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Japan imported most US LNG in January, with South Korea close behind

Japan and South Korea imported the greatest volumes of U.S. LNG in January, together taking in more than one-third of the United States' exports and helping to pick up some of the slack in demand from China.

Japan was the top LNG importer of the month, taking the equivalent of 17.5 Bcf of gas from the U.S. in January, and South Korea was second with 17.0 Bcf, according to numbers the U.S. Department of Energy released March 14.

Even with Japan taking the most LNG in January, South Korea is still the all-time largest importer of U.S. LNG, taking 409.6 Bcf between February 2016, when the exports began, and the end of January 2019. That is almost a fifth of the 2,099.0 Bcf of total U.S. LNG exports during that period.

Cumulatively over that time, Japan was the fourth-largest importer at 207.4 Bcf, behind South Korea, Mexico and China. However, China's imports of the U.S. fuel have lagged in recent months during a trade dispute between the two nations. The U.S. LNG industry hopes that the tensions will be resolved in ongoing negotiations, but in the meantime, cargoes have shifted to other markets.

Including Japan and Korea, five countries accounted for over half of total U.S. LNG exports in January. The other countries were Mexico, which took 14.3 Bcf; Italy, which imported 10.5 Bcf; and the U.K., which imported 10.4 Bcf.

Japan's role among the top importers of U.S. gas could shift in the coming years with possible changes in Japanese demand for the fuel. A March 4 report by the U.S. Energy Information Administration said the return of nuclear power generating plants in Japan could displace some of its LNG imports. The administration said it expects these LNG cargoes to find other destinations in the global market, including Europe and other countries in Asia.

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Altogether, U.S. LNG terminals exported 126.8 Bcf of gas in January, a 3.4% increase over December 2018 and a 75.3% increase over January 2018. The January LNG was divided among 37 cargoes from the three U.S. terminals in commercial service: 28 from Cheniere Energy Inc.'s Sabine Pass LNG terminal in Louisiana, six from Dominion Energy Inc.'s Cove Point terminal in Maryland, and three from Cheniere's newly opened Corpus Christi terminal in Texas.

The total number of cargoes for the month was a slight increase from the 36 cargoes in December 2018, and observers expect the U.S. number to rise and the global market to become more active.

"2019 could be a record year for LNG capacity additions" in the global market, investment management company Sanford C. Bernstein & Co. LLC said in a March 13 research note. The firm pointed to U.S. terminals in development, such as Qatar Petroleum and Exxon Mobil Corp.'s Golden Pass project and Venture Global LNG's Calcasieu Pass project and an expected sixth gas liquefaction train at Sabine Pass as well as projects around the world.

The Federal Energy Regulatory Commission authorized Cheniere to begin commercial service at Corpus Christi's first gas liquefaction train March 1, but the train, which has a capacity of 4.5 million tonnes per annum, already produced LNG during the commissioning process that precedes service. Cheniere plans to bring a second Corpus Christi train online in the second half and is developing a third train there.

On March 12, FERC allowed a fifth train at the Sabine Pass terminal to start service.