The U.S. has likely exported more than 1 trillion cubic feet of natural gas from its LNG export terminals, but the industry still has some work to do to maximize its potential.
The U.S. was expected to cross the 1 Tcf mark in February, roughly two years after the country shipped its first cargo from Cheniere Energy Inc.'s Sabine Pass terminal in Louisiana. Roughly half of that chilled gas has headed to Mexico, South Korea and China.
Exports from Sabine Pass facility reached 962.4 Bcf in January, according to the most recent numbers from the U.S. Department of Energy. Sabine Pass in February received about 82 Bcf of natural gas on three pipelines leading to the terminal, and flows to the facility have so far averaged roughly 3.15 Bcf/d in March, according to SNL Energy pipeline flow data.
Mexico remains the top destination, receiving 18.5% of all volumes exported through January, followed closely by South Korea, which took 16.8%, and China, which took 13.9%.
Industry observers expect South Korea and China will soon emerge as the top destinations for U.S. LNG. South Korea imported the most from Sabine Pass in January, taking about 21.3 Bcf of gas. China received 13.6 Bcf. Roughly 10.4 Bcf went to Mexico over the month.
While LNG exports are doing well, new natural gas infrastructure is still needed in U.S. and overseas markets to maximize the potential for American LNG exports, said policymakers and industry leaders at an event in Washington, D.C. The U.S. is set to add more than 6 Bcf/d of LNG export capacity by the end of 2019. Additional projects could make it to market with efforts to create demand overseas through pipelines, power plants and other infrastructure. In the U.S., new pipelines are required to get gas from key producing regions to the U.S. Gulf Coast, where more than a dozen LNG export projects have been proposed, they said.
U.S. Rep. Bill Johnson, R-Ohio, echoed calls for a shortened federal permitting process. Johnson, who has introduced two bills to speed up the permitting process for LNG exports, said that without "regulatory certainty," the U.S. could lose out on global market share.
LNG export advocates said they are looking at ways to make destination markets more interconnected to better use gas imports. Katharine Ehly, policy adviser at the American Petroleum Institute, highlighted a recent push from the U.S. Trade and Development Agency to spur investment in gas infrastructure in emerging or potential LNG import countries that could open markets for American gas.
However, President Donald Trump's steel and aluminum tariffs may cause complications for oil and gas groups, which are pressing for more exemptions and for the current exemptions to be made permanent so that the materials for fuel transportation projects do not become expensive and difficult to obtain. The tariffs go into effect March 23.
The trade groups had immediately criticized Trump's March 8 announcement of a 25% tariff on steel imports and 10% tariff on aluminum imports. The groups pointed to a shortage in the domestic supply of specialty steel products for infrastructure projects such as LNG export terminals and large-diameter pipelines. In particular, the Washington, D.C.-based Center for Liquefied Natural Gas said the new exemptions fall short of the group's calls for exemptions of steel used in big-ticket LNG export terminals.