US LNG export dominance tested as Europe's demand wilts: Maguire
The opinions expressed here are those of the author, a columnist for Reuters
By Gavin Maguire
LITTLETON, Colorado, Sept 4 (Reuters) -The United States has remained the largest exporter of liquefied natural gas (LNG) so far in 2024, but a steep drop in selling prices and a sharp swing in export volumes to key markets is likely testing exporter appetite to stay on top.
The United States shipped a record 56.9 million metric tons of LNG during the first eight months of 2024, according to Kpler.
That surpassed the 54.3 million tons from Australia and 53.7 million tons from Qatar during that period, and marks only the second straight year that U.S. exporters have topped global export rankings.
However, a more than 25% drop in average LNG export prices during the first half of 2024 from the first half of 2023 dealt a heavy blow to export revenues, which dropped by $4 billion from the opening half of 2023 to $13.2 billion, data from the U.S. Energy Information Administration (EIA) shows.
That was the lowest half-year revenue total since the first half of 2021, and marks a more than $12 billion fall from the second half of 2022 when U.S. export earnings from LNG peaked.
The challenge of sharply falling revenues was compounded by a sharp reconfiguration in export volumes to key markets, which saw shipments to relatively close markets in Europe drop by more than 20% while sales to more distant Asia rose by over 40%.
Continued muted LNG demand in Europe and further growth in Asia may test the resolve of U.S. exporters to remain the world's largest LNG sellers, as several far-flung Asian markets can be more cheaply supplied by other sellers.
EUROPE'S RISE AND FALL
Europe's sudden jump in demand for LNG since Russia's invasion of Ukraine in 2022 snarled natural gas pipeline flows to the region has been the main catalyst behind the ascendancy of the U.S. LNG export industry.
From 2018 through 2021, U.S. LNG exports to Europe averaged around 15 million tons a year, according to Kpler, but jumped to around 55 million tons annually in 2022 and 2023 as Europe's power firms scrambled to replace lost Russian gas by whatever means necessary.
U.S. exporters were happy to help fill the gas gap, lifting total export volumes by 95% from 2019's total by the end of 2022.
Europe's share of the total U.S. LNG traffic also roughly doubled, from around 37% from 2019 through 2021 to nearly 70% in 2022.
A roughly 44% drop in shipments to Asia during 2022 from the year before also allowed U.S. LNG sellers to prioritize Europe over all other customers, and capitalize on the unprecedented supply shock that roiled global gas markets during that period.
COOLING DOWN
U.S. LNG shipments to Europe scaled even greater heights in 2023, but the tone has changed in 2024, with shipments from January through August dropping by 22% from the same months in 2023.
A key driver behind that slowdown has been a sharp climb in European power generation from renewable energy sources, which remain a priority for Europe's power firms going forward.
Solar and wind power's share of electricity generation in Europe jumped from around 16.4% in 2022 to 20.5% so far in 2024, according to Ember.
To make way for the higher renewables generation, fossil fuel generation's share dropped from around 44.6% in 2022 to 36.6% so far this year.
Coal-fired power has been the main fossil fuel source that has been cut in Europe, but natural gas generation's share has also declined, from around 26% in 2022 to 22% so far this year.
PIVOT
Lower gas reliance across Europe is bad news for U.S. LNG exporters.
To make up for lower sales into Europe, U.S. exporters may attempt to grow share in Asia, which is a clear bright spot for global gas sellers.
However, other major exporters including Qatar and Australia boast far lower shipping distances to key Asian markets, on top of competitive gas liquefaction charges.
Shipments to India, for example, can take five times longer from Cove Point in the U.S. than from Ras Laffan in Qatar, LSEG data shows.
And Australia can ship LNG to southern China in under nine days, compared to 35 days from the U.S. East Coast.
The U.S. LNG tanker fleet is able to handle such long distances, but the stretched-out turnaround times would eat into exporter earnings, and may result in the LNG export sector dialing back shipments to only the largest buyers.
That sharper focus would help preserve profits for the sector, but may lead to the U.S. losing the top LNG exporter spot to its main rivals that have expansion plans already in place to serve fast-growing local markets.
<The opinions expressed here are those of the author, a columnist for Reuters.>
U.S. liquefied natural gas (LNG) export volumes, prices & revenues since 2010 https://tmsnrt.rs/47cJDHv
U.S. exports of liquefied natural gas (LNG) by continent since 2018 https://tmsnrt.rs/3AYRuMK
Reporting by Gavin Maguire; Editing by Jamie Freed
නවතම පුවත්
වියාචනය: XM Group සමාගම් ක්රියාත්මක කිරීම පමණක් වන සේවා සපයන අතර වෙබ් අඩවියේ හෝ වෙබ් අඩවිය හරහා ලබා ගත හැකි අන්තර්ගතය බැලීමට සහ/හෝ භාවිත කිරීමට පුද්ගලයෙකුට ඉඩ සලසමින් අපගේ මාර්ගගත වෙළඳ පහසුකම වෙත ප්රවේශය ලබා දෙන අතර වෙනස් කිරීමට හෝ පුළුල් කිරීමට අදහස් නොකරයි. එවැනි ප්රවේශය සහ භාවිතය සෑම විටම (i) නියමයන් සහ කොන්දේසි, (ii) අවදානම් අනතුරු ඇඟවීම් සහ (iii) සම්පූර්ණ වියාචනයට යටත් වේ. එබැවින් එවැනි අන්තර්ගතයක් සාමාන්ය තොරතුරුවලට වඩා වැඩි යමක් සපයා නොමැත. විශේෂයෙන්ම, අපගේ මාර්ගගත වෙළඳ පහසුකමේ අන්තර්ගතය පෙළඹවීමක් හෝ මූල්ය වෙළඳපොළවල කිසිදු ගනුදෙනුවක් සිදු කිරීමට ඉදිරිපත් කිරීමක් නොවන බව කරුණාවෙන් සලකන්න. ඕනෑම මූල්ය වෙළඳපොළක වෙළඳාම් කිරීම ඔබේ ප්රාග්ධනයට සැලකිය යුතු අවදානමක් එක් කරයි.
අපගේ මාර්ගගත වෙළඳ පහසුකමේ ප්රකාශිත සියලු කරුණු අධ්යාපනික/තොරතුරුමය අරමුණු සඳහා පමණක් අදහස් කෙරෙන අතර මූල්ය, ආයෝජන බදු හෝ වෙළඳ උපදෙස් සහ නිර්දේශයන්; හෝ අපගේ වෙළඳ මිල පිළිබඳ වාර්තාවක්; හෝ ඕනෑම මූල්ය උපකරණයක ඉදිරිපත් කිරීමක් හෝ ඒ සඳහා පෙළඹවීමක්; හෝ විශේෂ ඉල්ලීමකින් තොරව ඔබ වෙත ලබා දෙන ලද මූල්ය ප්රවර්ධනයන් ලෙස නොසැලකිය යුතුය.
ඕනෑම තෙවන පාර්ශවීය අන්තර්ගතයක් මෙන්ම XM විසින් සකසන ලද අන්තර්ගතය එනම් අදහස්, පුවත්, පර්යේෂණ, විශ්ලේෂණ, මිල ගණන් සහ වෙනත් තොරතුරු හෝ මෙම වෙබ් අඩවියේ අන්තර්ගත තෙවන පාර්ශවීය වෙබ් අඩවි සඳහා සබැඳි සාමාන්ය වෙළඳපොළ විවරණයක් ලෙස "පවතින පරිදි" සපයා ඇති අතර එහි ආයෝජන උපදෙස් ඇතුළත් නොවේ. ඕනෑම අන්තර්ගතයක් ආයෝජන පර්යේෂණයක් ලෙස අර්ථ දක්වා ඇති ප්රමාණයට, ආයෝජන පර්යේෂණයේ ස්වාධීනත්වය ප්රවර්ධනය කිරීමට නිර්මාණය කර ඇති නෛතික අවශ්යතාවලට අනුකූලව අන්තර්ගතය සකසා නොමැති බවත් එලෙස අරමුණු කර නොමැති බවත් ඔබ සලකා පිළිගත යුතු අතර එබැවින් එය අදාළ නීති සහ රෙගුලාසි යටතේ අලෙවිකරණ සන්නිවේදනයක් ලෙස සලකනු ලැබේ. ඉහත සඳහන් තොරතුරු සලකා මෙතනින් ප්රවේශ විය හැකි, ස්වාධීන නොවන ආයෝජන පර්යේෂණ සහ අවදානම් අනතුරු ඇඟවීම පිළිබඳ අපගේ දැනුම්දීම ඔබ කියවා තේරුම් ගෙන ඇති බව සහතික කර ගන්න.
