Exports of U.S. LNG cargoes to Europe remained strong in October 2019 as LNG producers continued to rely on the region to play a key role in balancing the global LNG market.
The combined Europe and Central Asia region, which includes Turkey, was the destination for about 42% of the 177.8 Bcf of LNG volumes exported from the U.S. in October 2019, according to the most recent figures from the U.S. Department of Energy. The DOE released the figures Dec. 16, 2019.
The European Union had been the destination for about 30% of the U.S. LNG export volume during the third quarter, taking about the same share as East Asia and Pacific countries.
A variety of factors was behind the push of U.S. LNG into Europe in 2019, including depressed prices and weak Asian demand for spot LNG cargoes. Market observers are watching for signs that Europe will continue to be able to absorb rising supplies in 2020.
Among European countries, the United Kingdom was the biggest importer of U.S. LNG in October 2019, collecting eight cargoes with a total of about 26.2 Bcf.
Other major destinations in Europe were France, which brought in about 14.3 Bcf, and Spain, which took about 13.7 Bcf after a surge of imports in September 2019. Several other countries, including Poland, the Netherlands, Belgium and Portugal, received smaller volumes.
The biggest importer for October 2019 was still in the East Asia and Pacific region, which was the destination for about 41% of U.S. LNG shipments during the month. South Korea, the top overall importer of U.S. LNG since exports began from the U.S. mainland in February 2016, took 42.2 Bcf during the month, significantly more than any other country. Japan brought in about 24.5 Bcf.
China, which is expected to become the world's biggest importer of LNG within a decade, has not received any shipments of U.S. LNG since March 2019 amid an ongoing trade war. A 25% tariff China imposed on imports of U.S. LNG remains in place. A recent initial agreement between the U.S. and China to hold off on additional tariffs and roll back some existing tariffs stirred some hope of a broader deal that could bring relief to the LNG market. But market observers are still looking largely to Europe as U.S. LNG supplies rise with additional production facilities coming online.
The lion's share of U.S. LNG exports comes from Cheniere Energy Inc.'s Sabine Pass LNG terminal in Louisiana, the largest operational LNG terminal in the U.S. Sabine Pass was the site of the first LNG export from the Lower 48. The U.S. ended 2019 with all six major in-service U.S. LNG facilities shipping cargoes to world markets, after Kinder Morgan Inc.'s Elba Island LNG terminal in Georgia became the last to reach that milestone Dec. 13, 2019.
S&P Global Platts Analytics said in an outlook that U.S. LNG export volumes will rise from about 7.6 Bcf/d at the end of 2019 to 12.2 Bcf/d at the end of 2020. That would be a build of 60%, on top of the 65% increase over the course of 2019. The new supplies will test the market's ability to consume them, Platts said, finding that a major policy change or unexpected weather event would be needed to spur additional LNG demand in Asia and release pressure on Europe.
S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.