U.S. to be world's biggest LNG exporter in 2022

The United States is set to become the world's biggest liquefied natural gas (LNG) exporter in 2022, surpassing Qatar and Australia, and may hold that title for years to come.

In a year when China and other large economies in Europe and Asia scrambled to source enough supply for heating and power generation, the United States was sitting on a bevy of supply - one that will grow in coming years.

The U.S. Energy Information Administration projects U.S. LNG exports will reach 11.5 billion cubic feet per day (bcfd) in 2022. That would account for roughly 22% of expected world LNG demand of 53.3 bcfd next year, according to analysts at Goldman Sachs and would outpace both Australia and Qatar, the two largest exporters at present.

The United States should remain the biggest LNG exporter by capacity until around 2025, when Qatar could regain the lead as its North Field expansion starts to enter service. But if some U.S. developers start building new LNG export plants, the United States may not give up the crown.

The United States is expected to become the largest exporter of liquefied natural gas (LNG) by 2022, surpassing Australia and Qatar.

Many of those long-term contracts came from Chinese buyers. 

"After years of avoiding a commitment to buy U.S. LNG, Chinese companies have finally made their move," said Nikos Tsafos at the Center for Strategic and International Studies (CSIS).

So far in 2021, most U.S. LNG exports went to Asia with about 13% going to South Korea, 13% to China and 10% to Japan, according to U.S. energy data. Those were the same top three destinations in 2020 when 13% of U.S. LNG went to South Korea, 12% to Japan and 9% to China.

The growth of U.S. LNG exports helps people worldwide "get greater access to an abundant and reasonably-priced product that helps ease the world’s current supply crunch," said Charlie Riedl, executive director for the Center for Liquefied Natural Gas (CLNG).

Gas prices around the world repeatedly reached record highs in 2021 as utilities tried to lock in LNG cargoes to rebuild low stockpiles in Europe and meet heavy demand in Asia. U.S. gas futures also rose, hitting a 12-year closing high in October. But after mild weather in early December, U.S. natgas stocks were replenished, and prices overseas are now 11 times higher. 

The oil and gas industry touts natural gas as a less polluting fossil fuel than coal or oil. Gas burns more cleanly, so switching from coal lowers emissions, although unburned gas or methane released to the atmosphere contributes heavily to global warming.

Utilities around the world have been using gas to keep power prices relatively low and maintain reliable electric grids as they meet rising energy demand while transitioning from coal to cleaner renewables. However, some countries, including China, have boosted coal production due to the lack of available LNG.

Analysts at RBN Energy said three developers will probably go forward with new projects over the next year: Cheniere's Stage 3 expansion at Corpus Christi in Texas, Venture Global's Plaquemines in Louisiana and Tellurian Inc's Driftwood in Louisiana.

Benchmark natural gas prices in Europe and Asia have soared due to high demand and low storage levels, but the United States has been much less affected