U.S. poised to regain crown as world's top LNG exporter

(Reuters) - The United States is on track to become the world's biggest exporter of LNG this year - ahead of current market leader Australia - once a fire-idled Texas plant is restarted, according to Reuters data.

A June fire sidelined Freeport LNG, the second biggest U.S. export facility, and cut U.S. exports of the fuel by about 2 B cubic feet per day (Bcfd). That outage dropped the United States behind top exporter Australia as global demand for the fuel boomed.

In 2022, U.S. exports of natural gas as LNG rose 8% to 10.6 Bcfd, just shy of Australia's 10.7 Bcfd. The United States remained ahead of Qatar, which in third place shipped 10.5 Bcfd, according to data provider Refinitiv.

Those exports were key to helping Europe rebuild its gas stockpiles after Russia's February invasion of Ukraine disrupted supplies. U.S. supplies will be more important this year with Russian deliveries to Europe largely cut.

In 2021, the United States was third in exports behind Australia and Qatar, which sold about 10.5 Bcfd and 10.1 Bcfd of gas as LNG, respectively, but was poised for the top spot in 2022 with the start of Venture Global LNG's Calcasieu Pass plant in Louisiana early in the year.

CROWN WITHIN SIGHT

However, the loss of Freeport LNG's supply at mid-year took away the U.S. chance to take the crown as top exporter in 2022. Freeport LNG said it expects to resume processing in the second half of January, pending regulatory approvals, which would tip the production balance back toward the United States.

With no new LNG plants expected to enter service in Australia until around 2026 and in Qatar until around 2025, analysts have said they expect their production to remain about the same amount in 2023 as in 2022.

The next major U.S. LNG export plants expected to begin operations are QatarEnergy/Exxon Mobil Corp's 2.4-Bcfd Golden Pass plant in Texas and Venture Global's 1.8-Bcfd Plaquemines plant in Louisiana, with first shipments from both expected in 2024.

An offshore Louisiana plant first proposed for 2023 by New Fortress Energy Inc has slipped its initial startup target. Regulators have twice halted their evaluation while awaiting further details.

“As Europe and Asia demand more LNG, U.S. operators are poised to build increasing amounts of infrastructure to meet those demands," James West, senior managing director at energy research firm Evercore ISI, told Reuters.

In 2022, roughly 69%, or 7.2 Bcfd, of U.S. LNG exports went to Europe as shippers diverted cargoes from Asia to get higher prices. In 2021, when prices in Asia were higher, just 35%, or about 3.3 Bcfd, of U.S. LNG exports went to Europe.

In 2022, gas averaged $41 per MM British thermal units (MMBtu) at the Dutch Title Transfer Facility (TTF) in Europe and $34 at the Japan Korea Marker (JKM) in Asia, but just $7 at the U.S. Henry Hub benchmark in Louisiana.

Gas recently has traded higher in Asia at around $29 per MMBtu versus $22 in Europe and just $4 in the United States. Analysts expect those higher prices will drive more U.S. LNG will go to Asia this year.

(Reporting by Scott DiSavino in New York, Marianna Parraga in Houston, Liz Hampton in Denver and Emily Chow in Singapore Editing by Marguerita Choy)

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