US natural gas producers are expected to benefit significantly from the emerging liquefied natural gas (LNG) trade. Prior to 2016, only one LNG export facility operated in the US, located in Kenai, Alaska. However, by 2021 six LNG export facilities are projected to be operating in the lower 48 states. As these terminals are completed, exports of LNG to overseas markets are expected to increase rapidly, spurring demand for natural gas to be converted into LNG.
In February 2016, the Sabine Pass natural gas liquefaction terminal in Sabine, Louisiana made its first shipment of domestically sourced natural gas, becoming the second LNG export facility in the US, and the first in the lower 48 states. The terminal’s Train 1 was authorized to begin commercial operations in May 2016 and Train 2 commenced operations in September 2016. Three more trains remain under construction while a sixth is being commercialized.
The five remaining facilities currently under construction are located in Georgia, Louisiana, Maryland, and Texas. The facility in Maryland, Dominion Cove Point, is expected to be completed by the end of 2017. An additional four facilities have been approved by the Federal Energy Regulatory Commission but are not yet under construction, and several more have been proposed.
When completed, the six LNG liquefaction facilities currently under construction will support a capacity equivalent to approximately 13% of current domestic natural gas production, making the US the third largest liquefaction capacity holder in the world after Australia and Qatar. Nearly all of this capacity has been fully or partially contracted to energy companies in countries including Japan, India, and South Korea, as well as locations in Europe.
For more insights into the US natural gas market and industry, see Natural Gas: United States, a report recently released by the Freedoina Focus Reports division of The Freedonia Group. The report includes US natural gas demand segmented by market in 2006-2016 historical series with forecasts to 2021. Market segments encompass:
- electric power
- other markets.
About the Author
Luke Hickman is a Market Research Analyst for Freedonia Focus Reports. He holds a degree in economics, and his experience as an analyst covers multiple industries.