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South Korea closing in on Mexico as top destination for US LNG

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South Korea closing in on Mexico as top destination for US LNG

South Korea is getting closer to overtaking Mexico as the top destination for U.S. LNG exports, the latest figures from the U.S. Department of Energy show, with the Asian country importing about 20 billion cubic feet more of liquefied natural gas than Mexico in December 2017.

South Korea has now imported more than 140 Bcf of U.S. LNG since Cheniere Energy Inc.'s Sabine Pass shipped its first cargo in February 2016, putting it just behind Mexico's 167.8 Bcf of imports. China is also not far behind after taking 23.4 Bcf in December 2017, bringing its cumulative U.S. LNG imports to 120.6 Bcf.

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Mexico imported just one cargo carrying 3.6 Bcf of LNG in December 2017, compared to South Korea's 23.4 Bcf and China's 20.8 Bcf, according to the DOE.

Mexico surprised many in the global gas industry when it emerged as the top home for U.S. LNG. From February 2016 through December 2017, Mexico had imported nearly 19% of American gas that is super-cooled in southwestern Louisiana and loaded onto tankers.

That is set to change, industry observers say, as Asian markets look to increase their natural gas consumption. Cheniere announced Feb. 9 that two of its affiliates had signed contracts with a subsidiary of the state-run China National Petroleum Corp., the first long-term LNG agreement with China that has come out of an aggressive marketing push by U.S. LNG export companies seeking to tap in to booming Chinese gas demand. South Korea has been ramping up its imports of U.S. LNG since receiving its first cargo under a long-term contract between Korea Gas Corp. and Cheniere.

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The U.S. has now exported 890 Bcf of LNG from Sabine Pass, the only major LNG terminal that is exporting from the U.S.