The United States is expected to be a net exporter of natural gas in each month remaining in 2018 as well as each month of 2019, according to the U.S. Energy Information Administration, as pipeline exports to Mexico continue to grow along with LNG export capacity.
For the first time in 60 years, the U.S. became a net exporter of natural gas in 2017 as domestic production reduced the need for pipeline imports from Canada while pipeline and liquefied natural gas exports grew.
U.S. natural gas production averaged 73.6 Bcf/d in 2017, up 1% on the year and slightly below the 2015 record level, the EIA said in a March 19 "Today in Energy" report. Production increased most notably in the Appalachian basin and pipeline expansions in the region allowed natural gas to move to markets in the Midwest and Northeast, displacing Canadian imports, the EIA said.
At the same time, U.S. pipeline exports to Canada and Mexico climbed to about 2,460.1 Bcf in 2017 from about 2,148.4 Bcf a year earlier, according to EIA data.
U.S. natural gas pipeline capacity into Mexico increased to 11.2 Bcf/d in 2017 amid increased demand from Mexico's power-generating sector, with pipeline export prices to Mexico more favorable compared with natural gas supplied by LNG shipments, the EIA said. Another 3.2 Bcf/d of pipeline capacity to Mexico is slated to become operational later in 2018.
Meanwhile, U.S. LNG exports increased dramatically over the past two years as new liquefaction capacity came online. Since the Kenai LNG terminal, the only liquefaction terminal operating in the U.S. prior to 2016, ceased operations in 2015, the Sabine Pass LNG terminal in Louisiana began to ramp up operations in 2016 and now has four operating liquefaction units, with a fifth currently under construction. Additionally, the Cove Point LNG facility in Maryland exported its first LNG cargo on March 1. In the past two years, the U.S. has likely shipped off close to 1 trillion cubic feet of natural gas from its operating LNG export terminals.
Four other LNG projects are under construction and expected to increase U.S. liquefaction capacity from 3.6 Bcf/d currently to 9.6 Bcf/d by the end of 2019, further increasing U.S. natural gas exports.