and North Africa, and the Caribbean. Although liquefaction capacity at Sabine Pass is fully contracted under long-term contracts to various buyers, flexibility in those contracts' destination clauses allows U.S. LNG to be shipped to any market in the world.
After countries in Asia and North America (Mexico), countries in Europe collectively accounted for the third-largest share of U.S. LNG exports. LNG imports by several European countries increased in 2017, driven by increased demand primarily from the power generation sector. South American LNG imports declined in 2017. Demand for natural gas in that region is highly variable and is affected by the availability of competing lower-cost natural gas supply and hydro generation output.
The increase in LNG exports over the past two years is the result of the continuing expansion of U.S. LNG export capacity. Two LNG projects—Sabine Pass in Louisiana and Cove Point in Maryland—have come online since 2016, increasing U.S. LNG export capacity to 3.6 Bcf/d.
Four more projects are scheduled to come online in the next two years: Elba Island LNG in Georgia and Cameron LNG in Louisiana in 2018, then Freeport LNG and Corpus Christi LNG in Texas in 2019. Once completed, U.S. LNG export capacity is expected to reach 9.6 Bcf/d by the end of 2019. As export capacity continues to increase, the United States is projected to become the third-largest LNG exporter in the world by 2020, surpassing Malaysia and remaining behind only Australia and Qatar.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.