U.S. LNG is redefining global energy flows, ensuring the United States has a significant presence in Asia
In recent months, US LNG exports to China, Japan and South Korea – the three main importers of the fuel – have reached record levels, aided by the resumption of industrial production from the coronavirus pandemic.
More US LNG in Asia
The surge in US energy exports is not only forcing large traditional producers such as Saudi Arabia to seek new customers for oil and gas. It is also redefining global energy flows and securing America a significant presence in Asian markets, he writes Reuters.
In Japan, for example, the world’s third largest economy, the United States competes head-to-head with Qatar when it comes to LNG exports. This is despite Qatar’s supplying Japanese utilities for years, and despite the fact that US LNG is 40 percent more expensive than Qatari gas per unit of heating.
How are liquefied natural gas exports going
However, US exports are about to increase further. Natural gas flows to export terminals in the United States – where the gas is cooled to -160 ° C before being loaded onto LNG tankers and shipped – reached 11.8 billion cubic feet on March 31. That’s a daily record, averaging 10.8 billion cubic feet per day for the month of March.
In February, US LNG shipments to Japan, China and South Korea reached 3.2 million tons, more than double the previous monthly record.
The growth was supported by the fact that gas demand in Northeast Asia remained relatively strong. Particularly cold winter temperatures, which have caused a spike in gas heating demand, are also complicit.
Although LNG exports decreased in March compared to February – for seasonal reasons: temperatures have become milder – they are still above average levels for the month, according to data provided by analysis firm Eikon.
Qatar runs shelters
The increase in LNG shipments in the United States is linked to the shale gas revolution and the completion of the first generation of export terminals. But Qatar – the world’s largest exporter of liquefied natural gas – has taken action, announcing an increase in its export capacity and trying to lure buyers with lucrative contracts. For example, a recent supply agreement with the Chinese company Sinopec predicts one of the lowest prices ever recorded.
According to analysts, US export projects will have to reconsider their costs or fail to compete with Qatar.