US Becomes World's No.1 LNG Exporter for the First Time

Europe Surpasses Australia and Qatar to Become the Largest U.S. Export Market

The United States has surpassed Australia and Qatar for the first time to become the world's largest liquefied natural gas (LNG) exporter.

Photo near the Venture Global LNG plant construction site. Not directly related to the article. [Image source=AFP Yonhap News]

According to Bloomberg's 2023 global LNG export rankings reported on the 2nd (local time), the U.S. exported 91.2 million tons (t) of LNG last year. The U.S. was the world's second-largest LNG exporter in 2022, following Qatar, but it overtook Qatar to become the number one LNG exporter globally. Bloomberg explained, "Qatar's exports declined by 1.9% for the first time since 2016, dropping it to third place behind Australia."

The increase in U.S. LNG exports is attributed to the reopening of the Freeport LNG export terminal in Texas, which had been closed due to a fire, resuming operations from the end of January last year. The Freeport LNG export terminal is the second-largest facility in the U.S., capable of handling 15 million tons of exports annually.

U.S. LNG is credited with stabilizing the soaring natural gas prices caused by the Ukraine crisis and the climate emergency. After Russia cut off natural gas pipelines to Europe following its invasion of Ukraine, European natural gas prices surged to 339 euros per megawatt-hour (MWh) in August 2022. This is more than four times the price of 73 euros in mid-February 2022, just before the outbreak of the Ukraine war. That year, the U.S. increased LNG production by 10 million tons and boosted supplies to Europe, helping European natural gas prices remain stable in the 30-euro range despite the Hamas conflict.

Europe has become the largest export market for U.S. LNG. According to financial information firm LSEG, 68% and 61% of U.S. LNG exports were shipped to Europe in November and December last year, respectively. Demand for U.S.-sourced LNG, which offers stable supply, is also growing in Asia. As of December last year, Asia accounted for 26.6% of U.S. LNG exports, up from 18.5% the previous month. Asia ranks second in the share of U.S. LNG exports.

With expectations that the U.S. will further increase LNG production this year, it is likely to solidify its title as the world's top LNG exporter. U.S. LNG producers are expanding facilities to meet rising demand. Notably, two companies?venture LNG producer Venture Global LNG and Golden Pass, a joint venture between ExxonMobil and QatarEnergy?are leading this expansion. Bloomberg forecasts that if these companies operate at maximum capacity, the U.S. will produce an additional 38 million tons annually.